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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Mark Adams who wrote (41116)	11/7/2003 5:49:58 PM
From: elmatador	Read Replies (1) \| Respond to of 74559

Overlook the informal sector at your peril. I always kept an eye on grey market, black market and shadow economy. Three years ago the electricity market in Brazil collapsed. The official Brazil had forgotten the unoffical Brazil. They were basing long term plans on government statistics. Electricty usage was growing much faster than the official economy statsctics. When they discovered the implications -owing to long lead times form energy projects- they hit the wall.

To: Mark Adams who wrote (41116)	11/8/2003 3:05:59 PM
From: Mark Adams	Respond to of 74559

Andy Xie comments on deflationary savings in China; China's massive income growth in the past two decades has flowed disproportionately into savings rather than consumption, causing serious deflation in most consumer markets. The withdrawal of the state-sponsored rice bowl and public housing and the escalation in education expense have caused the savings rate to increase in the past five years. China's consumption to GDP ratio may reach a 30-year low in 2003. We estimate Chinese net household wealth at 140% of 2003 GDP, up from 15% two decades ago. Household wealth is still far from the stable level of 400% of GDP that would be sufficient for sustaining retirees' living standards. Thus, the Chinese household sector will likely remain a deflationary force for many more years, in my view. continued... morganstanley.com