Subway-riding dogs

Last weekend's Financial Times featured an article by Susanne Sternthal, "A wolf in dog's clothing" (the photo above accompanied the article). I found this to be the most interesting part:

[Animal behavior specialist Andrei] Neuronov says there are some 500 strays that live in the metro stations, but only about 20 have learned how to ride the trains. This happened gradually, first as a way to broaden their territory. Later, it became a way of life. "Why should they go by foot if they can move around by public transport?" he asks.

"They orient themselves in a number of ways," Neuronov adds. They figure out where they are by smell, by recognising the name of the station from the recorded announcer's voice, and by time intervals. If, for example, you come every Monday and feed a dog, that dog will know when it's Monday and the hour to expect you, based on their sense of time intervals from their biological clocks."

I wonder if Kirstin Bakis read Sternthal's article and was inspired.

BRIC Versus CRIB

In an op/ed in yesterday's Financial Times, Michael Hudson, an economics professor at the University of Missouri, ventriloquized the thoughts of foreign opponents of the United States, while warning of ominous consequences from the summit in Russia this week of the BRIC countries (Brazil, Russia, India, and China) ("Washington Cannot Call all the Shots"):

Many foreigners see the US as a lawless nation. How else to characterise a country that holds out a set of laws for others – on war, debt repayment and the treatment of prisoners – but ignores them itself?

[...]

It is no mystery to other countries how the US remains above the law. Foreigners see a financial system backed by American military bases encircling the globe. The IMF, World Bank, World Trade Organisation and other Washington surrogates are seen as vestiges of a lost American empire no longer able to rule by economic strength, left only with military domination. They see this hegemony cannot continue without adequate revenues and are attempting to hasten the bankruptcy of the US financial-military world order.

[...]

US officials wanted to attend Yekaterinburg as observers. They were told no. It is a word that Americans will hear much more in the future.

Mark Chandler, Global Currency Strategist at Brown Brothers Harriman, had a slightly different take on this summit recently ("Bric or Crib?"):

Brazil, Russia, India and China, now collectively known as the BRICs, will hold a summit in Russia on June 16th. Besides the Goldman Sachs invented moniker, these countries have very little in common except for the fact that they believe, to seemingly varying degrees of intensity, that they deserve greater influence in the conduct of world affairs than they currently have. And given the enormity of US power, as hard-core realists, they know any increase in their power and influence will come at the expense of America’s.

[...]

One of the most important reasons why the BRICs do not have the economic clout that they would like is frankly they don’t deserve it. Goldman-Sachs had a story (and more) to sell with its BRICs concept, but those same letters spell a real word, CRIB. The point is that the countries, outside of China, are not among the largest.

According to Bloomberg data, at the end of last year, China was the fourth largest economy ($3.2 trillion), behind the US, Japan, and Germany. This of course takes the Chinese data at face value, and given the often large gaps between energy production and reported GDP growth, as well as the amazing consistency of the pace of growth, many often cast a suspicious eye on Chinese data.

With a GDP of $1.3 trillion in 2008, Brazil was the 10th largest economy, though it is roughly half the size of France, which is the 6th largest economy. Russia and India were neck-and-neck for 11th and 12th places with each having produced about $1.2 trillion of goods and services last year. Spain’s economy is nearly 20% bigger than Russia’s and India’s, and it is the 8th largest economy. Together the BRICs account for a little more than 12% of the world’s GDP, and China alone accounts for half of that.

Trouble in Russia

With all the excitement in the U.S. markets this week, the crash in the Russian stock markets, and the subsequent suspension of trading Tuesday (The Financial Times: "Russia halts trading after 17% share price fall") didn't get as much attention as they might have otherwise. Now Forbes reports that the Russian stock markets are set to reopen tomorrow ("Inside Russians Stock Market Panic").

A couple of months ago, I mentioned an e-mail I received from friend who worked for a Moscow-based brokerage. I've sent him an e-mail to see what his thoughts are on the current situation there.

E-Mail From a Friend in Russia

This morning I got an e-mail with some Cyrillic letters in the "from" field. At first I thought it might be international spam, but it turned out to be a message from a friend of mine named Beck (his American nickname) who is originally from Uzbekistan, but came to the U.S. for his bachelors and masters degrees, and subsequently got a green card. After a short stint in the cubicles of corporate America, he left for greener pastures: Russia. Now he works for an investment firm in Moscow, and he offered this bit of advice about investing there:

Think about it, US is not a very attractive market in terms of investments now due to economic situation and falling dollar. Russia, on the other hand is booming economically, and there are thousands of undervalued stocks to invest in.

I agree with him about the unattractiveness of the broad U.S. market now, but I am still a little wary of investing in Russia directly. I do own shares of a T.Rowe Price mutual fund that has holdings in Russia (TREMX) and has more than doubled over the last 3 years. Of course, Russia is benefiting from the secular bull market in commodities, but there are ways to benefit from that secular bull market while taking on less political risk, in my opinion (e.g., investing in selected Canadian or Australian companies).

Then again, he's there, and I'm here, so perhaps there are aspects to the Russian story he sees that I don't. If I learn more, I'll post it here.

Here is a link to the English-version website of Beck's firm, Broker Credit Service, if anyone would like to check it out.