India shows why money is flowing out of emerging markets right now
Want to see why investors worry so much about the world’s emerging markets that they are taking money out of these stocks? Just take a gander at India. In an effort to fight inflation the Reserve Bank of India has raised interest rates seven times in the last 12...Inflation edges higher in Brazil–and government budget cuts are just the minimum expected
In spite of a 0.5 percentage point increase in its benchmark Selic interest rate to 11.25% and an increase in bank reserve requirements in December, inflation in Brazil failed to slow in January. The IPCA index rose 0.83% for the month, increasing the annual inflation...USDA reports global wheat producer lower than expected–forget about inflation relief from falling food prices
This isn’t good news for anyone worried that soaring food prices are fueling global inflation. Today, February 9, the U.S. Department of Agriculture lowered its forecasts of global wheat inventories because of falling production in the Ukraine. Global stockpiles will...Brazil's economy slows but bets are that interest rate increases aren't done
Will a second straight monthly drop in industrial production put Brazil’s interest rate increases on hold? December output fell by 0.7% from November. November’s output was itself down 0.2% from October. The drop came as a surprise to economists who were expecting...Who holds the most U.S. Treasuries in the world? (Hint: It's not China.)
Why is this not terribly reassuring? Last week a newcomer moved to the top of the rankings for the world’s leading holder of U.S. Treasuries. Used to be Japan, once upon a time. But Japan with holdings of $877 billion in U.S. Treasuries is now No. 3. For a while China...Update HDFC Bank (HDB)
Another day, another interest rate increase from an emerging economy central bank. On January 25, it was the turn of the Reserve Bank of India. The bank raised its benchmark repurchase rate to 6.5% from 6.25%. The Reserve Bank of India raised interest rates six times...Sell Branco Bradesco (BBD)
This is a very tough call. If I owned more than one Brazilian bank stock, I might not sell Banco Bradesco (BBD) out of Jubak’s Picks today—but I don’t. If I had less exposure to Brazilian stocks in my Jubak’s Picks portfolio, I might not sell Banco Bradesco—but I own...China cooks the books: the official numbers understate economic growth
Everyone assumes that China cooks its numbers on inflation and GDP growth. (The rest of the world’s governments, including that of the United States, would never do something like that. Wink, wink.) The January 18 report of fourth quarter GDP growth and December...10 reasons to love inflation
Friends, readers, and consumers, save me your jeers. I come to praise inflation, not to bury it. Hey, I think inflation is getting a bum rap. In the U.S. anyway. Sure, run-away inflation in China and Brazil and India looks like it’s going to cause a lot of pain to...Brazil's new central bank president steps on the brakes with a 50 basis point interest rate increase
Not as bad as the worst forecasts, but the January 19 0.5 percentage point interest rate increase from Brazil’s central bank does promise that Alexandre Tombini, new president of the Banco Central do Brasil, is going to aggressively raise rates to fight inflation....What to do to get ready for a correction in overseas stock markets
Yesterday, January 20, I posted saying that I thought investors were looking at a 5% or so pullback in U.S. stocks. Really nothing more than a necessary decline after a long rally so that stocks in the United States can build a new base. I continue to look for a...The standard strategies for "inflation investing" aren't going to work in 2011
Inflation just looks like the biggest story of 2011 for investors. It’s not. The success or failure of government actions to fight inflation is the biggest story of 2011. What’s the difference? If inflation were the story, you all know what I’d be telling you to do....China GDP growth of 9.8% socks stocks on inflation, tightening fears
Enough with the rumors and the leaks. This morning we have official numbers on economic growth and inflation from China. For the fourth quarter of 2010 GDP growth in China accelerated to 9.8%. That was higher than the 9.6% annual growth recorded in the third quarter...China's bond market doesn't believe inflation is under control
Yes, China has a government bond market. It even has a yield curve. And right now the bond market and the yield curve are signaling worries about inflation just ahead of the release of China’s report on fourth quarter GDP growth. Economists project that China’s...China still isn't serious about inflation and that's an increasing danger
Once more in to the breach, dear friends, once more. The People’s Bank of China yesterday increased the reserve requirements for China’s banks for the fourth time in two months. The 0.5 percentage point increase brings the reserve ratio for China’s biggest banks to a...What inflation fight? Bank lending and money supply soar in China
Nothing in these numbers to suggest that inflation in China is headed anywhere but higher. Or that China’s government has a handle on the country’s run away money supply growth. Chinese banks, as forecast, burst through the 2010 quota of 7.5 trillion yuan set by...Inflation enters dangerous territory in the European Union–and I don't see it stopping here
Talk about getting caught between a rock and rocking the entire European Union. Inflation kicked up to an annual rate of 2.2% in December in the European Union. That’s well above the European Central Bank’s oft-stated target of an annual rate “close but below” 2%. In...It's price controls to fight supermarket inflation, China's Premier Wen promises in Mongolian supermarket
It’s an odd ritual. Something like Groundhog Day in Punxsutawney without the groundhog. At the start of the calendar year China’s Premier Wen Jiabao visits a remote corner of China, mingles with the crowds, and delivers a major message about the coming year. This year...China will set the tone for global stock markets in 2011 but what message are China's stocks sending now?
The Shanghai stock market is closed today, Monday January 3, to observe New Year’s Day—which gives investors a chance to catch up on the market’s rather unusual reaction to a Christmas Day interest rate increase by the People’s Bank of China.Should we worry less about inflation in developing economies than most investors do? I think so–because inflation is different in these economies
Inflation is absent without leave in the developed economies of the world. Morgan Stanley puts the inflation rate at 1.5% for these economies in 2010. The inflation story in the world’s developing economies is very different. There inflation will run at, Morgan...No inflation to speak of, nothing to make the Federal Reserve change course
There was certainly no inflation to speak of in yesterday’s (December 15) consumer price data. The headline Consumer Price Index (CPI) climbed a scant 0.1% in November. The core inflation rate, which excludes food and energy prices, rose 0.1%. This puts the annual...The Fed says it will stay the course and bond yields keep moving up
Nothing surprising in the news from the Federal Reserve’s Open Market Committee yesterday. The Fed said its plans were unchanged and that it would buy $600 billion in Treasuries in the first six months of 2011 in order to stimulate the economy. The economy itself, the...Higher interest rates, lower bond prices–it's a new world
It’s a bond rout. On December 8, prices for U.S. Treasuries plunged and yields on the benchmark 10-year U.S. Treasury hit a six-month high of 3.33%. That’s a full percentage point higher than the October low. And it’s a shocking 0.76 percentage points above the yield...Inflation rages ahead in China, rising 5.1% in November: So where's the action from Beijing?
Bad news from the consumer price inflation numbers released in China on December 11. Inflation not only climbed in November from October’s already too-high 4.4% annual rate but jumped to a 5.1% pace. That’s well above the 4.7% rate that economists surveyed by...Trying to figure out how long the U.S. has to get its financial house in order? History says longer than you think but not forever
The world has a fair deal of experience in dealing with small countries that can’t pay their bills. And the world is gaining more experience by the minute. Greece can’t pay its bills? Put together a funding package that comes at the price of domestic austerity and...Shanghai stock market falls on speculation that another interest rate increase is on the way–soon
On the Shanghai stock market it’s time to play “Can you guess what the government will do next?” As fans of this ever popular game know, the point is to guess what market roiling move Beijing plans next and then by buying or selling to get your portfolio positioned to...With inflation on a run, the Chinese are buying gold too
China has treated data on the country’s level of gold imports as a state secret—until last week. And the newly public data shows that China is on a path that would have the country overtake India as the world’s largest consumer of gold. Think this might be bullish for...In Brazil's inflation fight January actions will speak louder than December words
Brazil’s President-elect Dilma Rousseff would like to convince the financial markets that she’ll keep her promise, made in her October 31 victory speech, to cut taxes, reduce government spending, and control inflation. Her two top financial appointments so far send a...News on faster growth for China isn't good news in the long run
Right now faster than expected growth in China isn’t a good thing. Not in the long run anyhow. Investors in China get it even if the rest of the world’s markets still stand ready to cheer as they did yesterday. That’s because every bit of extra growth raises fears...Jim’s Daily Email Alerts:
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