From Reuters:
“For Chinese policymakers worried about social stability the most alarming news may have been the employment sub-index, which showed factories shedding jobs at the fastest pace on record.
Russia’s PMI showed a contraction in manufacturing deeper than the slump during its 1998 financial crisis.
In India, factories cut jobs for the first time in the survey’s 3- year history to reduce costs. The central bank slashed its two key short-term interest rates by 100 basis points to try to stimulate the economy.
In all three countries, factories reported slumping export orders with recession chilling demand in their largest markets — the United States, Japan and Europe.”
and outside BRIC, other world markets are struggling:
” South Korea, which ships a fifth of its exports to China, said export growth this year would be about 1 percent, the weakest since 2001.
Singapore’s government cut its economic forecast to a range between a decline of 2 percent and growth of 1 percent in 2009. Citigroup said that forecast was still too optimistic.
“If we are correct, 2009 will mark the most severe recession in Singapore’s history, surpassing the Asian Financial Crisis and the 2001 tech recession,” said Citigroup economist Kit Wei Zheng.
There were also signs of the slowdown biting in Africa, where some had hoped their less developed economies would be more isolated.
Tanzania cut growth forecasts and put off plans for a sovereign bond. Mauritius cut its 2009 growth forecast, fearing the global impact on its textile factories and the number of tourists visiting its Indian Ocean island beaches. …”
Comment:
That’s the end of “decoupling,” the theory that emerging markets, especially BRIC (Brazil, Russia, India and China) would decouple from a slowdown in Europe and the US. Right now, they seem to be taking a bigger hit than what the “decouplers” anticipated.
On the other hand, it would be foolish to rush to the conclusion that a global slow-down will work itself out in the same way across the board. Export dependency varies, and in each country the domestic market has a different relationship to the export sector. Singapore, for instance, is more dependent on export demand than India.
Full disclosure: I have a very small holding in the Malaysia country ETF (EWM) and it is down about 30%. MTE (Mahanagar Telecom), the only Indian stock I hold is down about 40%. But my global agricultural and water funds are down only 2% and 3 % each, giving me a total loss of under 5% – mainly from having tried to trade the GLD ETF.
(And, had I not been blogging, I would probably have sold those at the right time too. So, you dear reader, should not gripe too much at me, since doing my public duty at this blog is actually costing me. I daresay, I shall have to look to the Pearly Gates for any reward…unless they’ve been hit too…).