The Daily Reckoning - Myanmar Examined (Jim Rogers)

verfasst von Firmian, 03.10.2003, 11:30

-->Myanmar Examined

The Daily Reckoning

Paris, France

Thursday, 2 October 2003

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*** Sunny weather, traveling editors...

*** Dollar down... gold down... bonds down... but a
spectacular market 'melt-up' in evidence...

*** What's good for Wal-Mart is good for the U.S....eating
your way to prosperity... meanderings in Myanmar... and more!

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It's a crisp, beautiful autumn day in Paris... which your
Parisian editors are missing.

Shed no tears for them, however. Bill is en route to sunny
Delray Beach in Florida; Addison is on his way to pasta e
vino in Milan, Italy.

In the meantime, we bring you the latest from your New York
editor, Eric Fry:

-------------

Eric Fry in lower Manhattan...

-"Manufacturing Index in U.S. Declines to 53.7 as Pace of
Expansion Slows," a somber Bloomberg News headline declared
yesterday. But an adjacent headline read:"Stocks in U.S.
Climb on Earnings Optimism." Despite the second
disappointing reading from the nation's manufacturing
sector in as many days,
the stock market kicked off the final quarter of 2003 with
a spectacular 'melt-up.' Investors simply ignored the bad
news, as they bought their way to good news: the Dow jumped
194 points to 9,469 and the Nasdaq Composite Index surged
45 points to 1,832.

- Portfolio managers - and other manic investors - trampled
over one another in a mad dash to buy back the same stocks
they had unloaded in late September. Such are the
sophisticated tactics of 'professional' money managers.

- Following the timeworn practice known as 'window-
dressing,' many professional investors dump their worst-
performing stocks at the end of the quarter, so as not to
show losing stocks on their quarterly statements to
clients. These proud professionals don't want to look like
buffoons, after all. Then, on the first day of the new
quarter - when no pesky clients are looking over their
shoulders - the money managers race back in to the market
and gobble up stocks, including, in some cases, the stocks
they just sold. Remember, this is professional
management... Don't try this at home.

- While the stock market soared yesterday, bonds, gold and
the dollar all fell. In the bond market, the 10-year
Treasury note dipped slightly, pushing its yield to 3.98%
from 3.94% at the previous close. December gold futures
dipped $1.10 to $385.00 an ounce. And bringing up the rear,
once again, the dollar fell against all major currencies.
Usually, a booming stock market lends support to the
dollar. But these days, nothing seems to lend support to
the dollar.

- Ironically, yesterday's disappointing news that the
Institute for Supply Management index of manufacturing
activity fell to 53.7 percent in September from 54.7
percent in August emerged on the same day that the dollar
hit a three-month low against the euro. But wait a minute!
Hasn't Treasury Secretary Snow been touting the weak dollar
as a sure-fire cure for the struggling U.S. manufacturing
sector? And hasn't the dollar been tumbling for more than a
year? And yet, isn't the manufacturing sector struggling
just as much as it was when the price of a euro was only 83
cents, instead of $1.17?

- Evidently, the dollar must fall even further, if the
manufacturing sector is to revive. Not to worry! Help is on
the way! It's clear that our nation's elected (and
appointed) officials will not rest until the manufacturing
sector rebounds, or until a dollar bill buys fewer goods
and services than a sheet of toilet paper... whichever comes
first.

- And just in case the dollar's value doesn't erode quickly
enough to boost exports and bail out America's high-cost
manufacturing operations, Congress stands at the ready to
impose 27.5% across-the board tariffs on Chinese exports
into the U.S..

- Either way, Americans lose. Either way, our dollars will
lose purchasing power. Either way, we will need to shove a
few extra dollar bills into our wallets before heading off
to Wal-Mart.

-"Probably no single company illustrates the benefits of
sourcing cheap imports from China better then Wal-Mart,"
says Stephanie Pomboy, editor of MacroMavens."Importing
roughly $12 billion in goods from China (or roughly 10% of
our total trade gap with China) the company has been able
to maintain margins and increase headcounts. Indeed, since
China first pegged the yuan to the dollar in 1994, Wal-Mart
has nearly tripled its workforce from 528,000 to 1.4
million today... As the country's largest employer, what's
bad for Wal-Mart is probably bad for the U.S. overall. If
so, the message would seem to be that, by raising input
prices and squeezing profit margins, a Chinese re-
evaluation will end up costing more jobs than it saves."

- Pomboy's analysis is more than just idle conjecture. Hot
off the government presses comes a report from the U.S.
International Trade Commission that tariffs placed on
imported steel last year cost the U.S. economy $30 million.

- Is anyone surprised by this finding?... We assume that the
tariffs on imported steel rescued a handful of steelworker
jobs. But we would also assume that the resulting hike in
steel prices led to the dismissal of many workers in
various steel-consuming industries. In other words, what's
good for a steelworker may be very bad for an autoworker.
And for the economy at large, a steelworker's job is no
more precious than an autoworker's... unless you happen to
be a steelworker.

- It's obvious to almost every citizen who does not live in
Washington D.C. that tariffs do more harm than good. And
devaluing the dollar to stimulate economic growth is also a
fool's mission. Maybe ice cream is the answer...

- Many Americans will pay $3.50 for a pint of Ben and
Jerry's ice cream to help subsidize Vermont's dairy
farmers, or to help Ben & Jerry's save Brazil's nut
farmers... or to help Ben & Jerry's save almost anything at
all. Why not"Tungsten Treat" to save America's steel
workers? Let's launch a product line for every globally
uncompetitive industry in America. Let's eat our way to
prosperity!

- Alternatively, does anyone doubt that Americans would
jump at the chance to save Pittsburgh's endangered
indigenous steelworkers by buying 25-cent paperclips or $1
thumbtacks or $200 toasters?

- Paying $3.50 for a pint of ice cream may be a little
crazy. But at least the choice to do so is voluntary. And
at least the"Ben & Jerry's" subsidy model is market-based,
not governmentally imposed. The steel industry and other
select U.S. industries may benefit from a devalued dollar,
but the rest of the nation pays the bill in terms of
reduced global purchasing power. If Greenspan and Snow have
their way, a pint of plain-label vanilla ice cream at
WalMart will cost $3.50.

---------------------

The Daily Reckoning PRESENTS: A potential (and literal)
commodities goldmine... where most likely, you've never
thought to look.


MYANMAR EXAMINED
By Jim Rogers

As recently as 1962, Myanmar - or Burma, as the British
have called it for the last 150 years - was the richest
country in Asia. Today, it is one of the ten poorest
countries in the world.

In 1962, in a military coup, General Ne Win put an end
to Myanmar's democratic government, establishing a one-
party state and instituting the party's"Burmese Path to
Socialism."

Guided by astrology and numerology and driven by
xenophobia, chauvinism, and arrogance, Ne Win cut the
country off from the rest of the world and ushered in the
era of economic stagnation that persists today, despite
Myanmar's potential wealth in raw materials and agriculture
and its large force of cheap labor.

Direct military control of the country came in 1988, when
popular pressure forced Ne Win to resign. In 1989 the
country's name was changed back to Myanmar. Outsiders
opposing the generals insist on calling the country Burma -
a fairly new colonial name. The anticolonialist people of
Myanmar and the generals insist on the historical name.

I decided to stay neutral on the political situation until
I had done my homework, but on the matter of the country's
name I did take the side of history and the people in the
street: Myanmar.

Various armed separatist movements have dominated the
country's politics over the last four decades.
Nevertheless, in the '90s, Myanmar slowly began to reopen
its borders to both people and capital - a process that
continues today. Considering the wealth of natural
resources and labor advantages a liberalized Myanmar could
potentially offer, it's worth taking a closer look at where
the country is headed.

In 1990, for the first time in thirty years, Myanmar held
multiparty free elections. The results, however, were
nullified when the opposition party headed by Aung San Suu
Kyi, the daughter of one of the country's founders, won a
decisive victory. In 1991, Myanmar became the focus of
international attention and the target of U.S. sanctions
when Aung, who had been placed under house arrest along
with other leaders of the elected government, was awarded
the Nobel Peace Prize.

Under General Than Shwe, who assumed leadership of the
ruling junta in 1992, the political repression diminished
somewhat. A convention was called to draft a new Burmese
constitution in 1996. (Aung San Suu Kyi's father had been
instrumental in liberating Burma from the British, and the
constitution whose drafting he oversaw stipulated that
Burma could not be placed under the leadership of someone
married to a foreigner. Aung San Suu Kyi, educated at
Oxford, who had been living in England before the election,
was married to an Englishman when she ran for prime
minister, making her ineligible for the position, according
to the country's military rulers.)

At the same time, the country began to emerge from its
international isolation. In 1997, in the face of U.S. trade
sanctions, Myanmar was made a full member of the
Association of Southeast Asian Nations (ASEAN), the
region's powerful trading group. Twenty years ago, there
weren't tourists in Myanmar. Fifteen years ago, tourists
could spend a week there. In the mid-1990s things loosened
up even more. Around the country, tourist hotels started
appearing. The government declared 1997 the Year of the
Tourist.

When I started posting reports from Myanmar on my Web site
http://www.jimrogers.com, I received numerous e-mails
from people who were furious that I was there, insisting
that I was merely supporting the rule of the evil generals
in charge. I should have been boycotting the country along
with all good people, they said. But not all good people
were boycotting the country.

Numerous nations were and are engaging Myanmar and doing
business there: Japan, China, India, Malaysia, Russia,
Singapore, for instance. These countries were poised to
exploit a variety of natural resources - timber, natural
gas, gold, and other minerals - and to capitalize on the
inevitable growth of tourism.

I would submit that the best way to change a country is to
engage that country. Isolation rarely brings change. You
want to put an end to Fidel Castro's hold over Cuba? The
pope's visit in the late 1990s did wonders - the Cubans
have openly celebrated Christmas ever since, not having
done so in more than thirty-five years. Send Jennifer Lopez
next. Castro will not live forever, and while the U.S.
State Department is sitting around waiting for him to
depart this vale of tears, the Europeans, the Mexicans, the
Canadians, and everybody else are flooding into Cuba,
buying up all the good stuff. By the time Castro is gone,
there are not going to be any decent deals left for
Americans. If it were legal to do so, you can bet I would
be putting money there now.

In Delhi I had visited Indian friends, Ajay and Aodiiti
Mehta, who had studied in the United States. With them was
an American woman who talked about her upcoming trip to
Myanmar. When I told her I would be there the following
month, she grew indignant, claiming that U.S. sanctions
prohibited my going."Why can you go and I can't?" I asked.

"Because I work for an NGO," she said.

Terrific.

"I'm going to Myanmar to examine the situation," she said.

"So am I," was my answer."Why should I let you go to
Myanmar, examine the situation, and make a judgment for
me?"

Did I mention that we did not get along?

The road to Mandalay, to which we were heading, was no road
at all; it was the Manipur and Chindwin Rivers. We had to
find our own roads, winding through the jungle. And many of
the roads were horrible. Myanmar is a primitive country,
and thus it was all the more striking to observe that all
the houses, however modest, were made of teak. But, of
course, teak is the country's major export. What would have
been really surprising, once we thought about it, would
have been to see a building constructed of pine.

One of the first things we noticed about Myanmar was how
pious the Burmese people are. Everywhere we turned we saw
another Buddhist temple. Every day in Mandalay at four
A.M., at a shrine to Living Buddha, the monks wash Living
Buddha's face and brush his teeth, preparing the statue for
a busy day. For the next twelve hours, as they have every
day since 1784, the faithful, lining up and awaiting their
turn, walk up to the figure and apply gold leaf to its
surface.

The leaf is procured from goldsmiths who work nearby.
Wielding heavy sledgehammers, unpackaging gold as it is
delivered, they pound for hours, flattening it out. They
work all day, taking breaks only when indicated by a
variation on the hourglass: a hollow coconut, with a hole
punched in the bottom, floating in water. When the coconut
fills with water and sinks, it is time to take a break. I
bought leaf from one of them - only men, no women, are
allowed to approach the statue - joined the queue outside
the temple, and added gold to the two hundred years' worth
that had been applied to Living Buddha.

We left Myanmar with a certain amount of regret. All in
all, it was an exquisite country to visit. The people were
gentle, religious, hard-working, and disciplined. While I
predict that the country will become more prosperous and
more open to the outside world, I do not see a great future
for Myanmar within the confines of its British-drawn
borders. It is unlikely to survive the next fifty years
intact. Already parts of the Shan State are practically
autonomous, controlled by warlords empowered by the opium
trade. Nor will violent separatist movements in other parts
of the country be put down easily.

Perhaps the Burmese ethnic group will have its own country
eventually. Nonetheless, if you want to see a country that
is untouched and pure, if you enjoy noodle soup and fried
dough for breakfast - you will get plantains for dessert
and a vegetable stew made with fish paste, called ngapi, at
all other times - I recommend Myanmar as one of the great
places to visit, and I suggest traveling there soon before
the rest of the world arrives. Entrepreneurs should be
especially quick, as the rest of Asia is rushing in.


Regards,

Jim Rogers
for the Daily Reckoning


P.S. When we were in Bagan, now a UN World Heritage site,
hundreds of people were completing pilgrimages to the
temples there, making offerings of food and flowers and
saying their prayers. In the countryside we stumbled upon a
cheroot factory, where one of the women rolling cigars
asked if we could send her some perfume when we got to
Yangon. Paige sent her some Chantilly. I suspect that the
NGO woman, with her concern about sanctions, would not have
approved.

In the past decade, sanctions have become a favorite tool
of the United States. Wherever we went, however, we found
that they were not effective, because competing products
swept in or American products were smuggled in. Either way,
American workers, businesses, and taxpayers, not the
'offending' countries, were the losers. Sanctions resulted
only in more enemies for the United States.

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gesamter Thread:

• The Daily Reckoning - Myanmar Examined (Jim Rogers) - Firmian, 03.10.2003, 11:30
  • Profil der Aktie - Börsenprofi, 03.10.2003, 12:09
    • Re: Profil der Aktie / Falsches Forum für solche 'Tipps'.... - -- Elli --, 03.10.2003, 12:25
      • Aha. Die Hilfsbereitschaft wird offenbar missverstanden. - Börsenprofi, 03.10.2003, 12:32
    • Da sieht das Glas-Auge falsch: Myanar ist Burma und Miramar hat damit nichts... - Emerald, 03.10.2003, 12:34
      • Uaaaaaah, *schäm*. Das ist schon sehr peinlich. Entschuldigung! - Börsenprofi, 03.10.2003, 12:46