Exploring and keeping readers up to date with the growing economic and political ties between China and South America. Including all the good stuff: Commodities, Energy, International Finance, South-South Cooperation, Microfinance and more
Jim Rogers spoke his mind on Bloomberg TV - Singapore last night.
Here are some highlights of the interview with Betty Lu.
"If it hits the global economy like it did Asia 5-6 years ago it's going to be a disaster. As you remember, I think you were Asia closed down for about 6 months. People didn't goto school, they didn't go to work, they didn't ride the bus, they didn't get on airplanes. This could be a real disaster at a time when the world economy is already weakened."
and
"I hardly consider this an emerging markets problem, if you remember 5-6 years ago Singapore and Hong Kong which are hardly emerging markets were devastated by what happened. I mean in the US, so far apparently its hitting the US too, its certainly not hitting other markets, its hitting the big countries so far."
and...
"Betty can you imagine what Karl Marx must be thinking right now! That poor guy somewhere is saying America is finally succumbing. The Automobile industry is owned by the government and by the labor unions. The banks, the financial institutions are owned by the government. What more could he want? When you look at America in 10 years what are you going to look back on?"
and one more...
"So i'm sitting here with some money, looking for things to invest in. The only things I can find where the fundamentals continue to improve are commodities, which we have discussed before on this show. The commodity fundamentals are getting better no matter what happens to the rest of the world. The fundamentals of General Motors are not getting better. The fundamentals of Citibank are not getting better."
He’s the swashbuckling world traveler and legendary investor who made his fortune before he was forty. Now the bestselling author of A Bull in China, Hot Commodities, and Adventure Capitalist shares a heartfelt, indispensable guide for his daughters (and all young investors) to find success and happiness. In A Gift to My Children, Jim Rogers offers advice with his trademark candor and confidence, but this time he adds paternal compassion, protectiveness, and love. Rogers reveals how to learn from his triumphs and mistakes in order to achieve a prosperous, well-lived life. For example:
• Trust your own judgment: Rogers sensed China’s true potential way back in the 1980s, at a time when most analysts were highly skeptical of its prospects for growth.
• Focus on what you like: Rogers was five when he started collecting empty bottles at baseball games instead of playing.
• Be persistent: Coming to Yale from rural Alabama, and in over his head, Rogers never stopped studying and wound up with a scholarship to Oxford.
• See the world: In 1990, Rogers traveled through six continents by motorcycle, gaining a global perspective and learning how to evaluate prospects in rapidly developing countries such as Brazil, Russia, India, and China.
• Nothing is really new: anything deemed “innovative” or “unprecedented” is usually just overhyped, as in the case of the Internet or TV, airplanes, and railroads before it
• And not a bit off the subject, and very important: Boys will need you more than you’ll need them!
Wise and warm, accessible and inspiring, A Gift to My Children is a great gift for all those just starting to invest in their futures.
About the Author Jim Rogers co-founded the Quantum Fund before he turned 30 and retired at age thirty-seven. Since then, he has served as a sometime professor of finance at Columbia University’s business school, and as a media commentator worldwide. He is the author of A Bull in China, Hot Commodities, Adventure Capitalist, and Investment Biker. He recently moved to Asia with his wife and daughters.
Japan's exports plunged by a whoppin' 49% in February, the sharpest decline since at least 1980 reported Bloomberg.
In response this depressing data, Japan seems to be preparing yet a new stimulus package. Finance Minister Kaoru Yosano said that a new package of as much as 20 trillion yen ($203 billion) is “not out of line.”
Now let me ask you... What would you do if you where a fictional Anime character who's name is Naruto. You come equipped with cool ninja moves just to let you know...
Hopefully you would be able to earn some money showing off those secret skills on the streets because its obvious no one one in the world economy really wants to buy your exports. Good luck and may the force be with you all: Honda, Toyota, Panasonic, Sony, Fuji, etc.
"But I do invest in China, yes China is a communist country or so they say, but they are among the best capitalists in the world, if not the best capitalists in the world. They are moving away from state ownership to more and more private ownership. In my view that is going to continue as China continues to develop towards becoming the next great country in the world."
Jim Rogers Asian Financial Forum interview 20 Jan 09
As the work came to a close the major news agencies (websites) of Asia was busy reporting about U.S unemployment reaching the highest levels since 1974. Check out the following articles from major news sites of Singapore, Australia and China to read more.
However there was good news to go around at the end of the week for Hong Kong. For starters home sales in the luxury property market in Hong Kong are rising.
Big deal you might say? Well, in major cities of the world that have the ability to attract global talent like Hong Kong does (NY, London, Paris, Tokyo, etc), prices in the luxury property market are a pretty good gauge of both a over-heating economy and also for an economy “getting back on its feet.”If people are starting to buy again, it means the perception is prices have bottomed to a level where demand and confidence is returning.
“Sales of Hong Kong luxury homes rose to their highest in six months in January, indicating that prices may have stabilized as buyers seek bargains, according to data by Centaline Property Agency Ltd.” Yes a good sign indeed. Click here to read a more comprehensive story on this development from Bloomberg.
Hong Kong stocks also finished the week off higher, rising the most in over a week on speculation the U.S will announce a stimulus plan and help to alleviate the financial crisis.
“The Hang Seng Index added 476.14, or 3.6 percent, to close at 13,655.04, its biggest jump since Jan. 29, and bringing its advance this week to 2.8 percent. The gauge has dropped 5.1 percent this year, extending 2008’s slump of 48 percent, the biggest annual drop since 1974. It’s valued at 11 times estimated earnings, down from 18.7 times at the beginning of last year.” Reported by Bloomberg in this article.
Here's a view of how the Hang Seng (Hong Kong's major stock index) has preformed this past week. Not too bad right?
If anything has been learned from this financial crisis it is that news can turn ugly as quickly as it turns good. More updates to come after we see how the markets play out next week.
Feb. 3 (Bloomberg) -- Asian stocks rose for the first time in three days, led by bank and technology shares, as Japan and Australia widened efforts to revive economic growth and memory- chip prices surged. Click here to access the full article
HONG KONG - ASIAN stock markets tumbled on Thursday, with Japan's benchmark sliding almost 5 per cent, on gloomy US holiday sales and renewed concerns about the banking industry.
Every market across Asian suffered steep declines, with broad-based selling hitting industries from energy to financials to exporters. A sharp drop in Japanese machinery pointed to a deepening recession in the world's No. 2 economy, while oil prices continued to fall on worries that the global economic slump will further weaken demand for crude.
BEIJING - CHINA is planning more help for its steel, textile, shipbuilding and other key industries, analysts said on Thursday, a day after the government unveiled a stimulus package for its ailing auto sector.
A severe economic slowdown in China is one of the biggest risks faced by the world this year, the World Economic Forum (WEF) has warned. The WEF report said a hard landing for China's economy could create domestic social tensions and put stress on the global financial system.
Jan. 15 (Bloomberg) – Foreign Direct Investment in China declined for a third month, adding to the toll that recessions in the U.S. and Europe are taking on the world’s third-biggest economy.
Investment fell 5.7 percent to $5.98 billion in December from a year earlier, the commerce ministry said at a briefing in Beijing today. November’s decline was 36.5 percent.
Jan. 15 (Bloomberg) -- Home prices and sales in China, which fell last year for the first time in a decade, will continue dropping until they reach a “reasonable” level and will rebound in 2011, property agency DTZ said.
Jan. 15 (Bloomberg) – Hong Kong's benchmark stock index fell to the lowest in almost two months on concern slowing demand is deepening the global economic slump.
· China's State Council unveiled a support package for the auto and steel sectors Wednesday. · The gov't will lower purchase tax on cars under 1.6 liters from 10% to 5% from Jan. 20 to Dec. 31. · The plan also urges improvements in the credit system for car purchase loans.
SEOUL - SOUTH Korea's economic growth this year could fall below the central bank's forecast of 2 per cent as the global recession deepens, the country's second vice finance minister said in a prepared speech on Thursday.
Jan. 15 (Bloomberg) -- India’s benchmark stock index fell to the lowest in more than a month. Tata Consultancy Services Ltd. and Infosys Technologies Ltd. led declines after a Canadian customer for their software services collapsed.
Jan. 15 (Bloomberg) – Satyam Computer Services Ltd.'s new auditors may take three months to clear up an alleged $1 billion fraud at India's fourth-largest software exporter, delaying access to government funds.
Satyam fell 32 percent today after the government said it has no plans for a bailout until the board seeks aid. Satyam won't know how much it needs until auditors confirm assets and assess how much clients owe, director Deepak Parekh said. ``The government doesn't bail out every sick company,'' he said.
Jan. 15 (Bloomberg) -- India’s inflation slowed to an 11- month low, paving the way for further stimulus measures to bolster an economy expanding at the weakest pace in six years.
As it stands, a “new economic order” is emerging as a global re-balancing of international economic power and influence occur. This “new economic order,” to be described in this working paper can be largely attributed to the increasing importance and presence of emerging markets in the world economy and inter-emerging market cooperation. Accounting for only the populations of the four largest developing nations; Brazil, Russia, India and China (BRIC countries), roughly 2.7 billion economic agents have become active competitors in the global economy. This research study focuses on the growth and cooperation of the emerging markets of China and the South American commodity exporting countries of Peru, Chile, Colombia, Brazil, Argentina and Venezuela, and, how to understand their cooperation the ramifications in the field of international investing..
Chinese expansion in the fields of trade and investment in South America, the general growth in Sino-South American relations and in particular, the countries of focus in this paper, has greatly altered the expectations of many economist and investors around the world. Economists and international investors have responded through creating new international models for their respective fields. For instance, many within the investment community have developed alternative investment strategies and portfolio diversification strategies with a international focus. Strategies, typically consider international factors such as market volatility, political risks, growth forecasts, and or advancements in technology—all of which are important indicators which help investors identify a strategic mix of investments in which to construct an international portfolio.
A unique aspect behind China's emergence as a global economic power, is that China remains (by western standards) a developing country, home to over 350-400 million people living below the international poverty. Never the less, China has managed to achieve global recognition while still being classified as an emerging market. With hundreds of millions in China yet to benefit, the country's economic growth and development is far from complete. Furthermore, China's recent materialization as the world’s second largest economy (in PPP terms) provides a clear message; no developed or developing country can afford to ignore or marginalize the affects of China's rapid economic growth (Colombia Futures Group; 2005). Referred to by many as; “the work shop of the world,” China has is now a major center of economic activity with ample capacity to further expand its influence and position.
Emerging markets such as China and India, both of which have over a billion people, evolve and become new engines of global growth—much like North America and Western Europe. Additionally, in light of globalization and ever increasing levels of international commerce and production matrices, emerging market cooperation has developed into its own respective engine of growth for developing countries—facilitating the rise of commercial exchange between regions which may have previously had little or no connections with one another, as China and South America have (Estevadeordal; 2006).
In response to the ever-increasing interconnectivity of economic activity in the world economy, emerging markets have managed to develop both their domestic capacities and establish significant levels commercial exchange with other emerging markets. When the global credit crises of late 2007-2008 emerged, it led to world-wide market corrections in developed countries real estate, banking, and financial sectors. The developing world, including the countries in this research, in part, where able to use their domestic and regional economies to compensate for the adverse effects of economic slowdown or recession in the US.
Despite problems which need to be addressed in the global economy, emerging markets discussed here show signs they will achieve favorable growth in 2008 and for the next few years to come. The countries of focus in this research all managed to achieve very positive growth rates in 2007. GDP growth rate data from 2006 and 2007, has been adquired from Bloomberg L.P reports. China achieved avg GDP growth of 10.7% over 2007. While, in South America GDP growth were calculated as: Peru 9%, Chile 5.2%, Colombia 7.8%, Brazil 4.8%, Argentina 8.7% and Venezuela 8.4%.
In 1970, two-way trade between China and all of Latin America, which includes Central America and the Caribbean region, was reported to be a meager $150 million. Additionally the majority of this exchange occurred between China and Cuba, largely because of ideological. In 1980, the figure had begun to change drastically, increasing 1000% o ver ten years to $1.5 billion (Li; 38-39). From 1984-2004, Chinese commodity imports from Latin America surged by a factor of 20. By 2005 two-way trade between the regions had increased another 900%, growing to over $50 billion. Trade data from 2004, provided by the International Monetary Funds direction of trade statistics estimates the total value of Chinese commodity imports at $200b USD (Santiso; 2007).
This blog will be a resource for all those interested in participating in exploring this new dynamic relationship.
Up to date news and relevant developments from reputable news agencies will be posted when they pertain to this growing cooperation and the emerging markets of South America and China.
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