Chinese Metals Boosted by Stimulus

Tony Daltorio, The Investment U Research Team

At least one government stimulus package seems to be working right now. But, it’s not the United States. If only our stimulus program was as successful as the “cash for clunkers.” Unfortunately, we’re closer to clunker with the rest of economic stimulus.

The stimulus package we’re talking about is in the country that many pundits love to hate – China. So far this year, China’s economy has accounted for virtually all of the world’s economic growth. Including China, global growth is 1.6 percent. Without it, growth was flat to slightly down.

Here are just a couple examples of China’s successful stimulus:

China’s auto market is now growing at 50% per year and has surpassed the United States as the world’s ...

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by Edward Hugh: Barcelona"The Kazakh government is ready to step in,'' Kazakhstan's Prime Minister Karim Masimov said this morning in a telephone interview with Bloomberg "The Kazakh banking system with the support of the government and central bank will fulfill all obligations to international investors.....We have our own specific plan to survive without any external support....I don't think we need support from the International Monetary Fund or overseas.'' Well that is good news, so at least we know that one of the CIS and CEE economies won't be looking to the IMF for bail-out support in this crisis which is presently growing by the day. So Kazakstan, that country which is reputedly host to reserves of approximately 95% of the elements in the periodic table, with a population of around 15 million housed on a surface area greater than the whole of Western Europe, is going to be able to look after itself. But hang on a minute, just where is Kazakhstan, and just what have they been getting up to over there, and why the hell should I take Karim Masimov's word for it, when just about all the other Iceland Look-alike show contestants seem to be saying the same? After all, didn't those extermely bright and able young people over at RBC Capital Markets in Toronto say in a report only last week that, along with Latvia, the country's $100 billion oil-led economy is among the most vulnerable to the present global credit crisis and the skid-row economic trajectories that go with it simply because of its excessive reliance on short-term foreign borrowing. And isn't it the case that the cost of protecting Kazakhstan government debt against default has more than doubled this month - to over 1,000 basis points (or 10%), the level for borrowers that investors term ``distressed,'' according to CMA Datavision credit-default swap prices. Only Ukraine, which as we know is already seeking IMF support, is classified as being a bigger risk among European emerging-market governments. Surely all those highly dedicated, bright, and extremely able young people who are doing all that trading know what they are about, don't they?

During the years 2000-2007 the Kazakhstan economy enjoyed an extended period of very rapid growth, with real GDP growth averaging 10 percent annually. The expansion was underpinned by the development of the oil sector, prudent macroeconomic policies, structural reforms, and increased access to global financial markets. As a result, real per capita incomes have doubled since 2000 and social indicators have generally improved. • The global financial turmoil that began last summer had a significant impact on the Kazakhstan economy. Market perceptions of risk on Kazakhstan's assets rose sharply last September and remain relatively elevated. • Economic growth is expected to drop back significantly in the wake of the financial shock, but is still likely to sustain significant growth. The IMF are forecasting GDP growth of 5 percent in 2008 and a modest recovery to 6.25 percent in 2009. • Consumer ...

The iShares MSCI France Index Fund (EWQ) is an ETF that is based on the MSCI France Index. The index currently is comprised of seventy-six securities with top sectors being financials, consumer discretionary, energy, industrials, and materials.

The France ETF (EWQ) is the ETF “pick of the week” from Carl Delfield, editor of the Chartwell ETF Global Advisor newsletter. Mr. Delfield highlighted several reasons for his choice of the France ETF. The main reason he highlighted is the current government of French President Nicholas Sarkozy. Sarkozy’s government has begun to implement major changes to the French economy. Some of the changes include: slashing of red tape, raising of the retirement age, privatization of some public sectors, and a possible end to the 35-hour work week.

Mr. Delfield believes that these recent policy changes signal that France is moving in the right economic direction. He also believes that now with French stocks at

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A reader left the following.
“…and looked at two of my ETFs, MXI and DBN which together constitute about 1.8% of my total portfolio, but 8.6% of my basic materials holdings. I know it is redundant to hold both, but want to choose “wisely” between the two.