Asianomics #8/2009: Green Planet - State of the world 3 December 2009 In our 2009 end-year Asianomics report, Green Planet - The state of the world, we outline the fragile growth dynamics that are haunting central banks and governments as they try to convince markets and companies that the worst is over. We look at whether the world faces inflation or deflation and conclude that it faces both, depending on where you live.    This report has been commissioned by Asianomics Limited for distribution to members. Asianomics #7/2009: China's Press - True to type 30 October 2009 When we established Asianomics Limited in late 2007 we promised ourselves that a feature of the company would be to write about topics and countries that no-one else was interested in - either because they seemed unimportant to the market at that moment or because they were politically too hard for stockbrokers or the media. Earlier this year we published an economic/political commentary on Cambodia (Asianomics No 1, Cambodia - The wild east) and now we address the issue of the media in China. Our guest writer on this topic is Michael Charnock. Michael's report, China's Press - True to type (Asianomics No. 7/2009), is hard-hitting, direct and honest. We are sure that you will find it a fascinating read and an extraordinary insight into what is quickly becoming the fastest growing printed media industry in the world - albeit a government directed one (kind of like China's listed banks....). Asianomics #6/2009: India - Embracing the Elephant 14 September 2009 During our trip to Mumbai, Delhi and Kolkata in late August the biggest worry for the next twelve months was the effect of a deficient monsoon on rural incomes and, therefore, domestic demand. The good news is that, in the weeks since our visit, the degree of deficiency for this year’s summer monsoon has dropped from 24% to 20% (at its peak it was running at 29%). The rains during August and September promise to make the Rabi (winter) crop a relatively good one and therefore will help alleviate the damage from the badly affected summer (Kharif) crop. India’s GDP should be reduced by no more than 0.5-1% over the next year. Good news. But the market’s and analysts’ concern for such short term growth hindrances does India a disservice. As we try to show in Asianomics No. 6/2009, India – Embracing the Elephant, it is long term trends that should make the Indian equity market a structural overweight in any portfolio that purports to capture Asian growth potential.    This report has been commissioned by Asianomics Limited for distribution to members. Asianomics #5/2009: Shipping - Bleak Times 28 July 2009 We had asked our old friend (and fellow long-suffering racehorse owner) Tony Foster, MD of Marine Capital in London, to put together Asianomics No 5/2009, Shipping - Bleak Times, a follow-up report to his shipping brief from February last year. At that time the shipping industry was in raptures about prospects for global trade, decoupling and ever bigger returns. Today, it is in the worst doldrums in the shipping sector's history. The decoupling didn't happen (equity market performance is not real decoupling), global trade volumes have crashed and there are just too many newbuilds reaching the market this year, next year and 2011.   This report has been commissioned by Asianomics Limited for distribution to members. Asianomics #4/2009: India Votes - The Stage Is Set 28 April 2009 We asked our ex-CLSA colleague Anupam Gupta, of Mumbai-based Aavan Investment Research, to look at the key states, principal figures and policy differences in the Indian election. His findings are contained in the attached report - Asianomics No 4/2009,  India Votes - The Stage is Set. In his view the likely outcome of the election is for more of what we have had for the last four years - a weak coalition government at the centre beholden to a few left-leaning regional parties. In our view, that will be a negative for India as we enter a crucial period in global economic growth.      This report has been commissioned by Asianomics Limited for distribution to members. Asianomics #3/2009: Debt - The Great Excess 28 April 2009 In Asianomics No 3/2009, Debt – The Great Excess, we examine what is wrong with the Keynesian Consensus solution, how debt dynamics will work to ensure that either governments stop their profligacy soon or debt levels will become explosive and why the global economy needs deflation now more than ever before.        This report has been commissioned by Asianomics Limited for distribution to members. Asianomics #2/2009: GDP - Damaged goods 17 March 2009 The overwhelming consensus in economic and bureaucratic circles is that governments and central banks must do everything in their power to arrest the decline in economic activity and to unfreeze the banking system. That is what stimulus programmes, zero interest rate monetary policies and quantitative easing are all about. But will they actually help? Asianomics No. 2/2009, GDP – Damaged goods is a departure from our normal work. We have asked Heinz Blasnik, an Austrian economist who actually hails from Austria, to explain the Austrian School views on the current crisis and policy responses in detail.        This report has been commissioned by Asianomics Limited for distribution to members. Asianomics #1/2009: Cambodia - The Wild East 19 February 2009 It is not often the case that Cambodia makes the international news headlines and when it does it tends to be for the wrong reasons. Last week it was the beginning of war crimes trials that reminded us of its existence and the troubled recent history of the country. A little further digging would have found recent stories about the meteoric rise of Prime Minister Hun Sen’s son, Hun Manet, to the rank of Brigadier General in the military police. Dynasties and nepotism die hard in south-east Asia. We take the opportunity of this flurry of publicity to start the week with Asianomics No. 1/2009, Cambodia – The Wild East.       This report has been commissioned by Asianomics Limited for distribution to members. Available to members only. 28 January 2010 ExposAsia No 3/2010:  Small is Suffering  In ExposAsia, Small is Suffering, we take a look at the National Federation of Independent Business' Small Business Index. It makes for grim reading. 21 January 2010 ExposAsia No 2/2010:  Cred Flags In Asia, the two countries where red flags are raised on the credit cycle are China and Australia. Our measure is at or above the two standard deviation mark in terms of credit growth relative to GDP - in all countries in the past this has been the precursor to a slump or banking sector crisis. Full details are contained in ExposAsia No 2/2010, Cred Flags.   13 January 2010 ExposAsia No 1/2010:  Thailand in Flux Following our country visit to Thailand last week, and the two Insight notes that were sent out at that time, our newly published ExposAsia No 1/2010, Thailand in Flux, examines in more detail the economic backdrop to the Thai market as it enters 2010. We find that monetary conditions have been supportive of only modest growth going forward and that concerns over inflation are not justified. We expect interest rates to remain on hold throughout the year. 15 December 2009 ExposAsia No 8/2009:  Copper Simon Hunt, founder of Simon Hunt Strategic Services, has over five decades experience in the mining and metals industries. He blends economic commentary with insights from metals industry contacts and technical pricing analysis to arrive at his forecasts of copper demand and copper prices. Simon's conclusions on copper prices coincide with ours: world industrial production will slow in 2010 from current levels as stimulus programmes are not redoubled in degree. Removal of quantitative easing will make it much more difficult for the financial sector to speculate in 2010 than it has been in 2009. Read about Simon's analysis in ExposAsia No 8/2009, Copper - Part of the money game. 23 July 2009 ExposAsia No 7/2009:  Hobgoblin? In ExposAsia No 7, Hobgoblin?, we re-examine our stand on the US economy and its prospects for 2010. We also look at the hard evidence in Asia of economic recovery. We find the bull case wanting on both counts. Maybe the real hobgoblins exist in the minds of market players that think this is a normal economic downturn? 30 June 2009 ExposAsia No 6/2009:  Free Liquidity In ExposAsia No 6, Free Liquidity, we examine the prospects for a continuation of easy money flows over the next few months. 19 June 2009 ExposAsia No 5/2009:  A Little More Knowledge ExposAsia No. 5/2009, A Little More Knowledge, concentrates on the views of our China, India and Japan experts interspersed with our own commentary. In short, watch out for policy measures in China to rein in 'over liquidity', don't expect too much in the way of reform measures from the new Indian government and rethink your equity strategies with respect to Japan. 3 June 2009 ExposAsia No 4/2009:  The Hardest Thing ExposAsia No. 4, The Hardest Thing, sets out to explain why the current rally is just a liquidity head fake that would die a death if there were any real substance to the 'green shoots' theory. In fact, the action in US interest rates and by governments across the world now make us much less optimistic about the economic outlook for 2010. Far from joining the consensus which believes that recovery is on the way in 2H09 we now expect the 2010 recovery to be delayed - there is just too much of a hole for the private sector to fill next year. 14 April 2009 ExposAsia No 3/2009:  The Great Mistake Cubed Despite being on holiday we just couldn't let the latest monetary data from China pass without comment. Read ExposAsia No 3, The Great Mistake Cubed. When it comes to China the collective investment and analytical community appears to be able to undertake the most willing suspension of disbelief. Even as Beijing embarks on policies that make Alan Greenspan look smart the world happily believes that the laws of economics apply to everyone except China. Unfortunately, that just isn’t so. The policies being undertaken by China at the moment are, in our book, among the worst responses to the global economic crisis that we have yet seen. 16 February 2009 ExposAsia No 2/2009:  The Great Mistake ExposAsia No 2/2009 (The Great Mistake) is on Chinese monetary data; it argues that Beijing’s response to the economic slowdown is a misunderstanding of the nature of the problem in the Chinese economy. Strong-arming the local banking system into lending as the recession gathers pace will be counterproductive.  5 January 2009 ExposAsia No 1/2009:  Rien Ne Va Plus Equity markets have started 2009 in buoyant mood. The rationale seems to be that the worst is over and, even if it isn't, the bad news is now in the price. But this approach fails to take account of the gigantic change in household behaviour and monetary conditions that are ongoing in the global economy. The bad news is that the world is now a changed place and the old investing metrics no longer apply. In ExposAsia No 1/2009 (Rien Ne Va Plus) we take a closer look at the bets being placed on Asian equity markets at the moment and conclude that they belong to the era of excess capital and above trend growth. Available to members only.