With the Egypt stockmarket down by a lot in the last couple of days: http://www.telegraph.co.uk/finance/...nds-shares-plunging-10pc-to-two-year-low.html and the Egypt ETF following the stockmarket down: http://finance.yahoo.com/q?s=egpt I thought it was worthwhile to spend some time looking at what countries' stockmarkets could underperform the US stockmarket. My basic idea is that emerging markets' stockmarkets will underperform the US stockmarket, because people in countries with lower incomes will be hurt more by rising food prices than those in the US. "The 25 Countries Whose Governments Could Get Crushed By Food Price Inflation" http://www.businessinsider.com/governments-food-price-inflation- 2011-1 "Interactive Map Of Recent Food Riots And Price Hikes" http://www.zerohedge.com/article/interactive-map-recent-food-riots-and-price-hikes Some geographic regions to consider: Africa (recent riots in Egypt, Algeria, Tunisia) Latin America: riots in Chile (ECH); also look at Brazil (EWZ), Peru (EPU) ETF country exposure tool: http://etfdb.com/tool/etf-country-exposure-tool/ ETFs to consider shorting: EEM ILF FRN AFK PMNA GULF GAF EGPT
This post from Fiat Economics http://fiateconomics.com/?p=2518 http://fiateconomics.com/wp-content/uploads/2011/01/Misery_Map.jpg uses the "misery index" as a barometer for civil unrest. The author makes the point that Tunisia and Egypt scores are high (above 24) versus scores of 15 or below for well developed countries. The obvious difficulty is that the index uses official figures, and many people query the relevance of official inflation figures in the US and elsewhere.
And yet we have great news. By the end of this year we will be 7 billion. Population growth is indeed and big problem. I dont think the world can properly feed the next billion mouths expected to show up in the next decades.
I agree. Human overpopulation is a big problem, but it's effects aren't really making headlines in the mainstream media as yet. Peak oil, food price increases, the list goes on
I note that today the EWZ (Brazil ETF) was down 1.50% despite the S&P 500 being up by a little. As such, the ILF (Latin America) ETF was also down by over 1.10%, with Brazil being 58% of the ETF. http://us.ishares.com/product_info/fund/overview/ILF.htm Components of the ILF etf include Brazil (ETF = EWZ) Mexico (ETF = EWW) Chile (ETF = ECH) and is looking quite weak. Understandable given food riots. Peru (ETF = EPU) I also note that ETFs containing Egypt exposure were weak today: AFK, FRN, PMNA, GULF, GAF http://finance.yahoo.com/q/cq?s=AFK,FRN,PMNA,GULF,GAF&d=v1 According to http://etfdb.com/country/egypt/ these ETFs have Egypt exposure of <20%. For concentrated Egypt exposure, see EGPT.
Egypt protests live on Al Jazeera http://english.aljazeera.net/watch_now/ (until the police stop the broadcast): http://www.zerohedge.com/article/al-jazeera-broadcast-about-be-shut-down-police Oil up 2.90% S&P 500 down 0.80% ho-hum nothing to see here
Speaking of contained inflation and inflation expectations... Food and Agriculture Organization of the United Nations Food Price Index reaches new highs http://www.fao.org/worldfoodsituation/FoodPricesIndex/en/
China (and Egypt) need to turn the desert into a farm, desalinate the ocean. India needs to turn the Bay of Bengal into a fish farm or something. Grand plans that need renewable energy and capital, big time. IMO the technology is there, but capital is not invested toward what the world really needs. Too big, Too risky, too long term, too much money. Meanwhile, trillions of dollars are tossed around. Why invest in the future when you can make money on nonsense?