BRICS Not Brits?

Thu, 2014/12/04 - 3:30pm | Your editor

 

One of my two rabbi readers suggested that it was inappropriate for a Jew like me to write articles about the 12 lessons for Christmas. So I am changing the name but not the concept: we will be writing the 12 lessons for El Buen Fin, the Spanish for a good end of the year. I hope to finish this set of lessons by the first night of Chanukah, Dec. 16, when I am taking off for my Winterreise to spend time with family in London. Last year's conjunction of Thanksgiving with the Jewish Feast of Lights, called Thanksgivukah, was a once in a millenium overlap, and this year, thanks to a Jewish calendar “leap month”, Chanukah overlaps instead with Christmas. (Leap months were invented by the Babylonians but because they were used by Jews, the Prophet Mohammed decided that Islam and modern Babylonians should use a purely lunar calendar which has only about 350 days in a year, leading to Muslim holidays falling earlier from one year to the next.)

Near my subway entrance yesterday, some supporters of Lynden LaRouche, a right-wing demagogue, were trying to get signatures for a petition reading: “Dump the Brits, up with Brics.” I'm not sure what this means and afraid to ask the only (ex) LaRouchian I know. But there is something to be said for the slogan as an investing guide.

Today's lesson is about emerging market equities. Let's start with some good numbers. The Shanghai composite last night rose by 4.31%. The Hang Seng index (Hong Kong's) rose 1.6% overnight, closer to the rise in the Nikkei, of 0.9%. All these numbers are in local currencies which for Hong Kong, where the local dollar is fixed against ours, it hardly matters. In Shanghai the 1.3% fall in the yuan does nip the return. Year to date, again in yuan, the Shanghai composite gained 26.8% but only 25.5% in dollars. Hong Kong rose 2.9% in both cases. (The figures are from Jan. 1 to end-Nov. from Barron's.)

Since then Shanghai and Hong Kong offer a link for trading, but obviously the indexes are not moving together.

If movements are uncoordinated between the two main linked Chinese markets, they are even less coordinated with the second leading Chinese market priced in yuan, Shenzhen. The Shenzhen composite in yuan only rose a shade under 14% YTD.

Moreover, China is not coordinated with other so-called BRICS, Brazil, Russia, India, China, and South Africa. The BRICS concept (first only BRIC) was invented by Goldman Sachs. It makes no sense. Russia is was a recovering submerged industrial country when the term was created, Brazil, India, China, (and S. Africa) really are big but very different emerging markets.

Again using indexes, their performance YTD diverges hugely. Russia's index is down 8% in rubles but the national currency is falling because of the impact of sanctions (or a plot by western powers to undermine Russia, in Vladimir Putin's view), So in dollars, Moscow is down 32.5%.

Brazil is up about 6% both in reais and dollars, but fragile because of political concerns.

India in both rupees and dollars is up by nearly a third, thanks to enthusiasm for the as-yet mostly hypothetical Narendra Modi reforms. (This is from The Economist because Barron's doesn't cover the Bombay Stock Exchange.)

South Africa is doing well in rands, up nearly 8% but undermined by the currency's fall against the dollar.

If this rundown tells us one thing, it is that stock markets are moved by different national drivers. Politics matters, but only sometimes. Political unrest probably explains the Hong Kong lag. But some countries are used to political impasse and brush it off, short of a coup at least.

Trade deficits seem to be just as easy to brush off sometimes. Whether a country exports what is going down in price, like oil or gold, matters less than it used to. Let us look beyond BRICS:

The best performing emerging markets this year is Argentina (up 82% in pesos but only up 36% in greenbacks.) The politics as always are appalling, but Argentinians are used to this.

Second comes Egypt, again a gainer because of reformist politics, close to Indian levels in Egyptian pounds but zapped in dollars by depreciation. Having had a military coup did not hurt the Cairo bourse. Nor did the sentencing yesterday of 188 Muslim Brothers to death for collective responsibility for a riot, after a mass show-trial.

Third is Indonesia where we sold too soon because of political uncertainty. Fourth comes Pakistan to which we moved our money, blessed both by a boomlet in Karachi stocks and a stronger rupee, despite political upheaval.

India, Pakistan, and Egypt are net importers; Argentina still is in trade surplus but the figures are possibly manipulated, erratic, and apparently falling. Indonesia has moved to a trade deficit. Brazil trade will be in deficit this year for the first time in the 21st century.

All this is to show that there is no such thing as a “typical” emerging market, or a “predictable” developing country stock exchange. That should not be too surprising. If you look at the figures by country for the euro currency bloc for example, the divergence of stock market returns is just as wide.

There are lessons here. The first is that one should not just buy an emerging markets fund in the hope that the managers can spot where the goodies are. Some funds simply track indexes and aim to own the leading companies in a dozen emerging markets.

But quirky managers operate differently. You may become over-invested in oddball picks like Ukrainian bonds (which a Templeton manager has piled into so fiercely that his fund now owns half the bonds outstanding). I want my quirky managers to have skin in the game and preferably run only small pools of money. That allows them to buy smaller stocks and avoid the big kahunas, often family- or state-controlled in emerging markets.

Our recommendation is not to buy index funds if there is an alternative. We try to avoid country funds from the more accessible markets (not including India and China where exchange controls still operate). Our ventures into Chinese small cap stocks listed on Wall Street and in London have been less brilliant. But in Hong Kong and Jo'burg some of our picks if not all are doing well.

Nor do we stick to BRICS. We have positions in countries BRICS pickers of stocks ignore: Colombia, Panama, Mexico, and more.

The Global Investing team which includes two Latinos, three Chinese Americans, and two Indians (covering India and South Africa respectively) are all on the hunt for mispriced equities. We are stock pickers first and foremost in emerging markets as in developed ones.

One trick we use is to invest in emerging markets indirectly, buying an Australian firm developing resources in Argentina or a Canadian one in Ethiopia. We use well-regulated global banks from Canada or Panama to invest in Latin American and Caribbean banking.

Via one Singaporean and 2 British companies we gain some exposure to e-commerce and infrastructure in China, Russia, and Myanmar. The worst disaster in that pool is the Chinese share, not what you would expect, about which paid subscribers get to see the bad news below. A fund (becoming a REIT) is our play on Mongolia.

Rather than aiming at well-plowed countries, we aim to find closed-end and exchange-traded funds for African or Pakistani investment, one in the UK and one in Hong Kong. A Dutch firm gets us into Russian internet, a South African into Chinese.

We also like quirky managers who get us into smaller stocks from Latin America, Mexico, or the China Region, all three suffering from a lack of brokerage following to get investors to buy them. Closed end funds trade with market sentiment, and tend to be abandoned after the initial public offering; the more so if, as in these cases, they are singlets, the only CEF from the manager. These funds trade at mouth-watering discounts form their net-asset values.

This is a diversified world and we will do well only with some of these plays. So we own a lot of little positions. We work at it. We will not make money from every one of our ideas. But we will make more money than rigorous indexers. We will probably beat big fund managers who have to invest megabucks in anything they come up with to have it matter.

Tomorrow I will write about our general small-cap bias which entails similar detail work.

 

More today for paid subscribers from Britain, Ireland, Brazil, Israel, Japan, Russia, Canada, Denmark, China, and Mexico.

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First Two Days of Christmas; Charity Day II

Wed, 2014/12/03 - 2:39pm | Your editor

 

Today we begin our new series, the Twelve Lessons for Christmas. We will be offering ten more lessons in the runup to Christmas. Today we look at central banks outside the USA. First up is “Earningsscout” Nick Raich of www.earningsscout.com:
The rally in Japanese and Chinese stocks continued overnight with the Nikkei and Shanghai composite rising another +0.32% and +0.58%, respectively. These stock benchmarks are now up 27% (Japan) and 40% (China) off their 2014 lows.

With both countries' central banks recently stepping on the accelerator at providing more accommodation, who says policymakers can’t stimulate risk assets? The not-so-new [lesson] learned here is that you want to go long the asset classes policy-makers wish to prop up (stocks, bonds to lower interest rates, etc.) and short asset classes that could deter their plans such as rising commodity prices.”

Or in other words, don't fight the Fed. Or other CBs.

Lesson No. 2 is from an advertiser's research director at www.bullionvault.com. Adria Ash writes to launch a new Russian-language facility to buy gold for rubles. Make that rubles outside Russia:

Few nations had as miserable a 20th century as Russia. The centuries before weren't much fun either. And what Western historians glibly called 'the end of history' 20 years ago, leading to the 'Great Moderation' cheered by Western central bankers (CBs), pretty much passed Russia by, as well.

You can measure the financial misery in gold prices. Starting with the Russian currency collapse of the early 1990s, the price of gold, (money of last resort) pushed higher during the late-1990s' debt default, moved in lockstep with global prices as Russia enjoyed a new oil-price boom, and then kept rising steeply as that oil-fed boom crashed.

Interest-rate hikes have failed to stem this latest currency crash. (They rarely do as in the UK in 1992.)

So word today [is that] the Russian CB is out in the foreign exchange (FX) market, buying Rubles to try and boost their dollar value. That means shrinking its foreign reserves, selling the [the] dollars, Euros and other currencies it hoarded during the oil boom.

Long-time Gold Standard advocates may (recall) that, back in 1989, when Russia's dying Communist empire suffered (its) only the first post-Soviet currency crisis, using gold to try and stabilize the Ruble was a serious proposal but rejected.

Officially, Russia now holds some 1,168 [metric] tonnes of gold, the world's fifth largest national hoard. That is around 10% of its foreign currency reservesm reserves which are shrinking.

So which is it? A new gold-backed Ruble, or gold sold to defend the existing money?

The CB itself has said gold is up for sale if Russia needs to sell to pay for imports. But President Putin has used Russia's growing gold reserves to burnish his 'strong man' image. Lots of Western bloggers would have you believe he's planning the death of the dollar by preparing a gold-backed currency instead.

EU and US sanctions over the Ukraine crisis, however, currently block many Russian exporters from earning foreign currency. Indeed, the Kremlin's 2014 gold buying looks to have been driven by the needs of gold miners, unable to sell on the international market, rather than 'war chest' hoarding. One leading Moscow insider says the CB bank's current FX reserves will cover barely 6 months of the imports bill from here. If so, then selling all its gold holdings would extend that by just 2.5 weeks.

Either way, it's crunch time again for the Ruble. Private citizens wanting to defend some of their savings might not want to wait on the Kremlin's next move. Like you, they can build their own private gold reserves instead outside Russia in Swiss or Singapore vaults as they choose at very low cost using BullionVault's new Russian language site.

That's only if, of course, they're able to get their money out of the country. Waiting until sanctions or exchange controls are imposed never proves smart if you want to own physical property, ready for instant sale, away from the trouble inside your borders.”

NB: Of course you can also use www.bullionvault.com to buy gold in other languages and domiciled in other centers like Britain or the USA and price in euros, sterling, or US dollars. Accounts are nominative and your identity and the bank sending the money to the UK gold trading site have to be verifiable. But they are secure. The other advantage of Bullion Vault is that its fees for holding and trading physical gold are much lower than what banks and insurance companies normally charge. Your editor was in Russia during the 1993 Parliamentary Occupation and you could buy anything you wanted for a nice crisp clean dollar bill.

Russia faces a hard winter. In Nov., Siberia suffered the highest snowfall accumulation since 1976. This also can bring icy winds westward. You cannot predict the weather but it is unlikely to be mild.

Thanks to a reader in Asia for pointing out that there is another potential heir to the Thai throne, sister of the Crown Prince. The law was changed to allow her to rule. But as long as there is a prince, the odds are against Bajra Kitiyabha Manidol who works as a diplomat and has no gambling debts or illegitimate sons.

 

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Today is Giving Day II, and to make a difference in Ebola-afflicted West Africa, donate to Partners In Health, www.PIH.org. PIH was first off the boat with medics and supplies in Sierra Leone before the world took the epidemic seriously and is still working hard on the ground. This week 's donations will be doubled by a major donor. If you have a company which can match your contribution, contact development@pih.org for set up. My little business is too poor to finance charity and we spend our money on reporters, webmastery, copywriting, and marketing.

More for paid subscribers from Portugal, Israel, Mexico, Ireland, Colombia, The Netherlands, Brazil, Germany, and Britain.

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Siamese Hilary Mantel Novel

Tue, 2014/12/02 - 1:45pm | Your editor

The military junta ruling Thailand, formerly Siam, is handling the vexed royal succession with Wolf Hall methods Thomas Cromwell used in Dame Hilary Mantel's novels. There is nothing particularly exotic about what amounts to a replay of the fall of the Boleyns (in her Bring Up the Bodies):

We are Siamese if you please.

We are Siamese if you don't please.

(The King and I).

Like Anne Boleyn's trial for treason, the downfall of Crown Princess Srirasmi, third wife of Thai Crown Prince Vajiralongkorn, has been messy, and very dramatic and public. A divorce is likely after seven police relatives of the princess have been arrested and accused of graft, abuses, and lèse majesté.This last is a serious jailing offense in Thailand where the ailing king is viewed as a god, and any insult to his reign is treasonous. The Srirasmi cousins and aunts were granted royal status and a special name, something like a knighthood in Britian, Akragpongpreecha, when she married Prince Raji in 2001. But now they are said to have abused their rank.

The real problem is the links between Prince Vaji and Thaksin and Yingluck Shinawatra, two elected prime ministers deposed by the military in 2006 and last year. The coups were ostensibly in support of ailing current King Bhumipol, 86, the longest reigning monarch in the world. Thaksin, a millionaire, paid off Prince Vaji's huge gambling debts and may have had an inside track at one point, perhaps via the princess. But his ambitions were blocked by the army and by Queen Sirikit, the only known wife of King Bhumipol.

The King ascended to the throne in 1946 after the death by shooting of his elder brother. Both were the offspring of a Thai Chinese orphan, a US-educated nurse, and the 69th child of the prior King, who had studied medicine at Harvard. After a brief return to Thailand where the doctor died of liver disease, the three children, Princes Ananda and Bhumipol, their sister, and their nurse-mother moved to Lausanne, Switzerland. In 1935 the then-king, who had had his powers reduced by the new constitution, abdicated in disgust and the eldest brother, Ananda, aged 9, became King Rama VIII, but continued to live in Switzerland until 1946.

In 1950 Rama VIII was killed in his bed by a gun. We don't know who did the shooting. It may have been suicide, accident, or murder by his mother or his brother. The police investigation was hampered by rules not allowing the cops to investigate the site or autopsy the body.

The current Crown Princess is likely to be divorced so the heir to the throne can marry his mistress who has just borne him a son and possible heir. He is the youngest son of Prince Vaji whose second wife produced three sons who were disowned and exiled to the USA when he wed Srirasmi. She has produced one son who is now about 10 who is likely to be disowned as well if his momma is ousted.

Since Henry the Eighth, the British have done these things so much more smoothly. But the fall of Lady Diana Spencer reminds us that royal succession is often fraught.

To protect our readers in Thailand this note is not being sent to them lest they be jailed also for lèse majesté.

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More for paid subscribers follows from Singapore, Israel, Mexico, Ireland, Brazil, Japan, Canada, Portugal, and a few other places, including a stock buy.

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Trading Alert

Mon, 2014/12/01 - 2:07pm | Your editor

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The Hog Cycle and Cyberweek

Mon, 2014/12/01 - 1:31pm | Your editor

We begin a new week, Cyber Week; a new month; and a busy trading day as outlined for the paid contingent over the holiday weekend. The referendum results were good for Swiss internationalism, as measures to half immigration were voted down; and even better for sensible Swiss monetary policy, because the attempt to force the central bank to buy and hold gold was defeated. Oddly enough, after initially falling ~2% in Asian trading, the yellow metal actually is up today.

Our SPDR Gold, GLD, rose 2.7% at the opening, the exact reverse of what the Swiss referendum result was supposed to produce. It may be that the easing of Indian gold import restrictions was the cause. As promised by PM Narendra Modi, India ended the rule requiring importers of gold to earmark 20% of the gold sold to jewellers for re-export from India. India accounts for a quarter of world jewelry demand for gold, barely ahead of China.

 

The cure for high prices is high prices. The cure for low prices is low prices. That is the message from the hog cycle. When porkers are cheap fewer piglets are raised and a few years later the price of pigmeat rebounds. When pork is pricey too many piglets are raised and the market price falls.

The same thing historically applies to oil, and also gold. Back in the last years of the 1990s, oil fell to $10/ barrel. The low price boosted demand and car-buyers reverted to their taste for gas-guzzlers and brought their clunkers out of the garage. The current crash will probably not result in these old cars leaving the dealer lots. Now they are near the end of their lives (except in Cuba and Panama where old US cars go to die.)

Lower oil prices will turn off some ventures: the deepest sub-salt, the least economic shale fields, and the most filthy Saskatchewan oilsands producers. Winners and losers cannot be determined without carefully examining their breakeven prices/bbl, so don't sell across the board.

But after a few years to adjust, the output from these uneconomic oilfields will not hit the market. And then a few years on the price of oil will rise again because of shortages. In the interval we have some ideas on how to play this.

 

Another anomoly is that Germany has now slipped into contraction, following the other major Euroland economies, France and Italy. That is actually good news from bad. Berlin's hardline anti-deficit hawks will have to react to Deutschland no longer being ueber Alles: that heralds less flak for the likely European Central Bank launch of a Euro own quantitative easing program, following on those of Japan and China.

Goldman Sachs says 2015 will be the year of Asia as the brokerage expects Asia-Pacific ex-Japan to return 11%. Japan will only pay out 8%, it figures. Meanwhile the US S&P is expected to fall more than the Europe Stoxx index mainly because the Fed is expected to hike rates.

 

The likely impact of all this money creation is bad for US companies, as profit growth will slow, one reason Wall Street is in a non-holiday mood today. American stock prices have gotten ahead of themselves. But a policy switch heralds a better outlook in Euroland. That is our message for 2015 in a nutshell. I am not sure that the Japanese and Euroland central banks will produce a “Santa Claus rally” for European and Japanese equities, but I do expect better stock performance next year.

 

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More from Portugal, Britain, Luxembourg, Colombia, Brazil, Panama, Hong Kong, France, The Netherlands, Australia, Israel, and Norway.

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Portfolios Updated

Sun, 2014/11/30 - 1:44pm | Your editor

As I usually do on Sunday, I have updated our Model Portfolios at our website, www.global-investing.com

Visit the site to see the portfolios you are allowed to view: all three for paid subscribers, and the closed positions on for those who have not yet joined up. To more easily view spreadsheets, use the printer-friendly button to fit them on your screen, even if you don't want to print them.

More for paid subscribers follows: Read more »

Black Friday Bargains

Fri, 2014/11/28 - 11:54am | Your editor

The biggest Black Friday bargain is crude oil, its by-products, and alternative fuels priced to crude. Yesterday OPEC failed to agree to cut its output to support the oil price. The price of crude is off nearly 6% to under $70 per barrel.

This will support even more spending in the runup to Christmas starting today, and just just from US doorbuster sales. It will also help consumers in other countries get cheaper goods delivered by road, spend less on heating their homes, and less on filling their gas tanks.

 

I am not going shopping. I am going to Ellis Island with 3 of my grandchildren and their parents. My ancestors (in the period 1937-1945) all came to the USA on ocean liners landing on the West Side of Manhattan, some first class from Hamburg, some second class from Le Havre, some from Cuba or Portugal. Nobody arrived in steerage at Ellis Island. The same is not true of our other relatives who left Europe earlier in the 20th century. It is worth remembering this as the national debate over the While House reform of immigration rules becomes heated. Few of the Republican Party critics of Obama's initiative are of Native American (Indian or Eskimo) heritage.

 

Here is a question of interest to one of our contributors and me: would you be interested in a monthly column suggesting covered calls to write on American Depositary Receipts. These have proven very profitable to our contributor, mostly on US stocks (which have the most liquid options.)

I am trying to get him to branch out into ADRs which are not followed much, because the options used in European markts work differently and are harder to track. Please reply on our website to me.

Our reporter plans to write a single article on this subject to start us off and I am not sure we want to join this run.

 

More news including a quarterly report for paid subscribers follows from Britain, Switzerland, Hong Kong, Israel, Canada, Sweden, Mexico, and Mongolia.

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Advertiser Upheavals

Wed, 2014/11/26 - 3:01pm | Your editor

We have ended our distribution of the full daily blog to the website, www.talkmarkets.com, after they posted it without the promised contractual delay or embargo last week. This allowed access to our blog identical to what was provided to paid subscribers to be made available those visiting the talkmarkets site. So our paid subscribers might not have been able to trade before talkmarkets users did.

Moreover, rather than using their ad space on our website to promote other newsletters from www.talkmarkets.com, they promoted www.global-investing.com itself on our site allegedly using “the wrong widget” which failed to exclude our own headlines from our site.

This means that continuing to allow them to allegedly promote our work amounted to a license to pirate it in violation of copyright law to our own pre-subscribers, our target for future signups. We cannot continue in business were this to continue.

If this notice is not posted on www.talkmarkets.com today, we will sue for violation of copyright and false advertising.

 

Another advertiser on our site, www.bullionvault.com, ran into data problems last night during the “dead zone”, when US and Canadian gold-trading has ended but before Asian trading has opened. During that time, one of its price data sources fed incorrect gold prices to many sites. Here is what Adrian Ash, head of research at bullionvault, reported:
“Gold briefly showed above $1400 per oz instead of $1200. 'If only!', you might say.

“On bullionvault, this error affect the gold chart, an error the IT team have now corrected. More importantly, the bad data also affect prices quoted on the order board. That resulted in a few deals being struck far above the actual spot prices.

“This error is also being corrected. The small number of customers involved have been informed. If you have not heard from us separately, then you were not affected.

“To unwind the system error, all gold deals executed during last night's brief but significant anomaly are bein reversed. Commissions paid on those trades are being refunded.

“This is a reasonable and necessary adjustment to ensure the markeplace operates fairly to all participants. We are reviewing our datasources in full.

“Because no one can guarantee absolute accuracy at all times, a 'fail safe' policy must also be ready for correcting any erroneous trades resulting from bad data, [a] policy bullionvault is applying today.”

 

Vivian adds: Because of the pending Swiss referendum on Sunday which would call for its CB, the Swiss National Bank, to hold 15% of its reserves in gold, and to never sell any of it, there is some upheaval in the yellow metal market. My view is that the very high dollar is not long for this world, which may make gold look cheaper when it is priced in RMB or rupees, even if it then becomes more expensive in greenbacks.

In anticipation, Asians are buying right now more gold than the world is producing. At some point this will feed into the gold market here, in Britain, and in other areas. I like to keep some of my assets in precious metals, via www.bullionvault.com for physical gold, and via a US ETF for paper gold.

 

There will be no blog tomorrow for Thanksgiving. News from Israel, Argentina, Canada, Brazil, Spain, Mexico, and Britain, plus a new share recommendation for some of you to follow.

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Advertiser Upheavals

Wed, 2014/11/26 - 3:00pm | Your editor

We have ended our distribution of the full daily blog to the website, www.talkmarkets.com, after they posted it without the promised contractual delay or embargo last week. This allowed access to our blog identical to what was provided to paid subscribers to be made available those visiting the talkmarkets site. So our paid subscribers might not have been able to trade before talkmarkets users did.

Moreover, rather than using their ad space on our website to promote other newsletters from www.talkmarkets.com, they promoted www.global-investing.com itself on our site allegedly using “the wrong widget” which failed to exclude our own headlines from our site.

This means that continuing to allow them to allegedly promote our work amounted to a license to pirate it in violation of copyright law to our own pre-subscribers, our target for future signups. We cannot continue in business were this to continue.

If this notice is not posted on www.talkmarkets.com today, we will sue for violation of copyright and false advertising.

 

Another advertiser on our site, www.bullionvault.com, ran into data problems last night during the “dead zone”, when US and Canadian gold-trading has ended but before Asian trading has opened. During that time, one of its price data sources fed incorrect gold prices to many sites. Here is what Adrian Ash, head of research at bullionvault, reported:
“Gold briefly showed above $1400 per oz instead of $1200. 'If only!', you might say.

“On bullionvault, this error affect the gold chart, an error the IT team have now corrected. More importantly, the bad data also affect prices quoted on the order board. That resulted in a few deals being struck far above the actual spot prices.

“This error is also being corrected. The small number of customers involved have been informed. If you have not heard from us separately, then you were not affected.

“To unwind the system error, all gold deals executed during last night's brief but significant anomaly are bein reversed. Commissions paid on those trades are being refunded.

“This is a reasonable and necessary adjustment to ensure the markeplace operates fairly to all participants. We are reviewing our datasources in full.

“Because no one can guarantee absolute accuracy at all times, a 'fail safe' policy must also be ready for correcting any erroneous trades resulting from bad data, [a] policy bullionvault is applying today.”

 

Vivian adds: Because of the pending Swiss referendum on Sunday which would call for its CB, the Swiss National Bank, to hold 15% of its reserves in gold, and to never sell any of it, there is some upheaval in the yellow metal market. My view is that the very high dollar is not long for this world, which may make gold look cheaper when it is priced in RMB or rupees, even if it then becomes more expensive in greenbacks.

In anticipation, Asians are buying right now more gold than the world is producing. At some point this will feed into the gold market here, in Britain, and in other areas. I like to keep some of my assets in precious metals, via www.bullionvault.com for physical gold, and via a US ETF for paper gold.

 

There will be no blog tomorrow for Thanksgiving. News from Israel, Argentina, Canada, Brazil, Spain, Mexico, and Britain, plus a new share recommendation for some of you to follow.

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BRICS and Beyond

Tue, 2014/11/25 - 1:56pm | Your editor

Today's issue, we promised, would focus on Asia, in fact on India. Being a married to a grandchild of the British raj in India, I cannot resist going all

A la Modi

Nomura Hong Kong generously provided us with its customer buy list we are getting our local writers to look at the Nomura ideas, starting with India today. The main takeaway from the Nomura report is:

“Region-wide Asia-Pacific nominal GDP on an equity market cap-weighted basis, our economists’ individual-country forecasts aggregate to 7.1% growth in 2015 (i.e. 4.3% real growth and 2.8% inflation), a decent pick-up from this year’s market cap-weighted 6.9% nominal growth (4.2% real growth and 2.7% inflation) – with stronger nominal growth in (more export-oriented) Korea, Taiwan and Singapore (in all three of which we recommend Overweight equity allocations) plus Thailand (where we are Neutral), which is recovering from very subdued 2014 growth.”

 

My favorite pick is not an ADR stock, Matahari Dept Stores in Indonesia. That's where I want to shop.

 

Today our band of writers contributed lots of news from around the world not confined to a continent.

Before they get going, here is Adrian Ash on sentiment over gold. India is rumored to be about to set new restrictions on gold imports but that is not his subject:

“With gold and silver prices now down 40% and 70% from their 2011 peaks, it isn't just professional bank analysts turning sour on precious metals. The froth really is being blown off the bubble in 'gold bug' opinion too.
“Sure, there are pockets of pro-gold sentiment. This weekend's Swiss gold referendum, for example, has come about thanks to 100,000 people signing a petition as part of Switzerland's direct democracy system.
“But that equals less than 2% of registered voters. Opinion polls put the 'no' camp well ahead for Sunday's vote.

“On the bulletin boards, meantime, just check the comments section underneath a Daily Telegraph story this month. Eight of the 16 people commenting are bearish. Eight. Out of sixteen. For a gold-friendly news-site...with a hardcore gold-friendly following...that is a big turnaround.
“On that same page, what's more, a readers' poll is also split right down the middle, with 45% saying the gold drop is a 'buying opportunity' and another 45% saying it isn't.
“The last ten per cent? They're the most honest. Because they say they would never buy gold either way.
“That in truth applies to the vast majority of the developed Western world's savers. Gold and silver are a minority investment.” (Adrian writes a daily column for www.bullionvault.com, our advertiser.)

More for paid subscribers from India, Canada, Brazil, Britain, Spain, Ireland, China, and Hong Kong, along with a new recommendation.

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