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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: 2MAR$ who wrote (72842)	4/7/2011 7:34:46 AM
From: TobagoJack	Read Replies (1) \| Respond to of 219852

bye bye amsc, as china buyer 'exports' deflation to amsc ;0) they need to consider engaging with chinese partner and sell part of the company and relocate the manufacturing to within the domain of the new sovereign, and fast i have always found it amusing that some believe for example that qcom ip can hold competition water to until the day kingdom comes i have always remained suspicious of all tech companies except at the roll-out early stage when cretins can make money and disbelievers cannot had not shorted intel puts since 2001 what would be the point of technology if it cannot be copied? i am also suspicious of ideas such as investing in 'water', as if anyone would let the holder of the water reap wonderful returns for a good long time

To: 2MAR$ who wrote (72842)	4/7/2011 10:17:07 AM
From: TobagoJack	Read Replies (2) \| Respond to of 219852

just in in-tray, per greed n fear · One theme of the new Asia Maxima (Cyclical and systemic, 2Q11) is that, with growing hopes that China inflation should peak out this quarter, there are increasing prospects that Asia should resume its outperforming trend. · GREED & fear’s view remains that long-term outperformance in global equities will continue to be achieved by overweighting Asia and emerging markets and those multinationals, be they based in America, Europe or Japan, whose revenue streams are geared to emerging markets. · A further oil- and food-driven price spike would kill current cyclical optimism on the US since these higher prices will act like a tax on ordinary Americans’ post-tax discretionary income. In GREED & fear’s view, the lack of income growth in America is the key fundamental point to focus on in the US amidst all the celebration of increased job generation. But it is also evident that a Bernanke-led Fed is, unlike the ECB, not going to be pushed into tightening by higher commodity prices. · GREED & fear expects any pickup in US consumption or bounce in retail sales to be short-lived. The biggest single issue for most ordinary Americans remains house prices. The US housing market remains beset by excess supply. There also remains a growing problem of negative equity in terms of the number of mortgages under water. · If by the end of the year the housing market has not recovered properly, it is likely in GREED & fear’s view that it will become once again a topical focus of politicians given that 2012 is a presidential election year. This could potentially lead to market-unfriendly policies such as mortgage-debt relief. For now the US housing market is not recovering in any meaningful sense, but nor is it collapsing given the ongoing support to the market provided by the effective socialisation of mortgage credit risk. · It is only a matter of time before investors question their cyclical optimism on the US economy, a bullish sentiment driven in classic reflexive fashion by the QE2-driven rally in the stock market. This optimism could be short circuited now by a further spike in oil, or it may have to wait until closer to June when the Fed is due to end its scheduled purchases of Treasury bonds. Or the bullishness can run for longer simply because there is no sign whatsoever that the Federal Reserve is contemplating tightening. · A still deflation-obsessed Bernanke-led Fed is likely to use any weakening in the data and/or further Middle East-driven spike in commodity prices to argue for continuing easing, if not a “QE3”. And the next wave of quantitative easing might include a greater range of private debt securities and not just Treasury bonds. · The most likely longer-term outcome for America remains for GREED & fear an ongoing ratcheting up of increasingly aggressive fiscal and monetary easing, in response to the economy’s continuing failure to gain traction in the sense of a proper private-sector releveraging. · The biggest systemic risk in the world is now a US sovereign-debt crisis, which would likely mean the end of the US dollar as the world’s reserve currency. The sign that this risk is becoming real will be when the US Treasury bond market starts to trade on supply dynamics. · America is more clearly than ever on the path to a sovereign-debt crisis. First, the Federal Reserve is well on the way to monetising the deficit. Second, the federal government’s fiscal condition has deteriorated dramatically ever since the massive bailouts and aggressive stimulus prompted by the financial crisis. · The obvious explanation for this year’s US dollar weakness is foreigners’ distrust of QE2 and their understandable concern that QE2 is likely to be followed, sooner or later, by QE3. The longer-term risk is that quantitative easing, like zero rates, becomes a trap in the sense that it is easier to enter such policies than to exit them. · Investors should continue to presume that America is on the path to a fiscal crisis unless there is a sudden change of behaviour in Washington; in the sense of concrete evidence of a willingness by both the executive and legislature branches of government to confront the issue of rapid fiscal deterioration. · If an end to tightening in China would set up Asia for renewed outperformance, Asian equity valuations remain far from excessive; most particularly from a US-dollar-based investor’s perspective given the continuing long-term potential for Asian currency appreciation. · A renewed period of outperformance by Asian markets is likely to coincide with reacceleration of capital inflows into the region. GREED & fear’s view is that Asia remains geared to more of an asset-inflation cycle. These same pressures can also lead in a QE3 world to a renewed rise in Asia’s heavily food- and energy-weighted CPI indices. Ultimately, these hot-money pressures will eventually force Asian policymakers to discard altogether their mercantilist instincts and tolerate much greater currency appreciation. · The Asia ex-Japan portfolio outperformed the regional index in the past quarter, rising by 3.8% compared with a 0.9% rise in the MSCI AC Asia ex-Japan Index. This is somewhat remarkable since 32% of the portfolio was invested in India which was Asia ex-Japan’s worst-performing market last quarter. Since its inception at the end of 3Q02, the portfolio has risen by 686% in US-dollar terms, compared with a 232% rise in the MSCI AC Asia ex-Japan Index and a 63% rise in the S&P500. · GREED & fear continues to recommend that investors who want to hedge remain short European financials. While European bank stocks bounced last quarter, helped by the euro’s rally, in GREED & fear’s view it is only a matter of time before the sovereign debt exposure of European banks again occupies the market’s attention. · The Japan long-only portfolio marginally underperformed the Topix in the past quarter, declining by 3.8% in yen terms compared with a 3.3% decline in the Topix. The portfolio is now down 10.9% in yen terms since inception on 17 March 2005, while the Topix has declined by 27.1% over the same period. The 15% leveraged position added to the portfolio in the wake of the extreme correction that followed last quarter’s natural disaster will be maintained. · The surge in monetary base in March is concrete evidence that the earthquake has, for now at least, changed the dynamic of Japanese monetary policy. Clearly an easier monetary stance in Japan is yen bearish. But for GREED & fear the key variable remains the Fed. Investors should assume a significant decline in the yen, which GREED & fear would define as a move beyond ¥90/US$, only if they think the Fed is going to raise rates. This is not GREED & fear view as already explained. Please consider the environment before printing this email. The content of this communication is subject to CLSA Legal and Regulatory Notices These can be viewed at clsa.com or sent to you upon request.