Posts by "putko mafani"

Fed passes China in Treasury holdings
By Michael Mackenzie in New York
Published: February 2 2011 00:01 | Last updated: February 2 2011 00:01
http://bit.ly/eo4W1X

OK, 1310 is within 10 pts from my 1320. More or less aligned.

Reason why I expect this is because such multi days up trends usually end with a huge spike which cleanses all die-hard bears. Let's see. I expect this to happen within 5-6 trading days.

GBP induced selling in EURUSD and EURCHF

Is it prudent to be risk-averse?

Super-Cycle Leaves No Economy Behind as Davos Shifts to Growth From Crisis

By Simon Kennedy - Jan 23, 2011 For only the third time since the Industrial Revolution, the world may be entering a long-term growth cycle that will lift all economies simultaneously, driving bond yields and commodity prices higher.

The depth and scope of the expansion will be a focus for discussion at this weeks annual meeting of the World Economic Forum in Davos, Switzerland. Evidence of a broadening global recovery will enable U.S. Treasury Secretary Timothy F. Geithner, investor George Soros and 2,500 political, business and academic leaders to shift their emphasis away from crisis- fighting.

With the economic and investment outlooks much better than in recent years, people are talking about how to get back to business as normal and what comes next, said Jitesh Gadhia, a delegate to the conference and the London-based senior managing director at Blackstone Group LP, which runs the worlds largest buyout fund.

Goldman Sachs Group Inc., PricewaterhouseCoopers LLP and Londons Standard Chartered Bank are among the financial companies sending executives to the meeting. Their economists predict a growth spurt in coming decades led by emerging nations that will be strong enough to boost developed countries.

Global gross domestic product will swell to $143 trillion by 2030, allowing for inflation and market-exchange rates, from $62 trillion in 2010, with China and other emerging markets accounting for about two thirds of the rise, estimates Gerard Lyons, chief economist and group head of global research in London for Standard Chartered, which generates most of its earnings from Asia.

Investment, Urbanization

Lyons and his colleagues predict a super-cycle of historically high growth that will last at least a generation and will be led by booming trade, investment and urbanization, according to a report published in November. He reckons such a cycle has occurred only twice since the end of the 18th century: the four decades before World War I and the three following World War II. Hes betting the new phase will contribute to a reversal in the three-decade decline for U.S. bond yields after 10-year Treasury notes lost an average 40 basis points a year since the early 1980s.

Richard Dobbs, a director of the research division at New York-based McKinsey & Co., will use the Davos meeting to highlight a study by the international consulting firm that sees an imminent end to cheap capital. The causes are a building bonanza in developing economies and aging populations who are draining their savings, according to the report, which was released Dec. 9.

Signs of Momentum

The 10-year U.S. Treasury note yielded 3.41 percent in New York on Jan. 21, according to BGCantor Market Data, compared with 15.8 percent in 1981 and a record low of 2.04 percent in December 2008. Signs of momentum in the U.S. economy have helped increase the yield from about 2.9 percent at the start of December.

Its a topic capturing the attention of people who want to think beyond the crisis, said Seoul-based Dobbs.

While Goldman Sachs Asset Management Chairman Jim ONeill has found fame for promoting the BRIC economies of Brazil, Russia, India and China, he says their rise has positive impact beyond their borders, with Chinese imports totaling about $400 billion, almost the equivalent of South Africas economy last year. That should attract investors to rich-nation companies with links to these markets, and the resurgence in the U.S. economy has prompted ONeill to predict higher U.S. bond yields in 2011. He didnt provide a specific forecast.

Out of Date

World-trend economic growth is being lifted, said London-based ONeill, who helps manage $840 billion. The notion that BRICs benefit at the expense of others is increasingly out of date.

Investors should buy copper, coal and oil to take advantage of the growth of cities in emerging markets, according to Standard Chartered, which says the Chinese yuan, Indian rupee and Korean won will appreciate on strengthening domestic growth.

Developed nations also will benefit as their emerging- market counterparts invest more abroad, hire more of their workers and rely on their expertise in areas such as financial services, said Lyons, who will be at Davos. He predicts both the U.S. and European Union will enjoy an average trend growth of 2.5 percent through 2030, compared with the 1.9 percent and 1.7 percent he forecasts for this year.

Its a win-win situation, said Lyons, who concedes growth wont always be strong and continuous during the entire period.

Increasing Integration

The increasing integration of China and other developing economies will boost commerce and investment worldwide, agrees Edward Prescott, a senior monetary adviser to