Finance

• China Slowing But Growth Remains Robust

  The latest set of data and various reports confirm that metals demand is strong and growing in China. Even as Beijing escalated efforts to close less energy-efficient and smaller smelting capacity across the metals sector, production has only increased. In fact, Beijing’s efforts to close less efficient, smaller plants may actually be having the effect of increasing overall production, as plant owners close old plants and re-invest in newer, more energy efficient and inevitably larger plants. Beijing instructed local governments to cut nearly 28 million tons of steelmaking capacity and more than 2 million tons of lead, zinc, copper and…

• Jim Rogers: Buying Commodities Now Guarantees Success for Investors

  Jim Rogers says the investing game is simple these days. Rogers said this week, “I do believe I could count on one hand the number of times I’ve been presented with an investment opportunity that guarantees success no matter what direction the economy takes.”  Rogers adds, “If the world economy gets better, I earn my money on commodities. If the global economy gets worse, then they will print more money and I will make money in commodities.” Although we have featured comments by Rogers many times on the site, Jim Rogers, who ran money with Mr. George Soros way back…

• Why Investors are Turning Their Sights on Indonesia

  As the largest economy in Southeast Asia, Indonesia is one of the most interesting and attractive emerging markets worldwide. The archipelago nation successfully survived enormous political and economic difficulties during the 1990s. The reforms adopted in recent years by President Susilo Bambang Yudhoyono positively impacted the overall business climate, thus generating an increase in net foreign direct investment (FDI), and supported continued political stability. At the same time, the country has experienced a sustained increase in domestic consumption, which has significantly supported its economic growth and political standing. Indonesia in now listed in first place as a preferred destination for…

• Fed Dissatisfied with Current Pace of Economic Recovery

  The minutes from the June Fed meeting provided a little something for everyone as Fed officials discussed both an exit strategy and… drum roll please… the possibility of more quantitative easing (dubbed as QE3). A quick review of the minutes shows that the Fed is clearly in a reactive mode at the present time and that there is a great deal of “discussion” taking place about what ought to be done next. For example, some of the FOMC members appear ready to provide more monetary easing if the economic recovery stalls further while others argue that if inflation doesn’t moderate…

• China on its Way to the Leading Global Currency?

  The open criticism of the US policy is getting more vociferous by the day. For example, a former central bank advisor pointed out that in the medium to long term US Treasuries were “not safe”  . In order to further diversify China has now stepped up its bond purchases from the European stabilisation fund EFSF. China will also launch a new investment fund, which will invest a part of the almost USD 3bn worth of foreign exchange reserves in energy and precious metals. PBoC advisor Xia  recommended holding only USD 1bn worth of foreign exchange reserves, while the rest should…

• The Stock Melt Up That Was

  The first half of 2011 went out with a bang last week. The S&P 500 delivered an awesome 72 point run, its best performance in two years. After threatening the 200 day moving average three times, the index predictably bounced hard. What really left traders with jaws dropped was the way the (SPX) blew through the 25 day moving average at 1,317 after only an hour of indecision. It was a brutal week for hedge funds. I caught several managers on the phone after the close, on their way to the Hamptons in their limos or to Florida on Netjets,…

• Soros: Weaker Countries will soon be allowed to Abandon the E.U.

  Billionaire businessman and prominent philanthropist, George Soros reportedly told Bloomberg that it is probable a country will exit the euro, as strategies are being implemented to allow economically weaker nations to abandon the European Union. Many economists are speculating whether the Eurozone may eventually split and if the currency can survive the present turmoil, resulting from political leaders’ unwillingness to take the necessary steps to address underlying factors. Soros, who previously generated over 30% while running the Quantum fund and proved his expertise in currency speculation when he made $1 billion by betting against the British pound in 1992, said…

• The Fifth Option: Is This how Governments Will Fix Their Debt Problems?

  We have all read about the standard “fixes” for a governmental debt problem – (1) inflate your way out of the problem, (2) cut programs and/or raise taxes, and (3) restructure debt, perhaps delaying repayment and giving bondholders a “haircut” on promised payouts. A fourth one seems to circulate through peak oil circles, namely “debt jubilee”. It seems to me that there is really a fifth option as well, and that is the one that may actually get used more this time around, at least in some parts of the world. The fifth one is “do a disappearing act.” The…

• China's Bad Debt and Slowing Growth

  What goes around comes around they say, along with other equally useless phrases like “all good things come to an end.” China has had a good financial crisis of that we don’t doubt. Growth remains robust and has not only carried the country through double digit growth while the west has gone backwards but it has carried much of Asia along with it, bringing increased prosperity to South Korea, Taiwan and many neighboring economies. Perhaps the prime minister, Wen Jiabao, in March of last year can be forgiven for crowing “What is great about socialism, (is that it can) make…

• Take a Look at Tata Motors

  Every day, when considering what to write about, I tell myself that I’m not singing enough praises about India. Then events demand that a topic more urgent be thrust upon these august pages. This is a major omission on my part, as friends, like Morgan Stanley Asia’s chairman Stephen Roach, believe that India will far and away outperform China over the coming decade. So today I’m going to discuss Tata Motors (TTM), one of the world’s largest manufacturers of cars and trucks. Two years ago TTM made headlines when it bought Ford Motor’s troubled Jaguar Land Rover unit for a…