Rainer's Investment Insights

market snapshot this morning 09:10h Stock markets in the US fell sharply last night.  Especially tech stocks saw a large and ominous sell off. Don't we all know why? It's not the debt ceiling, surely!  They, that is all parties to the process of resetting the ceiling, agree they will HAVE to do it.  Instead, ideological standoffishness and unsavoury arm bending stops law makers from signing on the dotted line.  Should we, the rest of the world. care? Oh, indeed! The USA was and remains at the forefront of the fallout of the financial collapse in 2008.  Do we really expect to start over with a clean slate, just as if nothing significant happened?* just a rhetorical question.. However, the current impasse is not about learning from mistakes, rather how to best manipulate to one's own advantage.  I guess that US grassroot movement now throwing their weight about was named 'tea party' because that sounds the most innocent and removed from its intrinsic motives

Congressman Paul supposedly posed the question to Ben Bernanke in the US Congress last week about whether "Gold = money:?" " NO " replied Mr. Bernanke, reportedly.  At the same time, he advised that he would be happy to print money for the third round of QE if financial markets need it, - or the economy needs it? Who needs it exactly? Banks? You and me? Gold since early July 2011 Of course his (BB's) answer is CORRECT.  Gold is not money , because money is just a nominal means to pay for the real - or unreal - things we want.  By printing more, we are diluting its value in real terms, while gold has intrinsic value - for as long as humans fancy it.  And fancy they do , big time. Last week, in a huge move from under $1490, gold prices raced to new all-time USD highs of  $1593. In a subsequent pullback last Friday, prices then 'successfully' retested the previous high of 1577/1581 (May 2011) and may now well be on their way past the 1600s range.

Today, I hope to start a series of regional market observations, exploring whether - in the big scheme of things -  they offer investment opportunities for longer term investors, - and if so, provide some ideas of upside potential and likely strategies. The First Topic: Latin America , and - for the purpose of research - Brazil's BOVESPA, comparing it with mutual funds for Brazil and Latin America as a region.  While in the main we limit ourselves to equity research, I also want to make comparisons with emerging market bonds/ Latin American bonds. To make this a viable exercise for long term investor, we look back some three years, i.e. from August 2008 till now.  This 3-year time frame coincidentally gives us plenty of clues on where we are - and where these regional markets are heading, viewed from a technical analysis perspective. BOVESPA & NASDAQ - There goes the proverbial correlation! This chart has only one message, and it is an important one: Stock markets