Jim O'Neill Is Back To Pitching The Great Consumption Potential Of Turkey, Bangladesh And Iran... Next Up - Uranus
There are permabulls, and then there is Jim O'Neill. The Man U fan explains why, after it has been consistently discredited, people do not believe in decoupling: "because they are not prepared to get it." And just because people are really stupid and just don't get it, O'Neill pitches Indonesia, Turkey, Nigeria and Bangladesh, and, oh yes, Iran, as the "Next 11" once again. Because, gasp, 9 of them are up year to date. We wonder if Jim recalls what happened to the Russian market in 2008. Somehow we think his selective memory may have shut that one out. Also, it turns out Jim O'Neill does not appreciate fan mail bourne out of "weird blog site" commentary: "I received quite a few incoming hostile emails in response, and references to some weird blog sites who apparently opine on my views." Oops.
The latest Kool Aid blast Jim
Back To School.............. September 3, 2010
Labour Day weekend ( already you say), 2/3 of the year over, and next week, everyone will be back with enthusiasm , drive and passion for the wonderful opportunities that lie ahead !……………hummm. Anyhow, dear poor suffering reader, of note on my radar;
1. The World is Down but Not Out, is the title of the Global Economics Weekly that I published Wednesday Sept 1st, ( circulated to this list soon after), and reflects my view of how all you should ponder life this week. Interestingly, I received quite a few incoming hostile emails in response, and references to some weird blog sites who apparently opine on my views. Most of the tone of these kind words (!) pertained to some aspect of me being persistently optimistic about life….. Well, frankly, I would rather be regarded with that bias that the dreary pessimistic nonsense that underlies much of what those bloggers probably write about. Some that know me for a long time would know it is not quite how many fashionably perceive but …
2. Why the World is Not Out? At the core of this issue, and why so many people can’t get it, because they are not prepared to get it, is that us wonderfully developed countries aren’t the key drivers in –economic-life anymore. Symptomatic of the considerable pieces we have written about BRIClife for what is approaching nine years soon , is an excellent 166 page report just published by the OECD, “ Perspectives on Global Development 2010”. Anybody that doesn’t realize how many hundreds of millions that have been taken out of global poverty the past 10 years or so, the billion or so that are probably going to be over the next 20 years, or that still thinks when the” US catches a cold the world catches pneumonia” should buy a copy and take it on any Autumnal weekend away you might be planning.
Alternatively, or in addition, you could actually read our Weekly and look at some of the evidence, and look at many of the ongoing pieces of evidence to demonstrate the changing landscape. There have been endless again this week.
3. Indian GDP at 8.8pct for Q2 for example, more than double the “ hindu “ rate of growth despite the US and developed world challenges. When China prints anything decent still, I continue to read widespread commentary about the data being “ fiddled”…same for India? I think not, dearest grizzlies….
4. Australian GDP for Q2 stronger than expected, no recession for 20 years…………
5. Full page article in the FT on Wednesday ( I think) about booming luxury goods demand, and for luxury goods company ownership in Asia.
6. Remarkable jump in EU consumer confidence ( yes EU……!)
7. Risk on /risk off. In the devoted professional world of trading and investing, the usual weird mood surrounding this topic dominates , even if it isn’t really true or useful. As I remarked to many people internally in a voicemail today, it isn’t just me that thinks this is a bit daft, it is the markets themselves. I think you might regard our “ Next 11” countries as involving some risk. 10 of the 11 have some sort of equity market, Iran being the exception. As of this morning, 9 of them are up year to date, some of them considerably, and 4 double digit gains. Indonesia, Turkey, Nigeria and Bangladesh. So what is all this – US asset based- risk on or off, actually all about?
8. The US, has –finally-enjoyed a bit of a respite from the disappointing run of data this week, with the ISM and second consecutive week of a decline in job claims. One should not get carried away by this, especially the ISM evidence as the inventory/orders guts were less clear, and of course, it follows weeks of significant disappointments. Of growing interest , or what should be, is more and more talk about fresh fiscal stimulus, and it might involve tax cuts…..So possible fiscal stimulus, incredible accommodative financial conditions from the Fed, and markets are going to fall apart? I think not.
9. The UK slowing- a bit. No two ways about it this week. With both the manufacturing and services PMI showing meaningful steps lower, this adds to other bits and pieces that show some of the strong recovery momentum here has faded. Ben Broadbent and Kevin Daly have discussed that in recent days. No doubt this will add to the never ending intense media debate about US fiscal tightening and scaring everyone, but please read what Ben and Kevin say, the UK is slowing, but it is a bit………
10. Europe , EMU and the ECB. Finally Erik Nielsen and Alexandre Kohlas published an extremely interesting paper, Global Paper no 203 this week, entitled, “ The ECB’s Role in Shaping the future of EMU policy co-ordination”. In it, they suggest that the ECB could use a rather simple economic based scoring system to determine the rates at which they deal with sovereigns, and thereby directly act as a form of discipline on the whole system. I suspect it will , and hope it does, get a lot of attention.
Just seen the payroll numbers, what another nice surprise ahead of the weekend that celebrates “ labour”.. Enjoy…
Of course, Jim will focus on the irrelevant number that confirms the economy is deteriorating, but will casually ignore the indicator that confirms that about 65% of the US economy is now on the verge of contracting.