Themes and Theories BRIC

DavidAKZ Says:

Sep 2, 2009 - when you say BRIC and US GDP are comparable isn't that comparing an apple with an orange ? For example do any BRIC economies monetize its own debt and call it GDP ?

prwong80 Says:

Sep 2, 2009 - Warren do you think that China is the strongest prospect of the BRIC nations? This seems to be the implicit inference from your video.

wepollock Says:

Sep 2, 2009 - Its based on Purchasing Power Parity Adjusted GDP. In other words its based on what local currency would purchase. I don't think we will see them monetizing their own debt. I could see exchanges of debt between China and Brazil and we are seeing that. Its just a way of putting grease into a trade relationship. I also see China investing in Brazil in terms of infrastructure.

wepollock Says:

Sep 2, 2009 - Yes it is... BUT; I think that equity markets in China do not provide shelter in any US stock adjustment. If the US market crashes my guess is that the Chinese market will as well. No doubt we are going to see a second round of stimulus. China can have several large scale stimulus programs while the US has used all its ammo. China stimulus will not help people in the US. A point was made that China will make a local type of ipod. I think that is what is going to happen..

wepollock Says:

Sep 2, 2009 - China does not need capital from the US.. Its not going to pollute domestic capital markets with US funds seeking refuge in a bubble. China does not need engineers or machine tools or wind turbines. They will make their own, they will own their own. It will delink but it will be a multi-year process and be painful in any stock adjustment.

wepollock Says:

Sep 2, 2009 - PS this is my final video format.. Thanks for the input on previous videos.

wepollock Says:

Sep 2, 2009 - The stock market going up has everything to do with capital flows; these tend to move rapidly.

Matlock1974 Says:

Sep 2, 2009 - The declines in foreign stockmarkets during last year's crash were made worse by the strengthening US dollar. Peter Schiff view is that declines in the US stockmarket this time around will be accompanied by a weakening US. Were this to happen then any losses in foreign markets for US citizens would be cushioned somewhat. Are investors going to be so keen to move out of natural resources and growth economies and jump back into US T-bills during a tanking Dow this time around? Not so sure.

wepollock Says:

Sep 2, 2009 - The Peter Schiff Scenario is Possible; would people liquidating stocks move into Chinese stocks? He is counting on a currency crisis or hyperinflation. Where people would be looking to anything but dollars. Its very possible we have a deflationary downdraft followed by a hyperinflation/currency crisis.

wepollock Says:

Sep 2, 2009 - Most stock accounts are not set up for a rotation from US stocks to Chinese Stocks. The only non-stock move is to cash or US treasury bonds. Margin accounts and leveraged accounts especially. The question of hyperinflation-currency crisis-or zero bound deflation is can you source the things you need to live on.

DavidAKZ Says:

Sep 2, 2009 - Do you have any idea on the value of the following ? tinyurlDOTcom / nuvqa3

DavidAKZ Says:

Sep 2, 2009 - 'Are investors going to be so keen to move out of natural resources and growth economies and jump back into US T-bills during a tanking Dow this time around?' But aren't T-Bills and bonds worthless because of printing ?

wepollock Says:

Sep 2, 2009 - I think here we are going to see USD strengthen and downdraft in US and Chinese equity markets.

wepollock Says:

Sep 2, 2009 - T-Bills and US Dollars (and even US Treasury Bonds) are the same. Everyone is negative dollar; Everyone.. Gold and Dollar have been moving in alternate ways. The same with OIl which has been going up on questionable demand levels. So I think commodity stocks will also be hit. Growth in China is just stimulus at this point; with tons of capacity. This added stimulus was the 4x larger than US stimulus weighted to GDP. Long Term we will see a whipsaw where the dollar collapses.

wepollock Says:

Sep 2, 2009 - Gold has been doing strange things in the last two days with dollar up or flat and Gold up. We have to watch if that becomes a trend. This is the "dead" of summer; so I don't think its too meaningful. If gold would break $1000 then I would get excited and revise my thinking towards currency collapse or hyperinflation.

wepollock Says:

Sep 2, 2009 - I would like to buy agriculture companies in India but they are at 20-30 times earnings multiples. In other words they have been bid up tremendously.

skybirdbird Says:

Sep 2, 2009 - Thank you for the post

cpswyl2 Says:

Sep 3, 2009 - You busted your gut putting these videos out Warren. Totally appeciated. Words in any form from you are greatly valued. Cheers

fal2grace Says:

Sep 3, 2009 - Great video Warren! Thank you. Of note, the company I work for started outsourcing service jobs to Brazil and India a long time ago...with some investment in Russia and production moving to China. Within the past two months some of the India work has moved to Manila. So they apparently are now looking at Indonesia for cheap labor.

Provakator Says:

Sep 4, 2009 - I think you're very wrong on Russia. Lots of what you hear about russia is western propaganda. Yes Russia and its stock markets are more of rollercoaster but potential is strong. Orlov is wrong on Collapse read E. Gaidar "Collapse of the Empire" for good explanation. Russia is key to Chinese security and is China's strategic partner. The economy has a great potential for investment. However some local specifics needs to be take into account as with any developing country.

Provakator Says:

Sep 4, 2009 - As part of BRICK Russia is usually casually discounted as non-player. As a result the market is undervalued the potential to make money once everyone rushes back into Russia is huge. US economic collapse should not affect Russian economy directly as US-Russia trade is minimal. Russia's main trade partners are EU China both are to remain resource and energy hungry under all scenarios. Do not make a mistake and discount Russia based on bad publicity in western press.