Emerging Markets Decoupling, The Great Dichotomy Continues

Stock-Markets / Emerging Markets
Mar 29, 2010 - 07:37 AM

By: Martin_D_Weiss

While the U.S. economy is still bogged down by massive federal deficits and a new wave of home foreclosures, key foreign economies are already leaping ahead without those heavy burdens.

Just look at the scoreboard:

The Dow is up 20 percent since the first day of trading of last year, thanks in great measure to government bailouts of the U.S. banking system … brokerage industry … housing and mortgage markets … Detroit … and virtually every other sector that got into big trouble.

Meanwhile, in the same period …

The leading ETF that tracks China’s blue chips (FXI) is up 31 percent, over 1.5 times better than the Dow.
The ETF tied to South Korea’s stock market (EWY) is up 68 percent, more than tripling the Dow’s performance. And ..
The Brazil ETF (EWZ) is up 92 percent, four and a half times better than the Dow.
But this is certainly not a new story. We have been avidly telling readers about it for years …



Foreign currencies and stocks exploding higher: In October 2007, we showed you how key currencies and foreign stocks — such as the Japanese yen and the Brazil ETF — were headed sharply higher. In contrast, we stressed unequivocally that a “shocking new plunge in the housing market [was] a heavy-weight on the U.S. dollar and economy.â€