Jeremy Grantham Sees Profits in Emerging Markets Bubble

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View This Message on the Web November 11 Jeremy Grantham: With Great Depression II Nowhere in Sight, Look to the "Emerging Markets Bubble" for Maximum Profits [Editor's Note: This market-outlook commentary appeared as part of the most recent GMO LLC Quarterly Letter, and was excerpted with permission. To view the full newsletter on the GMO Web Site, please click here.] By Jeremy Grantham Chief Investment Strategist GMO LLC The good news is that we have not fallen off into another Great Depression. With the degree of stimulus there seemed little chance of that, and we have consistently expected a global economic recovery by late this year or early next year. The operating ratio for industrial production reached its lowest level in decades. It should bounce back and, if it moves up from 68 to 80 over three to five years, will provide a good kicker to that part of the economy. Inventories, I believe, will also recover... Read Full Article » The U.S. Retirement System could owe YOU Money A recent University study reports that millions of Americans could qualify for an extra $10,000 or more per year thanks to the U.S. Govt's retirement program. If you've worked and have paid into this program, it's your legal right to collect your full benefit. New report explains the details... Sponsored content The Three Key Economic Issues Obama Will Tackle In His First Asia Trip By Bob Blandeburgo Associate Editor Money Morning When U.S. President Barack Obama this week makes his first visit to Asia as the nation's chief executive, he will have no shortage of issues to address. However, there are three key subjects that he will pay particular attention to. China's currency, the yuan, which Beijing keeps undervalued to boost exports. The large trade imbalance between China and the United States. And a pending free trade agreement (FTA) with South Korea. Analysts believe President Obama will push to ratify a free trade deal with South Korea that was signed in 2007 but has failed to pass legislatures in both countries. Many also hope he will pursue other agreements like it... Read Full Article » Investment News Briefs With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world. Dodd Introduces Financial Overhaul Bill; Ex-Bear Stearns Managers Innocent of Fraud; Job Openings Still Scarce; AMEX: Credit Card Spending Up in Oct.; EU Objects to Oracle; Oil Falls As Hurricane Ida is Downgraded; Apple Cell Phone Profits Pass Nokia's; JPMorgan to Hire 1,200 Mortgage Salespeople U.S. Senate Banking Committee Chairman Christopher Dodd, D-CT, unveiled a new bill that calls for the creation of three new government agencies to regulate over-the-counter derivatives and crack down on hedge funds in an ambitious regulatory overhaul. One agency that would be created under the bill would be a Consumer Financial Protection Agency (CFPA) that would regulate mortgages, credit cards and other financial products. "The financial crisis exposed a financial regulatory structure ... unable to prevent threats to our economic security," Dodd said. Two former hedge fund managers at The Bear Stearns Cos., Ralph Cioffi and Matthew Tannin were found not guilty of misleading investors who lost $1.6 billion in the first test of the federal effort to obtain convictions tied to the subprime mortgage crisis and recession. A 12-person jury deliberated for less than a day before reaching the verdict, which saved the managers from serving as many as 20 years in prison if convicted. The acquittal could set the stage for any future prosecutions related to the crisis. "Any time the government undertakes a major prosecution in a new area, the outcome certainly influences its thinking about the prosecutability of other potential defendants," Jacob Frenkel, a former U.S. Securities and Exchange Commission lawyer told Bloomberg News. "Acquittals force prosecutors to rethink their theories and charges." There's an average of about 6.1 unemployed workers for each job opening in the United States, the Labor Department said. That's down slightly from 6.2 in October and a sharp increase from just 1.7 workers per opening when the recession started in December 2007. Still, some sectors are showing small signs of life in hiring, such as information technology and sales professionals, government reports and job search Web sites show. "We've seen a real spike in the hiring of contract recruiters," Phil Haynes, managing director of AllianceQ, an employers' association that includes companies such as Starbucks Corp. (Nasdaq: SBUX), Bank of America Corp. (NYSE: BAC) and Intuit Inc. (Nasdaq: INTU) told The Associated Press. "The recruiters come before the jobs." Annualized billings on credit cards grew 3% from September to October, American Express Co. (NYSE: AXP) said. When adjusted for foreign-exchange rates, the billings fell 1%. That was an improvement over a decline of slightly more than 5% in September and almost 10% in August. "The trends in spending are encouraging, and there are signs that the recession may be approaching an end," Chief Executive Officer Kenneth Chenault said at a financial services conference organized by Bank of America-Merrill Lynch (NYSE: BAC). Shares of the lender hit their 52-week high of $39.86 before settling at $39.68, up 1.61%. Antitrust regulators in the European Union formally objected to Sun Microsystems Inc.'s (Nasdaq: JAVA) proposed $7.4 sale to Oracle Corp. (Nasdaq: ORCL). The "statement of objections" from the European Commission was expected, as it has shown concern that Oracle will be too strong a presence in the database market. The deal has already been given the green light by the U.S. Justice Department. Contracts for light, sweet crude for December delivery yesterday (Tuesday) fell 38 cents to settle at $79.05 per barrel on the New York Mercantile Exchange (NYMEX) after Hurricane Ida passed several oilrigs in the Gulf of Mexico without incident. The hurricane has now been downgraded to a tropical storm. Apple Inc. (Nasdaq: AAPL) overtook Nokia Inc. (NYSE ADR: NOK) in the third quarter as the having the highest operating profit among cell phone makers, market research firm Strategy Analytics said yesterday (Tuesday). Stategy Analytics estimated Apple's profit on its popular iPhone stood at $1.6 billion versus Nokia's $1.1 billion. Nokia still dominates with a worldwide market share of 40%, but has just a 10% share in the United States. "We believe the United States, where Nokia now trails Apple in marketshare, is the key to Nokia's recovery in 2010," analyst Neil Mawston told Reuters. JPMorgan Chase & Co. (NYSE: JPM) said it will hire 1,200 mortgage loan officers by the end of next year as the company pursues new mortgage business and refinancing opportunities. The new sales staff will work at bank branches in 23 states including California, Florida and Texas. "We have made a number of strategic investments in our organization," said Dave Lowman, head of home lending at Chase. "We have invested in new systems, aggressively grown our capacity and now are looking to increase our sales force. With our vast branch network and growing customer base, the opportunity for Chase loan officers is tremendous." Read Full Article » Money Map Report Login » 11/10/2009 IEA World Energy Outlook: Declining Investment Threatens Recovery 11/09/2009 Kraft Launches Hostile Bid for Cadbury 11/09/2009 U.S. Companies Finding More Consistent Growth Overseas Feature Rising Gold Prices: Inflation Isn't the Whole Story See More » The Week Ahead November 9 No major economic releases. November 10 Federal Reserve officials, including the San Francisco Fed President Janet Yellen, to speak. November 11 Retailer Macy's Inc. reports earnings. November 12 Weekly initial jobless claims (11/07). Retailer Nordstrom Inc. and Walt Disney Co. report earnings. November 13 An update on the trade balance and consumer sentiment. J.C. Penney Co. reports earnings. Worth Considering How to Read an Executive's Mind Buy, Sell, or Hold? by Horacio Márquez Insights on Income by Martin Hutchinson Inside Wall Street? by Shah Gilani When and How the U.S. Economy Will Recover Three Big Reasons Oil Prices Will Rally Back Big Time Alternative Energy Asia Commodities Europe Global Markets Gold/Precious Metals Oil Real Estate Technology U.S. Economy

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