Backdoc: WITH EMERGING MARKETS RACING TO CUT INTEREST RATES, THEY HOPE TO PROMOTE STIMULUS TO THEIR FAILING ECONOMIES!
AS I TOLD YOU MONTHS AGO THE DOLLAR RISE WOULD CRUSH THE BRICS!
NOW WE SEE THE CONTAGION IS UNHINGED! TRYING TO FIND A BREAKING POINT IN THE WORLDS MARKETS IS LIKE LOOKING FOR A NEEDLE IN A HAYSTACK!
BUT WAIT! THERE'S A SHINING STAR!!
ANY TAKERS? COME ON MAN!! WHO HAD A LIQUIDITY CRISIS WEEKS AGO?
WHO RESTRUCTURED ITS BANKING SYSTEM AND PUT 80% OF THEIR DEBT IN DOLLARS AND WAS CALLED A "CLEVER MOVE"?
WHO'S DEBT WILL OBVIOUSLY CRASH WITH THE DOLLAR IN THAT CLEVER MOVE? HEE HEE
I LOVE THE CROSS BETWEEN JAZZ AND ROCK THAT EARTH WIND AND FIRE CREATED!
THE SONG "SHINNING STAR" WAS AWESOME! DOC IMO (See Below)
Thunderhawk » September 11th, 2015,
Goldman's Next 11 Markets Are Sinking Even Faster Than the BRICs
This time last year, it looked like Goldman Sachs Group Inc.’s selection of emerging market up-and-comers was ready to fill the void left by shrinking investment returns in Brazil, Russia, India and China.
Share prices in these “Next 11” countries -- places like the Philippines, Turkey and Mexico -- were trading at all-time highs as foreign investors flooded their markets with cash. Inflows into Goldman Sachs’s U.S.-domiciled Next 11 equity fund sent assets under management to twice the level of the firm’s BRICs counterpart.
Now, though, the Next 11 countries are looking even worse for investors than the larger markets they were supposed to supplant. MSCI Inc.’s Next 11 equity gauge has tumbled 19 percent this year, versus a 14 percent slump for the BRIC index. Foreign capital is rushing out, with the Goldman Sachs fund shrinking by almost half as losses deepened to 11 percent since its inception four years ago.
The turnaround shows how young populations and a rising middle class -- characteristics that first lured Goldman Sachs to the Next 11 economies a decade ago -- have failed to safeguard stock-market returns in a world facing higher U.S. interest rates, tumbling commodity prices and a Chinese economic slowdown. For John-Paul Smith, one of the few strategists to accurately predict the losses in emerging markets, it also illustrates the dangers of grouping so many disparate countries into a single investment theme.
Money managers “are increasingly moving away from acronym-based investment,” said Smith, the former Deutsche Bank AG strategist who founded Ecstrat, a London-based research firm, last year. “Within emerging markets, it is difficult to think of a market that has a combination of attractive valuations and constructive policy developments.”
Katie Koch, a managing director at Goldman Sachs Asset Management, said that even with this year’s decline, the Next 11 fund’s return since its 2011 start still beat the MSCI Emerging Markets Index, which lost 16 percent during the period.
“While we are certainly disappointed that the asset class headwinds have weighed on N-11, the fund has performed as designed by outperforming broad emerging markets through a full market cycle,” Koch said in a statement.
As investor pessimism spreads to the smaller developing economies, capital outflows are deepening. Exchange-traded funds that invest in emerging markets recorded withdrawals of $1.65 billion in the week ended Sept. 4, a 10th week of outflows. Among the Next 11 markets, funds focused on South Korea and Mexico had the biggest losses. The group also includes Indonesia, Nigeria, Bangladesh, Egypt, Pakistan and Vietnam. Iran is a member, but the Goldman Sachs fund doesn’t invest in the country because of international sanctions over its nuclear program.
“There’s just a lot of negative sentiment,” said Geoffrey Dennis, the head of global emerging-market strategy at UBS Group AG in Boston. “There are not many emerging markets that stand out against it, whether it’s Next-11 or BRIC. It sucks in every one.”
The Next 11 countries’ shared vulnerabilities have been exposed by China’s slowdown and heightened anticipation of a Federal Reserve interest-rate increase as soon as this month. Weaker Chinese growth has hurt demand for Korean and Bangladeshi exports, along with the commodities produced by Mexico, Indonesia and Nigeria. Markets where foreign capital flows play an important role in driving investor sentiment -- including Turkey and the Philippines -- have slumped on concern international money managers will gravitate toward dollar assets as the Fed boosts rates.
Some members of the group have problems of their own making. In Turkey, the government’s failure to form a coalition after June 7 elections has sapped investor confidence and pushed the lira to a record low. Turkiye Garanti Bankasi AS, the nation’s largest lender and one of the top holdings in Goldman Sachs’s Next 11 fund as of June, has tumbled 26 percent this year.
In Nigeria, President Muhammadu Buhari has yet to name a cabinet after coming to power in May, while the central bank’s efforts to defend the naira are depleting foreign reserves. Nigerian Breweries Plc, the local unit of Amsterdam-based Heineken, has dropped 25 percent this year.
For Alex Wolf, an economist at Standard Life Investments, country-specific drivers of performance have become too important for investors to rely on groupings like the Next 11 to determine their holdings.
“There couldn’t be bigger differences between these countries: the growth model, the outlook, the demographics and the natural resources,” said Wolf. “You have to look at each country individually.”
There are some bright spots. Vietnam’s benchmark VN Index has gained 4.9 percent this year, helped by rising exports and a government push to become an Asian manufacturing hub. Economic growth quickened to 6.4 percent in the second quarter from 6.1 percent during the previous three months.
Over the longer term, shares in the Next 11 have been a decent bet. The MSCI Next 11 ex Iran GDP Weighted Index climbed 61 percent including dividends from the end of 2005, when former Goldman Sachs economist Jim O’Neill coined the term, through August. That tops a 46 percent return from the MSCI Emerging Markets Index, though it lags behind a 94 percent gain in the Standard & Poor’s 500 Index.
O’Neill, who stepped down as the chairman of Goldman Sachs Asset Management in 2013 and became commercial secretary to the U.K. Treasury in May, didn’t reply to an e-mailed request for comment.
So far, the Next 11’s impact on the world economy has been modest. With a combined gross domestic product of $6.5 trillion, they accounted for about 8 percent of global output last year, up from 7 percent a decade earlier, according to data compiled by Bloomberg. The share of BRIC nations more than doubled to 21 percent during the same period.
As the effects of an unprecedented economic boom in China and three decades of declining interest rates in the U.S. wear off, it’s no longer inevitable that less-developed countries will deliver attractive investment returns, according to Stephen Jen, the co-founder of London-based hedge fund SLJ Macro Partners LLP.
“Too much long-term money has been invested in this space that was based on simplistic logic related to population growth, and that poor countries must somehow become wealthier,” Jen, a former economist at the International Monetary Fund, said in a note on Aug. 31. “There have been plenty of poor countries that stayed poor.”
Earth, Wind, and Fire-Shining Star:
Backdoc: » September 11th, 2015, WELCOME TO "THE MAIN EVENT" AND THE "NEW GLOBAL REALITY" IN OCTOBER!! BINGO!
ThunderHawk : Chile Willing to Establish Free Trade With EEU, Deepen Trade With Russia
Chile is ready and willing to enhance its partnership with the Eurasian Economic Union, signing a free trade agreement with it as soon as the formal documents are prepared. Russia and Chile will discuss boosting trade and investment in October, Juan Eduardo Eguiguren Guzman, ambassador of Chile to Russia, said.
Jhockey00 :Backdoc with all that is happening do you believe we could see the RI before the end of this year?
Backdoc: WITH ALL THAT HAPPENS IN THE NEXT FEW WEEKS ITS MORE THAN POSSIBLE!! I WATCH THE DEAL WITH IRAN!! THAT IS THEY KEY!!!
"BECAUSE ITS ALL ABOUT IRAQ, IT'S NOT ABOUT IRAQ"!! DOC IMO
Backdoc: I GUESS MY DREAM WAS REAL GOSH!
IT APPEARS AS THOUGH EVERYONE WOKE UP TO THE SAME "GLOBAL REALITY VALUE"! DOC IMO
ThunderHawk : New Crude Contract May Strengthen China's Position in Oil Market
Last week, media reported that China could launch its own global crude oil futures contract priced in yuan in October.
Backdoc: MMMMM MAKES YOU WONDER WHY PUERTO RICO WANTS TO GO BACK TO ITS' AFFILIATION WITH SPAIN, OR IS IT THAT TOO OBVIOUS? MMMMM
Thunderhawk: Back to Business: Iran Ready to Boost Oil Supplies to Spain
Iran used to export 200,000 barrels per day to Spain before sanctions were imposed and announced its intention to match the figures.
Backdoc: ISN'T IT INTERESTING THAT WE SEE A BIG PUSH IN CUBA AND AS WE HEARD YESTERDAY, THE PHILIPPINES TO BUILD OUT THE INTERNET COUNTRYWIDE! ANY TAKERS AS TO WHY?
THE ANSWER IS SIMPLE. THE EMPIRE PLANS TO HAVE A CENTRAL BANK IN EVERY COUNTRY OF THE WORLD RIGHT? RIGHT!
THE BANKING TRANSACTIONS OF THE FUTURE WILL ALL BE DIGITAL AND BE ON THE INTERNET!
Thunderhawk: US, Cuba to Discuss Internet, Civil Aviation at 1st Bilateral Commission Meeting
US Department of State spokesperson said that the United States and Cuba will discuss the Internet and civil aviation among other issues of mutual concern during the first meeting of the new Bilateral Commission in Havana on Friday.
Backdoc » September 11th, 2015,
WITHIN A COUPLE MONTHS WE WILL SEE A BLOWUP IN THE U.S. ON SOME OIL EXPLORATION COMPANIES AND THE FINANCIAL INSTITUTIONS THAT FINANCIALLY LENT THEM MONEY!
THERE WILL BE OIL HEDGES THAT ARE COMING OFF WITHIN TWO MONTHS!
HEDGES ARE A WAY OF FINANCIAL PROTECTION FOR THEM! MANY WILL BE NAKED SOON!
ThunderHawk :Backdoc Alert Citigroup Sees U.S. Oil Output Losing 500,000 Barrels a Day
Oil rig picture
A funding squeeze threatens to cut U.S. oil output by as much as half a million barrels a day by the end of the year, with shale producers among the worst affected, Citigroup Inc. said.
Backdoc: THE IMF AND THE WORLD BANK HAVE BOTH RECOMMENDED THAT THE FED. NOT RAISE INTEREST RATES NOW!
WHAT WILL THEY DO? FEAR IS A POWERFUL MOTIVATOR OF MARKETS! IF YOU MANAGED BILLIONS OF DOLLARS WHAT WOULD YOU DO? MMMMM
HEE HEE DOC IMO
ThunderHawk : US Fed Rate Hike May Put Global Markets at Risk - World Bank Official
The US Federal Reserve (Fed) should delay raising interest rates widely expected this month until the global economy stabilizes, the World Bank’s senior vice president and chief economist said.
The Federal Open Market Committee is expected to make its decision to either raise rates or keep them the same at its September 17-18 meeting.
"The world economy is looking so troubled that if the US goes in for a very quick move in the middle of this I feel it is going to affect countries quite badly," Kaushik Basu told The Financial Times in an interview on Tuesday.
The Fed "lift-off" in itself is not expected to create a "major crisis, but will cause immediate turbulence," Basu clarified.
The economist noted the rate hike, alongside stumped growth in China, risks touching off "panic and turmoil" in developing markets.
Last week, the International Monetary Fund’s (IMF) spokesman urged the Fed to "proceed gradually" and hold off its decision on raising the interest rates.
The IMF report dated September 3 projected uncertainty in the recovery of the global markets due to reduced demand in China and other markets, low commodity prices and greater overall market volatility.
The United States has kept its borrowing rates at historic low levels since the beginning of the financial crisis in 2007.