Global Investing

from Davos Notebook:

Will Goldman’s new BRICwork stand up?

RTXWLHHJim O'Neill, the Goldman Sachs economist who coined the term BRICs back in 2001, is adding four new countries to the elite club of emerging market economies. But does his new edifice have the same solid foundations?

In future, the BRIC economies of Brazil, Russia, China and India will be merged with those of Mexico, Indonesia, Turkey and South Korea under the banner “growth markets,” O'Neill told the Financial Times.

Hmmm.  Doesn't quite grab you like BRICs, does it? The Guardian helpfully offers an amended branding banner of  "Bric 'n Mitsk" (geddit?). But which ever way you cut it, it's hard to see a flood of investment conferences and funds floating off under the new moniker.

Ten years ago, Goldman had this field to itself. Now more and more acronyms are being bandied around by  banks  seeking to pique investors' appetite for higher returns.

Goldman has already launched the N-11, or Next Eleven countries, and other contenders include the VISTA economies (Vietnam, Indonesia, South Africa, Turkey and Argentina), the CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa) and the EAGLES (Emerging and Growth-Leading Economies).

from MacroScope:

Argentina set for wheat windfall

Not everyone is upset about the 50 percent surge in wheat prices over the past month.

Wheat's rise to 2-year highs was caused first by heavy rains in Canada and now by a Russian export ban that was triggered by its worst drought in decades. There are floods in Pakistan, another major wheat grower. But while the wheat market shenanigans are triggering much hand-wringing across developing nations, Argentina, one of the world's top seven wheat exporters, may be set for a windfall.

Farmers there are increasing wheat plantings, the Buenos Aires Grains Exchange says. The South American country is expected to export around 8 million tonnes of wheat in the 2010-2011 year. With wheat futures on the Chicago Board of Trade at around $8 a bushel, a very simple calculation shows export revenues are going to very significant.

from MacroScope:

G20 dilemmas amongst the golf balls

Interesting dilemmas facing G20 countries as their finance ministers and central bankers get together on the golf ball strewn Scottish coast ( a meeting in St Andrews we will be Live Blogging on MacroScope, by the way).

First, you have the Brazilians who are worried about hot money and have already slapped a tax on foreign investments in domestic bonds and stocks in order to cool down capital inflows.  They want the G20 to take action against what their central bank chief calls "imbalance- and bubble-building".

Next you have the Americans and other big economies who know that the huge amounts of stimulus they have put into the world economy have to be removed eventually. They are not ready to do it yet, but expect the G20 countries to discuss how they are going to "sequence" the great unwinding.

But what does Argentina’s presidential couple think?

Markets are waiting for Argentine President Cristina Fernandez and her husband and predecessor ex-President Nestor Kirchner to show they support plans for Argentina to return to international credit markets after a long absence.  Fernandez and Kirchner are known as the presidential couple and no major Argentine policy move can go forward without their stamp of approval.  Decision making is seen as almost entirely concentrated in them.

So, no matter how much new Economy Minister Amado Boudou talks about his plans to resolve Argentina’s different debt problems and issue a new global bond, eyes are on the presidential couple.  Boudou says he wants to move forward on various fronts. First, he wants to reopen a massive 2005 restructuring to attract holders of some $20 billion in defaulted sovereigns to neutralize their lawsuits — but this means sending a bill to Congress, something the president would probably announce. Secondly, he wants to normalize rlations with the International Monetary Fund, which were derailed a few years ago.  Lastly, he wants to restructure some $6.7 in defaulted debt to wealthy creditor nations in the Paris Club. 

Argentine bonds have rallied strongly on expectations that Boudou will make progress on these fronts, but the rally could fizzle without prompt concrete steps.

Not quite 99 emerging market beers on the wall

Should emerging market investors set aside their spreadsheets and crack open a cold one?

Their markets have zoomed higher from the March lows, with MSCI’s emerging markets stock index up 81 percent. Are they heading for a fall? Will investors soon be crying in their beer? And if so what kind?

Broker Auerbach Grayson held a rooftop fete this week showcasing emerging market versus developed market beers, with nary a Yankee brew in sight.

Financial crisis helps Berlin take root for fashionistas

Berlin is slowly but surely establishing itself as one of the top global catwalks for the bold and the beautiful of the world of high fashion – and the global financial crisis seems to be doing nothing to slow it down.

 

For the fifth time, up-and-coming fashion designers are meeting in the German capital to present selections from their latest collections at the Berlin Fashion Week, which is attracting increasing interest from the international fashion scene.

 

Maia Guarnaccia, vice president at IMG Fashion Europe, which organises the fashion week in Berlin as well as similar events in New York, Miami and Amsterdam, said last year marked a turning point for Berlin.

from Global News Journal:

Argentina’s Kirchner shows softer side on campaign trail

Argentina's Nestor Kirchner developed a reputation as a sharp-tongued leader who did not hesitate to upbraid company executives, opposition leaders and journalists as president.

Now, he's looking to showcase a softer side as he returns to the campaign trail -- this time as a candidate for Congress.

His high-profile candidacy has taken center stage in Argentina's June 28th congressional elections.