EM: Another "concept" bites the dust..

 

The annual report sponsored by CS is out from London Business schools Dimson, Marsh and Staunton:

 

FT: Buttonwood – The Growth Paradox: http://www.economist.com/node/21596533/print

 

Although the conclusions are "easy"… the correlations is remarkable!

 

The argument for buying EM due to higher growth is invalidated, not only that, it's actually inverse correlated to its performance, while population growth, the good demographics explains 50% of most increases in aggregate demand.

 

The case for owning EM is getting harder and harder to find considering that FX remains 75-85% of the total return, and that most EM countries right now, this minute, is trying to weaken their own currencies.

 

The bigger conclusion, and I am an EM long term, bull, is that you can run from reforms, but you cant hide – ultimately even EM needs to slow down and get the household economics in order – I only wish it would also happen to the DM !!!!!

 

Growth and markets: A puzzling discrepancy

 

Furthermore, for those who can access BBC tonight this one seems interesting: How China fooled the world with Robert Preston & BBC Webside:  Will China shake the world again

 

 

Med venlig hilsen  |  Best regards
Steen Jakobsen  |  Chief Investment Officer

 

Saxo Bank A/S  |  Philip Heymans Allé 15  |  DK-2900 Hellerup
Phone: +45 39 77 40 00  |  Direct: +45 39 77 62 23  |  Mobile: +45 51 54 50 00

 

Research: http://www.tradingfloor.com/traders/steen-jakobsen

Please visit our website at www.saxobank.com

 

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