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.

With the adventurous spirit and dedicated work ethic that can be found in all experienced emerging markets correspondents, I set in sampling the emerging brews first. No sip, swish and spit here, so the descriptions may get a bit more fuzzy as you read through the list.

It started with Argentina’s Barba Roja Aged Red Ale, the strongest of the evening at 9 percent alcohol. Not the one to slake your thirst on a hot August night, but it certainly can make your head spin faster than you can say “devaluation.” The smell is powerful, picking up deep scents of caramel. The taste is sweet as most extra-strong brews tend to be, but the finish is mild on the back of the palate. If only the Argentine government and its debt holdouts could settle up as gracefully.

Next up was another dark beer, this time from Brazil. The Xingu Black Beer from the Cervejaria Sul Brasileira is based on the traditional black beers made by indigenous populations in the Amazon. It is rich and sweet, with an overwhelming chocolate flavor that gets diluted by some bitterness from the hops after it sits on the tongue. It’s akin to drinking liquid bread, no butter necessary. Much like Brazil’s economy (and its president, left), this beer is complex, with a myriad of flavors hitting you all at once.

The emerging market beer that surprised the most was the BeerLao Dark from the Lao Brewery Company. Again, this was more suitable for a hot night — a light brew with plenty of body. It did not have any kind of nose to it but the dark amber color were deceptive, full of caramels and roasted malts. “Under the hand of a Russian-trained female brewmaster, their beers have become refined Laotian versions of old European beer styles,” according to the tasting notes. Communist Laos has said it wants to open a stock market in 2010 with help from South Korea and Thailand. They’ve got the right beer for the right climate, so maybe they’re onto something with the new bourse.

Kenya’s Tusker Premium from East African breweries was in my mind the “hit and run” beer of the evening. It was crisp and light with an earthy bite of the tongue at first sip, but faded extremely quickly to its watery base. One can detect echoes in the Nairobi stock market, which is up 38 percent from the March low but has faded since July.

Carib Brewery’s Royal Extra Stout from Trinidad was the Caribbean entry with a hefty alcohol content of 7.2 percent. It smelled of burnt oats, was dark and very sweet with a heavy aftertaste. Perhaps that is why the tasting notes say it pairs well with desserts. In any case it was a sweet week for state-owned energy company Petrotrin. Low oil prices forced the company to come to the  market seeking funds to pay for infrastructure upgrades, but it managed to sell $850 million in debt albeit at a discount.

On the developed markets side, some well known entries plus a new arrival. But the buzz is brewing here so bullet points below.

• Cooper’s Sparkling Ale from Australia was crisp and light but had body to it, lingering on the palate with a slightly bitter aftertaste.
• St. Bernardus Wit from Brouwerij St. Bernardus - Traditional Belgian wheat beer style. Slight effervescence brings an immediate smile.  Very balanced and satisfying without overpowering.
• Czechvar from Budweiser-Budvar (Czech Republic a developed market? Well, maybe as far as brew masters go.) Meets the expectations from a great beer drinking making nation. Crisp but with heft, unlike the American version. Imagine downing one with cooked meats on a bone for dinner with three feet of snow outside. Oh Prague!
• Spaten Optimator from the Spaten-Franziskaner Brewery in Munich. Another liquid bread entry created by monks 800 years or so ago. Smelled like a loaf of rye. Intense sweetness, more than most other dark beers.
• Asahi Black from Asahi Breweries of Japan.  Dark beer that was actually quite light on the palate, with caramels and roasted malts. I have to agree with the notes: it was silky. Apparently only in the U.S. in the last month.

In investing as in beer, the emerging versus developed market battle depends on your location, climate and proclivities. Both sides had broad range and depth. Indulge too much and your adventurous spirit might just get you in too deep, so do everyone around a favor: Drink (and invest) responsibly.

When I walked into the dome of Berlin’s Bode Museum in July for Escada’s Pink Party at the Berlin fashion week, it seemed no one was quite sure whether we were celebrating the resurrection of Escada or whether this was a bombastic way of saying good-bye.

Today, we know it was the latter. Escada failed to get the support it needed from its bondholders to restructure its debt, which was a precondition for further capital injections from shareholders, like the Herz brothers — owners of coffee franchise Tchibo.  

Escada admitted defeat late on Tuesday and said it would file for insolvency this week. Is this the end of an era, the end of Germany’s sole glamorous answer to Armani, Chanel and Versace? 

Escada’s Pink party clearly made an impression. The broad staircases to the left and right of the museum’s entrance were draped with mannequins wearing outfits from all stages of the company’s 33-year history.

Brightly-coloured duvet jackets, diamond-studded jeans, fur coats, lavishly embroidered evening gowns and eighties-style leather jackets dazzled fashionistas and enraged anti-fur protestors outside the swanky soiree, which drew guest such as actress Diane Kruger, super model Nadja Auermann and designer Wolfgang Joop.

Escada has left its mark in the global fashion industry and continues to inspire today’s designers from Paris to Tokyo. Even if Escada fails to crawl back from insolvency, the spirit will live on.

Has German Finance Minister Peer Steinbrueck finally said what many world leaders think but are afraid to say? That the British government won't sign up to meaningful reform of financial markets because it is too worried about what it would mean for the country’s most famous cash cow, the City of London.

The City, which accounts for around 35 percent of global foreign exchange turnover, has been a popular target for critics of capitalism for years. But it has rarely been singled out so bluntly as a problem by one of Britain’s close allies.

Even for a man not known for holding his tongue, Steinbrueck’s remark on Wednesday that Downing Street was impeding reform because it had “practically aligned” its interests with the City, was unusually undiplomatic. Just days before global leaders meet at a Group of Eight summit in Italy, Steinbrueck suggested the British government was plotting a “restoration” of the pre-crisis order to protect its own interests. The United States, by contrast, was now open to reform, he said.

Rather than attempting to smooth ruffled feathers when she addressed parliament on Thursday, Chancellor Angela Merkel picked up the thread, saying she would not tolerate efforts to stall reform at the G8 summit, though she did not name Britain.

Steinbrueck’s comments generated a strong response on German websites. Though he belongs to the centre-left Social Democrats, many readers of conservative daily Die Welt wrote in to praise him. “Finally the truth”, “genius” and “backbone” were some of the remarks his stance provoked. Across the channel, the most popular reader’s comment posted online in an article by Eurosceptic British newspaper the Daily Mail also backed the 62-year-old. “I’m with the German finance minister,” it begins.

Whether one agrees with his approach or not, Steinbrueck knows he is not talking into a vacuum. Large swathes of the commentariat believe not enough has been done to stabilise financial markets over the long term. Martin Wolf, chief economics commentator of the Financial Times, wrote on Wednesday that without radical changes, another banking crisis is inevitable.

PHOTO: German Finance Minister Peer Steinbrueck addresses a news conference in Berlin, May 13, 2009. Steinbrueck said on Wednesday Germany's interbank lending sector was still suffering from weak confidence. REUTERS/Fabrizio Bensch

Automatic teller machines (ATMs) -- 500 of them -- dispensing pieces of gold will be available around Germany, Switzerland and Austria by the end of this year.

That at least is the plan of German precious metals online trading company TG-Gold-Super-Markt.de. The ATMs, to be located at airports, railway stations and shopping malls, are intended to accustom ordinary people to the idea of investing in a physical asset such as gold, the thinking goes.
 
Thomas Geissler, the company's chief executive, said the gold ATMs might even improve relations between the sexes.
 
"I have yet to meet a woman who does not like a gift of gold. It's better than flowers. Flowers are more expensive. They wilt and you (as a man) don't get as many points at home as if you bring gold," he said.
 
A prototype ATM on display for a one-day marketing test at the main railway station in Frankfurt, Germany's financial capital, did indeed reward your correspondent with a 1-gramme (0.0353 ounce) piece of gold.
 
It cost the equivalent of $42.25 -- a 30 percent premium over the spot market price.

The steady stream of less-bad-than-expected economic data has evidently been working as a builder of optimism. Confidence in improved economies and financlal market conditions is growing.

One of the biggest surprises has been Germany's ZEW economic sentiment survey -- which polls analysts and economists in Europe's largest economy. Not only did the index jump this month, it entered positive territory for the first time since July 2007. That was before the credit crisis hit.

U.S. financial services firm State Street also reports that the mood among institutional investors in North America, Europe and Asia is at a nine month high. The main point about this survey is that it is extraplolated from the actual buying and selling patterns within $12 trillion that State Street holds for investors as a custodian.

So, things are on the up. But would that not be expected given the huge amount of money being pumped into the world economy by governments and central banks? Or after global stocks have risen close to 30 percent on a period of about six weeks?

What is always unclear when it comes to sentiment indicators is whether they point to someting new or just reflect exisiting circumstances.

But maybe it does not matter. If people think that things are going to get better, doesn't that just mean they are more likely to?

(Photo: Jeremy Gaunt)