Current Events In Emerging Markets

Market Economy

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Can anyone offer some local market color. For the last few weeks EM worldwide have been shaky and several players have run for the sidelines, dropping their EM holdings and buying USTs. Any effects down in DR? . I believe the DR market is somewhat de-linked to other EM, but any impacts there?

Thanks.
 

deelt

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Mar 23, 2004
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I wish I had more time to look into this further. Off the cuff I would say that there may not be an effect now but may be as India continues to invest in DR then yes the potential is there. India is just beginning to show investment interest in DR but it still has a ways to go before their presence is felt on the island.

Since the big issue is oil right now I think DR is just out of the loop on that side but will feel the crunch for it to have access to oil, esp. from EM. Dr is no China. China is moving in and dropping aid/investment money into Nigeria, Sudan, etc. with no strings attached. DR can't afford to do that.

DR can't cut it in the Technological sector since it is unwilling to educate and invest in its populous. Thus it has limited market share access.

The only area they can may be have access to is call centers. We'll see how that goes.

I think given consumption patterns the trade deficit will remain.
 

Market Economy

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Emerging markets (EM) had a tough week after prices drop and correction of about 10% hit several countries. Given the low interest rates that the world has been enjoying for the last few years and the low inflation rates, loads of cash has been poured into EM stocks and bonds making these regional asset classes best performing assets when compared to matured economies.

According to many, the era of free money is coming to an end and with it an increase in inflation. Does this mean that EM assets will be shun by investors and that currencies like the US$ will start increasing in value against other currencies? What about the commodities boom? is it near the end?

Housing prices in the U.S. are losing steam, is this great cash generator giving up?

Note: This is my personal opinion, an should not constitute investment advice. E-mail me at my personal address if you want to develop a dialogue.
 

deelt

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Mar 23, 2004
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My suggestion is not to be so dramatic. EMs are volatile. People who choose to invest in EMs need to deal with the ups and the lows. I have much faith in Bernanke and his management of inflation, but I'm biased.
As for the "era of free money" that is what they said in the 80s with the SnL and in the 90s Clinton boom years, and now in '00s with the housing boom.
As the world becomes smaller I doubt that people will turn away from EMs. People feel like they are in the "know."

No, while some housing markets are cooling some as still gearing up. It's all about keeping up with housing markets and what makes some regions have better investment options than others. NYC in terms of housing markets continues to redefine itself. But in areas like Birmingham, AL need the housing boost.
 

NALs

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deelt said:
No, while some housing markets are cooling some as still gearing up. It's all about keeping up with housing markets and what makes some regions have better investment options than others. NYC in terms of housing markets continues to redefine itself. But in areas like Birmingham, AL need the housing boost.
In general, the housing boom has slowed down nationwide. Of course, there have been some months of spikes in construction, but in general construction and prices have begun to stabilize and in some places, have begun to fall.

Regarding places like NYC (primarily Manhattan real estate), Miami, Las Vegas, etc; please keep in mind that those markets are much more dynamic than other less cosmopolitan places in the US. In markets such as NYC and Miami, just to name two, there is a very strong international element influencing the housing boom and this element is not necessarily tied to national situation.

Those spots are similar to places like Cap Cana or Guavaberry in the DR, places that seem to be on a world of their own influenced by factors beyond the country in which such real estate ventures are found.

-NALs
 

NALs

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DISCLAIMER: Never make an investment decision based on what you have read, heared, and/or believe is going to happen without consulting with your financial advisor. Only you are responsible for your investment decisions.

Market Money said:
According to many, the era of free money is coming to an end and with it an increase in inflation. .... is it near the end?
You are asking questions that no one has a definite answer to, because as the old saying goes "it's not over until it's over".

However, historically the price of Gold increases along with inflation. If you have purchased any bonds (either foreign or domestic) you should look into buying some gold as a hedge for your investment.

Remember, gold in itself is a very speculative investment, but it's much better than the effect inflation has on bonds through an increase in interest rates and thus, a fall in the price of such.

Market Money said:
Housing prices in the U.S. are losing steam, is this great cash generator giving up?
The housing market across the US is a very regional "thing". In some places the boom has leveled, though not busted, while in other markets it continues. The most dynamic markets (ie. NYC, Miami, etc) tend to be the real estate markets with significant foreign influences and those are the markets that are doing better than the more domestic oriented markets. Keep in mind that there are places in the US that have completely missed the boat in this boom all together as well.

-NALs
 

deelt

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Mar 23, 2004
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I was rushed when I wrote my previous posting. I should have been clearer.

The issue is really the opposite of what you cite. It's these smaller towns/cities in AL, NC, MD that are still growing faster in cost. NYC is not a buyers market. It's a renters market. People get real estate brokers to pay rent, not buy property. That's the reality of most dense urban areas and 101 fact for people who work in this field.


NALs said:
In general, the housing boom has slowed down nationwide. Of course, there have been some months of spikes in construction, but in general construction and prices have begun to stabilize and in some places, have begun to fall.

Regarding places like NYC (primarily Manhattan real estate), Miami, Las Vegas, etc; please keep in mind that those markets are much more dynamic than other less cosmopolitan places in the US. In markets such as NYC and Miami, just to name two, there is a very strong international element influencing the housing boom and this element is not necessarily tied to national situation.

Those spots are similar to places like Cap Cana or Guavaberry in the DR, places that seem to be on a world of their own influenced by factors beyond the country in which such real estate ventures are found.

-NALs
 

NALs

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Jan 20, 2003
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deelt said:
I was rushed when I wrote my previous posting. I should have been clearer.

The issue is really the opposite of what you cite. It's these smaller towns/cities in AL, NC, MD that are still growing faster in cost. NYC is not a buyers market. It's a renters market. People get real estate brokers to pay rent, not buy property. That's the reality of most dense urban areas and 101 fact for people who work in this field.
I was referring to the upper income segment of prime Manhattan real estate. (Ie. luxury condos, penthouses, and such).

I found your previous post slightly atypical of what you usually post, since usually you are very clear of what you mean. In any case, thanks for the clarification.

-NALs
 

deelt

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Mar 23, 2004
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Huh?

Last time I checked Market Economy works in the field this is why he needs a disclaimer statement. Why are you using one? Are you now fronting as someone who is in DOWS and/or is regulated by the SEC?

Wow, now you are more expert than the expert. Funny. :surprised :ermm:

NALs said:
DISCLAIMER: Never make an investment decision based on what you have read, heared, and/or believe is going to happen without consulting with your financial advisor. Only you are responsible for your investment decisions.


You are asking questions that no one has a definite answer to, because as the old saying goes "it's not over until it's over".

However, historically the price of Gold increases along with inflation. If you have purchased any bonds (either foreign or domestic) you should look into buying some gold as a hedge for your investment.

Remember, gold in itself is a very speculative investment, but it's much better than the effect inflation has on bonds through an increase in interest rates and thus, a fall in the price of such.


The housing market across the US is a very regional "thing". In some places the boom has leveled, though not busted, while in other markets it continues. The most dynamic markets (ie. NYC, Miami, etc) tend to be the real estate markets with significant foreign influences and those are the markets that are doing better than the more domestic oriented markets. Keep in mind that there are places in the US that have completely missed the boat in this boom all together as well.

-NALs
 

NALs

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Jan 20, 2003
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deelt said:
Huh?

Last time I checked Market Economy works in the field this is why he needs a disclaimer statement. Why are you using one? Are you now fronting as someone who is in DOWS and/or is regulated by the SEC?

Wow, now you are more expert than the expert. Funny. :surprised :ermm:
Yes deelt, but Market Economy is not the only person reading these posts.

While I recognize Market Economy's experience and knowledge in this sphere, I also acknowledge that when I or anyone else post something on the public forum, plenty of other people to whom the post was not directed towards will also read it and perhaps use the info. For this reason, I posted the disclaimer.

-NALs
 

deelt

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Mar 23, 2004
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True enough, but not having a disclaimer hasn't stopped you before, as Scandall would say, from blowing smoke out of your arse.

The tone and the info are just not tight. But everyone has a right to their opinions. Yes, even you.

NALs said:
Yes deelt, but Market Economy is not the only person reading these posts.

While I recognize Market Economy's experience and knowledge in this sphere, I also acknowledge that when I or anyone else post something on the public forum, plenty of other people to whom the post was not directed towards will also read it and perhaps use the info. For this reason, I posted the disclaimer.

-NALs
 
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Market Economy

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Deelt,

No, not more expert that the experts (and who are they by the way???), but it is a precaution to highlight the fact that DOWS' members are not offering investment advice and that those who read this board should be forewarned that what we post is only our personal opinion.

That aside, the equities market took a tumble yesterday. Why? Inflation fears?. Peter Bernstein is quote in a great NYT articles where he explains that the recent runup in gold prices is NORMAL. He says follow the GRIM index. Read on.

Note: This is my personal opinion, an should not constitute investment advice. E-mail me at my personal address if you want to develop a dialogue
 

NALs

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Jan 20, 2003
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Market Economy said:
That aside, the equities market took a tumble yesterday. Why? Inflation fears?. Peter Bernstein is quote in a great NYT articles where he explains that the recent runup in gold prices is NORMAL. He says follow the GRIM index. Read on.

Note: This is my personal opinion, an should not constitute investment advice. E-mail me at my personal address if you want to develop a dialogue
I have yet to read the article, if I get to read it. However, it is "normal" for a spike in gold prices when there are inflationary pressures in the economy.

There has been inflationary pressures on the US economy since autumn of 2005 and consequently the price of gold has been increasing, as has been expected.

Following the GRIM index is very good advice, but lets not loose sight of the price of gold because it has almost always been an indicator of inflation either within an economy or anticipated and such circumstances warrants the attention of investors, particularly those holding government bonds.

For this reason gold can be used as part of a good hedge strategy against the risk of holding bonds in a time of increasing inflationary pressures, which threatens the value of the bond itself.

This leads me to my answer to your equities market question. Since the price of gold has been on an upswing and an upswing in gold means there are inflation pressures on the economy, then it could very well be that inflation fears are causing the tumbling in equities we have been witnessing lately.

Keep a keen eye on the price of gold, it tells more than most people give it credit.

-NALs
 

Market Economy

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Nals I see, you are a gold junkie, but I like your reply. Thanks.




Note: This is my personal opinion, an should not constitute investment advice. E-mail me at my personal address if you want to develop a dialogue
 

deelt

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Mar 23, 2004
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I hear you. To me, an expert is some one who is paid to do what they do and is regulated by the SEC. The fact that Cid is #1 (according to Forbes) I would say qualifies him as an expert. But that's my humble opinion. NALs has a history on this website that make his "contribution" suspect, and frankly wordy and just plain time consuming. So tread with care.

Regarding the article you referenced, I think I have to agree that all the signs are there for a down turn on the US economy, namely the increasing prices of oil and truly fiscal irresponsibility by the Republican lead Bush Administration. (shocking!).

In light of the never ending Iraq invasion, China's new thirst for oil, we need an expert to lead the economy and has mastered the subject of oil markets. This is an area Bernanke commands. Apparently based on the article, DR-CAFTA is apparantely doing more harm than good to the US, given the severely of the US's trade deficit.

While I am not adverse to Paulson (ex-Goldman Sachs CEO, worth $700 mill +) leading Treasury, post Snow's resignation, he's a political appointee. Knowing what I know about the Bush Admin, his contribution will be deeply WH driven, as compared with Rubin (Clinton) or O'Neil (GWB, first-term) and other free thinkers who were allowed to do what they do best, allow money to make more money. Bernanke is beyond that despite that fact that he has to know how to play the game.

Deelt

PS. The meat of the article you reference is as follows:

An increase in the value of gold is really the same thing as a decrease in the value of a dollar, relative to the oldest, most solid benchmark of all. And there are plenty of reasons dollars should be losing value. Americans have been sending billions of them overseas to buy other countries' products, causing the world to be awash in dollars. The federal government has been spending much more money than it takes in, and the Federal Reserve pumped the economy full of cash a few years ago to avoid a deep recession.

There are legitimate reasons, in other words, to wonder if the gold surge is the start of the crisis that economists have long feared. "The gold value of the dollar appears to be going into free fall," two investment strategists recently wrote on The Wall Street Journal's editorial page, long a home for gold worriers. "What we are facing is a money crisis: an alarming outbreak of inflation and all its consequences."

...

When gold is moving with those other materials, it's a sign that basic economic dynamics are at work. Prices rise when the world's economy is growing rapidly, and they fall when there is more supply of the commodities than demand for them.

But when gold prices spike and prices for other materials do not, Mr. Bernstein says, it means that investors are treating gold as a place to store their money in advance of a crisis. This is precisely what happened in the late 1970's.

In the last few years, however, the prices of gold and the other commodities have gone up sharply. Computer makers are using copper, airplane manufacturers are buying more aluminum and the rise of India — the world's most gold-crazy country — is increasing the demand for jewelry.

And because commodity prices actually fell from the late 1980's to 2002, the recent surge has in part been making up for lost ground. The price of gold still hasn't risen as much, in percentage terms, as the price of milk over the last 20 years.

...

There is no question that the trade deficit and budget deficit are real problems, as Mr. Bernstein acknowledges. "All the necessary conditions for a mess are there," he said. The mess itself, however, doesn't seem to have arrived.


Market Economy said:
Deelt,

No, not more expert that the experts (and who are they by the way???), but it is a precaution to highlight the fact that DOWS' members are not offering investment advice and that those who read this board should be forewarned that what we post is only our personal opinion.

That aside, the equities market took a tumble yesterday. Why? Inflation fears?. Peter Bernstein is quote in a great NYT articles where he explains that the recent runup in gold prices is NORMAL. He says follow the GRIM index. Read on.

Note: This is my personal opinion, an should not constitute investment advice. E-mail me at my personal address if you want to develop a dialogue
 

mondongo

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Jan 1, 2002
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Market Economy,
Please pardon the intrusion, but would you mind divulging some of your general educational/professional training & experience?
 

deelt

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Mar 23, 2004
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To avoid any confusion, Market Economy is not Cid. Market Economy is one of the moderators. If you look at the sticky:

The moderators of this forum, which can also be accessed through the
DOWS website, are Robert Abreu, Emmanuel Martinez, and Josefa Sicard
Mirabal. See their biographies at http://www.dows.ws

Given what I know about what each does and their interests, I believe we have been speaking with Robert Abreu.

But s/he can speak for her/himself and should.

mondongo said:
Market Economy,
Please pardon the intrusion, but would you mind divulging some of your general educational/professional training & experience?
 

Dolores1

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May 3, 2000
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Market Economy is Emmanuel Martinez.

This is his background, as posted on the DOWS website:

Emmanuel Mart?nez

Emmanuel Mart?nez serves currently as Vice President in the Emerging Markets Research group of Bear, Stearns & Co. Inc. In this capacity he monitors the developments that affect the valuation of sovereign and corporate debt for Central America and Caribbean issuers and offers valuable advice to emerging market investors.

Mr. Mart?nez began his career in 1996 at AIG Risk Management as a staff accountant in their financial reporting unit. In November 1996 he began working at Goldman Sachs & Co.’s NY Treasury Operations department. In March 2000 he transferred to Goldman Sachs Asset Management (GSAM) to work as a Portfolio Administrator in the GS Private Equity Funds. Through Feb 2004 Mr. Mart?nez worked as an Associate in the Alternative Investments Group of GSAM concentrating his efforts in the administration duties of a range of marquee products (hedge funds, private equity funds and special situations vehicles) offered by GSAM to governments, high net worth clients, and institutions worldwide.

Mr. Mart?nez graduated in 1996 from Bernard M. Baruch College ( CUNY) with a BBA in Accountancy and completed a second BBA in Finance and Investments in 1998.
 

deelt

Bronze
Mar 23, 2004
987
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Thanks for the correction.

Dolores said:
Market Economy is Emmanuel Martinez.

This is his background, as posted on the DOWS website:

Emmanuel Mart?nez

Emmanuel Mart?nez serves currently as Vice President in the Emerging Markets Research group of Bear, Stearns & Co. Inc. In this capacity he monitors the developments that affect the valuation of sovereign and corporate debt for Central America and Caribbean issuers and offers valuable advice to emerging market investors.

Mr. Mart?nez began his career in 1996 at AIG Risk Management as a staff accountant in their financial reporting unit. In November 1996 he began working at Goldman Sachs & Co.?s NY Treasury Operations department. In March 2000 he transferred to Goldman Sachs Asset Management (GSAM) to work as a Portfolio Administrator in the GS Private Equity Funds. Through Feb 2004 Mr. Mart?nez worked as an Associate in the Alternative Investments Group of GSAM concentrating his efforts in the administration duties of a range of marquee products (hedge funds, private equity funds and special situations vehicles) offered by GSAM to governments, high net worth clients, and institutions worldwide.

Mr. Mart?nez graduated in 1996 from Bernard M. Baruch College ( CUNY) with a BBA in Accountancy and completed a second BBA in Finance and Investments in 1998.