Says Bespoke (bold highlight mine), ``Twenty-one countries are up year to date, while 62 are down. One positive that can be drawn from this table is that all four BRIC countries are now in the black for 2009. These countries were the leaders during the last bull market, and they have also been some of the biggest decliners during the bear. The fact that these key countries are now trending upward is a sign that global investors are beginning to take more risk. China is up the most of all countries at 29.71%, while Russia is up 19.11%, Brazil is up 12.13%, and India is up 3.69%."
My comment:
Risks can be defined in relative and/or subjective terms.
US policies have presently been directed towards the "nuclear option" of currency devaluation via the Quantitative Easing or "Gonoism". These suggest of increasing inflation, credit and currency risks for the US. Alternatively, the rising risk profile of the US implies that US assets are becoming "riskier" relative to the BRICs.
Besides, given that international portfolio flows are expected to markedly contract, the positive performances of the BRICs and EM economies could be a consequence of local savings flowing into local assets in response to the global negative interest rates regime.
This has been the case of the Philippine Phisix, which I suspect has been the same dynamic driving most of the BRICs or EM markets.
So one data can be interpreted from two opposing angles.
More from Bespoke ``Unfortunately, all of the G-7 countries are still in the red year to date. Canada has been the best among them, while Italy has been the worst. With a decline of 9.11% year to date, the US is performing slightly worse than the unweighted average of all countries."
My comment: If G-7 countries are down while BRIC are up, isn't this a sign of "decoupling"?
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