Once, there were two central banks. Each was the member of a secret society, an exclusive club known only to outsiders as the 'BRICs.' While each of these CBs represented a different constituency with very different strengths and weaknesses, they fought against a common opponent: inflation.

While these offerings certainly represent a growing interest and subsequent accessibility to India’s economy, the first half of 2008 has proven difficult for India’s investors and the country as a whole. Government data released on June 20 indicated that inflation had hit a 13-year high of 11.05%, exceeding economists’ expectations by more than 1%, while last year inflation was only 4.3% for the corresponding week. Despite the Reserve Bank of India’s June 11 rate hike, which brought repurchase rates to 8% to take aim at inflation, concerns have only increased as June draws to a close.

I think something very different is going on for most Emerging Market investments. The unvarnished truth is that many countries in the world have been Communist or heavily Socialist since the end of World War II.  BRIC is the poster child of Emerging Market investing.  The RIC part of BRIC is definitely a case of these countries throwing off the yoke of a centrally planned economy and moving towards a free market/Adam Smith type approach.   Brazil appears to go contrary to the general thrust of this article and will be discussed below.

In my view, financial speculators are largely responsible for the recent surge in the price of petroleum. Indeed, this is yet another case of “irrational exuberance”, similar to the previous technology and real estate bubbles. Of course, as in previous bubbles, financial speculators will provide many seemingly convincing arguments to rationalize their actions.

Currently, India conducts about 1.5 percent of the global clinical trials. This could rise to five percent by end of 2008 and 15 percent by 2011.  Outsourced pharmaceutical manufacturing activity in India is expected to cross $1bn by 2010 (Motilal Oswal Report).   

The chart below, taken from a recent Credit Suisse report entitled “Challenges for Hollywood in Bollywood”, shows just how far the industry has come in recent years:

The US market share has been declining steadily in recent years, while other markets have been increasing. Today, the US market (SPY) has declined to less than 41% from nearly 53% as recently as of 2004, according to the S&P “World by the Numbers” report.  In earlier times, the US share was much higher than 53%.

After all, key emerging economies are driving global markets, not only via burgeoning exports and in the scramble for scarce raw materials, but also in their growing financial muscle, which promises to alter the balance of international financial power.

To what extent are these concerns justified? An in-depth look at the state of the offshore outsourcing and currency markets and the key risks surrounding Infosys are presented in the next section.

Here's how it would work: Reliance would provide between $500 million and $600 million in financing, allowing Spielberg & Co to raise debt, giving the new independent studio up to $1.5 billion dollars in financing. The studio- likely run by Spielberg, Geffen, and Stacey Snider, now their top executive at DreamWorks--would churn out six movies a year. Then they'd distribute through one of the major movie studios--Universal Pictures (CNBC's sister company) and 20th Century Fox are reportedly frontrunners for that deal.

When last we looked at the Indian banks,I was buying these gosh awful charts that had completely broken down, hoping we'd have some "double bottoms" in place. [Jun 3: Starting to Build up Indian Banks]

I normally do not buy charts like this; I like to buy strength most times, not weakness. But I am hoping a double bottom is being formed with mid March lows in both these names. Further, in the "No Indian Bank Left Behind" program, I am almost obliged to throw these guys a bone. I've not treated these 2 stocks as buy and holds, but more of trading vehicles and the layer in/out approach has actually worked wonders with these two since we have nice profits.

He did not specifically address China in that article.  Did he mean that India would fare worse than China or worse than most Asian countries?  We don’t know.  We hope to hear more from him on that question.

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It is but surprising to note that Sensex PE levels rose from around 23 in September of last year to around 28 in January. But the retribution was swift and it is presently lurching at around 21 levels.

Earlier this week, there was a story in The Economic Times about Infosys being granted two patents by the US Patents and Trademark Office.

As shown in the chart below, Brazil is up 9% and Russia is up 7% since early December, while India is down 21% and China is down 31%.  If things don't begin to turn around for the two laggards soon, we'll probably start seeing just "Brussia" ETFs.

China loves investment - on its own terms, as it controls many stocks through special voting rights and exercises control to the extreme over practically any venture that threatens to loosen the communist dogma that is omnipresent, albeit with a smiling face at present.