Hello Victor!
I don't know. On an earnings basis, I just can't see myself buying anything, yet. It would not be the first time, however, that I've played Tail-End Charlie to a rally I did not expect.
Not much of a trader anymore, I guess.
I commented last year at the SI Thailand topic that I felt there would be bigger trouble than anyone was guessing for South American markets should the East Asian situation get out of hand. Makes me wonder about a few items. Some of which I think speak for themselves.
1) China is currently utilising tax, tariff and interest rate incentives to spur growth. These incentives are adding more pressure on neighboring export economies.
2) More than 30% of Chile's exports prior to last year had gone to East Asian markets. The IGPA just broke below its 52-week range. The IPSA is near it's low, as is Argentina's Merval.
3) A significant amount of private and state revenues in Brasil, Chile and Peru are commodities-driven. In the last 10 years the Asian markets have been eating-up the lion's share of many industrial and food commodities produced world-wide. Just as an example: East Asian markets consume 1/3 of world copper production and about 2/3 of U.S. corn and beef exports. Commodities prices will probably remain low until the Western Pacific pulls out of the current malaise.
4) I don't like what I'm hearing about resurgent insurrectos in Bolivia, Colombia and Peru. And why is Brasil buying an aircraft carrier?
5) The DJIA's toying around 9000 doesn't show much strength.
6) Prior to this year more than 60% of U.S. west coast exports went to East Asia.
Things could, and maybe should, be much worse. Maybe that could and should will provide me w/ the long-term entry I've been waiting for.
---------------------------------------------------------------------
Argentina's Domingo "Mingo" Cavallo in a recent (April) interview, when asked what risk the East Asian crisis presents for Argentina ...
The impact will mainly take the form of increased competition in export markets. I think that with the large devaluations in Asia, those countries will be offering goods at much lower prices in almost every market. That is already reducing commodity prices and export prices and this creates problems for countries like Argentina, Chile, and Brazil. But, if we continue introducing reforms that increase productivity and we eliminate taxes that increase the cost of labor, we may very well adjust to this increased competition.
---------------------------------------------------------------------
I almost forgot! Senor Cavallo is running for the Presidency next year. The current front-runner is a female. Just like in Venesuela!
I wonder what's going on down there? |
