By Martin Hutchinson Contributing Editor With sky-high growth potential, China and India are the two markets no investor can afford to miss out on. But that doesn’t mean they’re impervious to market turbulence, and in times of trouble, India is the more reliable investment. No doubt, both countries’ markets are suffering this year, with China’s Shanghai A Index down 50%, and India’s Sensex Index down 25%.  It’s no secret that India is struggling with both a growing budget deficit and mounting inflationary pressure. But China has problems too – it’s just hiding them under the carpet until the Olympics are over. That’s why, for me at least, the investment decision is clear – I’ll buy the country whose problems are out in the open and already reflected in stock prices. China’s Pending Credit Crunch China’s inflation has been quiescent recently. It declined from 8.7% ...

Where should you put your money in 2008? And more importantly, how can you make money in 2008? These are not easy questions to answer. With the credit crunch sending shock waves around the globe, and the Fed’s dismal attempts to solve the problem, these questions loom large … Fortunately, there are some good answers just waiting in the wings. One market in particular not only looks bulletproof, it is posting some of the fastest - and most consistent - productivity gains of all the Asian countries. In fact, this particular economy is one of the most competitive on the planet.  And get this: It’s dirt cheap, trading at a P/E of only 12. Many investors have shied away from this mega-growth market - but that ...

The current credit crisis should be both a squeeze and a crunch, but it seems to have been neither in the euro area. This column explains why credit may become costlier or scarcer under current conditions and explores how European financial entities seem to be defying the negative news. There are two channels through which the present credit crisis can affect economic activity. The first is prices, making credit more costly, and the second is quantities, making it scarcer. Dearer credit is called a "credit squeeze" and while scarcer credit is called "credit crunch". The euro area seems to be suffering neither of the two, at least for the time being. Credit may be getting dearer for at least for four reasons. -Today's banks tend to face higher spreads when issuing debt compared to non-banks, even of the same rating, thus their lending to ...

Three Financial Groups In Trouble The impact of the credit crunch saw two banks and a financial and industrial group fail on Friday in three different countries in the most damaging day so far since the crisis started last August.US banking regulators on Friday swooped in to take over mortgage lender IndyMac Bancorp Inc, the second-largest bank failure in US history and the fifth bank to close this year. In Denmark the country’s central bank bailed out the Roskilde Bank after it had encountered severe liquidity strains following asset write-downs. And in London, media reports said the $A4 billion Dawnay Day financial and industrial group had become a victim of the credit crunch after talks over the weekend agreed to the appointment of administrators to some of its companies and businesses later today, and a string of asset sales. The three separate problems show that the credit crunch hasn’t gone away: ...

Confidence levels among the top end of Japanese business is at a four year low as companies forecast lower earnings for the first time in seven years. At the same time big companies say they will lift capital expenditure 2.4% over the coming financial year (which ends March 31, 2009 in Japan), compared to a forecast three months ago of a decline. But that was about the only crumb of comfort from the latest quarterly Tankan survey of manufacturer sentiment from the Bank of Japan yesterday. As with industrial production figures, the Tankan survey is considered to be perhaps the best guide to Japanese business confidence and conditions because of the way manufacturing still dominates the economy, unlike the US and Europe where services are now the main driving sector. That’s why the 5 points slide in sentiment in June from 11 in March, (the third quarterly decline in a ...

No surprise here - I mentioned in the fall the path for "no more house ATM for you" American consumers would be credit cards first, drain 401ks (whatever they actually invested, which is very little) second, beg borrow steal (pawn) next, and away we go to bankruptcy circa 2009 last. Real wages stagnant for a decade (using government inflation figures, far worse with 'real inflation') eventually will catch up to you. Keep in mind folks, we are not even "in a recession"; what happens if we "enter" one.Thankfully issues like this will be resolved in less than a month as the 2nd half recovery commences, and my scenario will not play out. Once July 1, 2008 arrives and the 2nd half recovery begins we won't have to deal with front page stories like this one in the Wall ...

Investors have been surprised by the FTSE/JSE All Share Index’s strong rally of 24,9% since the market’s low on 23 January 2008. What is even more surprising is the large difference in the improvement of the major sub-indices. Resources companies have rallied by an incredible 44,8% on the back of only a few shares, followed by industrial companies with 18,6% and financial companies with only 9,4%.

As a result of the sharp rise in commodity prices on global markets and the woes of foreign banks (owing to the credit crunch), investors are sorely tempted to switch investments in resources companies to financial companies. However, investors should bear in mind that the return on an investment in a

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When Americans first celebrated Memorial Day, our nation was split in two — North and South.

Similarly, our planet today is divided in two separate worlds — East and West.

They’re not at war. But in the never-ending battle for economic wealth and hegemony, the chasm between them couldn’t be deeper: China and much of Asia, growing by leaps and bounds; the U.S., sinking into recession.

Coincidentally, one year ago, Tony Sagami and I debated this very topic.

We both are American and both love this country. …

Equity bulls experienced another good week based on the viewpoint that the worst of the credit crisis might be behind us. A further improvement in investor sentiment and increased risk appetite caused market participants to cast aside a mixed bag of economic and corporate data and look across the “economic valley”.

This raises the question of whether the stock market euphoria is premature. Bill Gross of PIMCO (Money News) said the recovery is primarily due to federal policy moves to restore liquidity. It won’t last long, Gross warns. “Recession, and its vicious-cycle effect on employment and consumer spending, remains a threat,” Gross says. “This recession, though currently mild, and, as of yet, not even officially validated, may not be

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Gold’s precipitous tumble from its record-high of $1,038 set on March 17 down to the recent $850 level has lots of people asking, “Is gold’s bull market over?”

My answer: No! Not by a long shot!

I know you’ve been getting an earful from the talking-head ninnies about how the long-running commodity bull is getting short of breath and is about to be put out to pasture. Ignore them.

Other than a pullback here and there, gold — and virtually all natural resource prices — are headed much higher in the months and years ahead.

My next target for gold: $1,250 an ounce. Then, its inflation-adjusted high of at least $2,270.

Those numbers should come as no surprise. I’ve mentioned them several times before. Why I am I so bullish?

I’m not going to get into all the arguments …