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by afew (afew(a in a circle)eurotrib_dot_com) on Thu Jun 9th, 2011 at 03:06:56 PM EST
Monstrous risks in emerging markets | Reuters

(Reuters) - Emerging markets face "monstrous" risks this year, with investors continually ignoring intensifying inflationary pressures and credit bubbles, leading market strategist Richard Bernstein warned on Wednesday.

Emerging markets have been the darling of the financial world since 2009, as global investors have pursued stronger returns and driven by a belief that countries such as China and Brazil will lead global growth in the next few years, while developed world economies remain nearly stagnant.

Bernstein, who now runs his own firm after being chief investment strategist for Merrill Lynch & Co, said the love affair with emerging markets is overdone.

"I think what people are completely missing is that the risk is not here in the United States," he told the Reuters 2011 Investment Outlook Summit. "The risk is in emerging markets. There are just monstrous risks in emerging markets right now in my opinion."

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Jun 9th, 2011 at 03:50:20 PM EST
[ Parent ]
I believe he is right!

Science without religion is lame, religion without science is blind...Albert Einstein
by vbo on Thu Jun 9th, 2011 at 08:26:04 PM EST
[ Parent ]
but from a market viewpoint, risk = profit. After all, if they lose, we bail 'em out so where is their problem ?

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Fri Jun 10th, 2011 at 03:39:20 AM EST
[ Parent ]
Gah, painting with such a broad stroke as "emerging markets" or "China stocks" or whatever, is absurd. Stocks are about companies, not countries.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Jun 10th, 2011 at 05:01:17 AM EST
[ Parent ]
Debt talks to tackle taxes and spending caps | Reuters
(Reuters) - Top Democratic and Republican lawmakers met on Thursday to discuss taxes and other hurdles to a debt-reduction deal aimed at allowing the United States to keep borrowing money at rock-bottom rates.
by afew (afew(a in a circle)eurotrib_dot_com) on Thu Jun 9th, 2011 at 03:50:52 PM EST
[ Parent ]
Dimon Challenges Bernanke in Wall Street Bid to Tame Rules (1) - Bloomberg.com

June 9 (Bloomberg) -- JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon's public questioning of Federal Reserve Chairman Ben S. Bernanke on bank regulatory costs has "thrown down the gauntlet" in the industry's increasingly aggressive fight to curb higher capital requirements and other rules.

"They threw out the first ball, now can they play the game?" said William Poole, former president of the Federal Reserve Bank of St. Louis, in an interview yesterday. "How persuasively can Dimon and others make their case?"

Dimon, head of the most profitable U.S. bank, took an unusual step in pressing Bernanke in a public forum on June 7 on whether regulators have gone too far in reining in the U.S. banking system and are slowing economic growth. The U.S. unemployment rate rose to 9.1 percent in May as the S&P/Case- Shiller index of property values in 20 cities showed that U.S. home prices slumped in March to their lowest since 2003.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Jun 9th, 2011 at 03:57:18 PM EST
[ Parent ]
Household Worth in U.S. Increases by $943 Billion, Fed Says (1) - Bloomberg.com

June 9 (Bloomberg) -- Household wealth in the U.S. climbed by $943 billion in the first quarter of 2011 as rising share prices outstripped declines in home values.

Net worth for households and non-profit groups increased at a 6.8 percent annual pace to $58.1 trillion after rising at a 19 percent pace in the previous three months, the Federal Reserve said today in its flow of funds report from Washington. American households also cut debt for a 12th consecutive quarter.

The 5.4 percent increase in the Standard & Poor's 500 Index last quarter helped boost household wealth that remains below pre-recession levels. Stock declines, a weakening housing market and rising unemployment in the current quarter probably means households will continue saving and cutting debt, slowing the spending that accounts for 70 percent of the economy.

"The easy part of the repair of balance sheets may be behind us," Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York, said before the report. "It'll be tougher to get big increases in household wealth. We need to at least see house prices showing signs they are approaching stability."

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Jun 9th, 2011 at 03:59:11 PM EST
[ Parent ]
Two remarks:

- This increase in wealth is mainly due to an increase in financial assets value: Bloomberg

The value of financial assets, including stocks and pension fund holdings, held by American households increased by $1.16 trillion in the first quarter, today's report showed, as the Fed's planned purchases of $600 billion in Treasuries through June continued to push investors into riskier assets.

And the vast majority of these financial assets are detained by a small minority of rich households (the richest 5% hold 72% of financial assets):

source: Who Rules America: Wealth, Income, and Power

So it will eventually increase the level of inequality...

- It is a net worth increase, which means that, for the majority of households, it is merely debt reduction (which is not a bad thing).


"L'homme fut sűrement le voeu le plus fou des ténčbres " René Char

by Melanchthon on Fri Jun 10th, 2011 at 04:54:30 AM EST
[ Parent ]
And for the great number of households whose wealth is mainly real estate,the future looks bleak:

Bloomberg

The value of real estate fell by $298.5 billion following the prior quarter's $84.4 billion drop.

Home values may keep falling as unemployment causes foreclosures to mount. The S&P/Case-Shiller index of property values across the nation was down 4.2 percent in the first quarter from the previous three months, the biggest one-quarter decrease since the first three months of 2009. The national price index fell to its lowest since the second quarter of 2002, and was down 34 percent from the peak reached in the second quarter of 2006.

Robert Shiller, a co-founder of the index, told a conference in New York today that a further decline in property values of 10 percent to 25 percent in the next five years "wouldn't surprise me at all."



"L'homme fut sűrement le voeu le plus fou des ténčbres " René Char
by Melanchthon on Fri Jun 10th, 2011 at 05:34:50 AM EST
[ Parent ]
i find it so irritating that these hairpulling moans about market value dropping are always so onesided.

there's nary a mention of how many people salted away millions, expanded their business empires, fluffing and flipping their way to ridiculously unreal fortunes, for which the offshore banks are duly grateful, during the 20 years of property boom before the bust.

it's like that part never happened at all! what goes up must come down, wow, who'd-a thunk it. gravity, what a concept.

anyway it just comes across as pathetic victimology, poor little us, our house isn't worth as much as we believed it was, boo fucking hoo, when so many live with barely a pot to piss in.

learn the value of money, my grandpa used to say to me. i'd like to see his face now watching these economic times, two world wars and a depression were plenty for then, what will happens when this world economy disintegrates around energy issues? most people back then thought of money as distilled sweat and time, and farthing bought you something. (a quarter of a penny!).

value of money indeed... like trying to lassoo the air.

the wilder the party, the more likely the accidents on the way home.

"We can all be prosperous but we can't all be rich." Ian Welsh

by melo (melometa4(at)gmail.com) on Fri Jun 10th, 2011 at 11:49:53 AM EST
[ Parent ]
Sky News Newsdesk (SkyNewsBreak) on Twitter
Reuters: Hillary Clinton may leave State Department to seek World Bank presidency


Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Thu Jun 9th, 2011 at 05:27:34 PM EST
[ Parent ]
Exclusive: Clinton in talks about possible move to World Bank | Reuters

(Reuters) - Secretary of State Hillary Clinton has been in discussions with the White House about leaving her job next year to become head of the World Bank, sources familiar with the discussions said on Thursday.

The former first lady and onetime political rival to President Barack Obama quickly became one of the most influential members of his Cabinet after she began her tenure at State in early 2009.

She has said publicly she did not plan to stay on at the State Department for more than four years. Associates say Clinton has expressed interest in having the World Bank job should the bank's current president, Robert Zoellick, leave at the end of his term, in the middle of 2012.

"Hillary Clinton wants the job," said one source who knows the secretary well.

by Fran (fran at eurotrib dot com) on Fri Jun 10th, 2011 at 03:13:12 AM EST
[ Parent ]

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