Type in “forex” in Google and you’ll get a gazillion results. Sure, there’s some good stuff out there, but there is also an enormous amount of junk, spam and scam artistry.

The Brown Brothers Harriman Foreign Exchange page is the needle in the haystack. BBH is one of Wall Street’s oldest private partnerships. Prescott Bush - W’s grandaddy - was once a Brown Brothers partner. Conspiracy theorists may recognize the firm for its links to the Russell Trust Association, better known as Yale’s secretive Skull and Bones society.

And yet, for a 200 year-old institution, BBH is surprisingly Web-savvy. You can download daily PDF currency market commentaries, weekly reports, and other long-term thought pieces. Marc Chandler, the firm’s currency strategist, also maintains his own blog and is a Seeking Alpha contributor.

BBH also has impressive street cred when it comes to currencies. You can see their industry rankings here, which include a couple of #1 awards in 2008.

That doesn’t mean all their calls will be perfect. Nor will the site make you a currency guru yourself. But I’d venture to say that reading BBH’s stuff on a regular basis, coupled with a little additional homework on your own, will make you better informed than the vast majority of folks looking for get-rich-quick forex trading schemes.

We are also looking at Iraq, though we are not invested there now. We would have to convince a custodian bank to set up there though, and make sure the walls of the safe are thick enough… It could be six months to a year until that really comes together, and volumes would be small when it does.’

via citywire

The problems with leveraged ETFs, in general, have been well chronicled. So we won’t get into that here. For readers who are interested, Tristan Yates and Lye Kok have a nice article on the case against leveraged ETFs on Seeking Alpha with a lively discussion in the comment stream. It’s a bit dated, but the general principles still apply. More recently there was a good piece on the subject in Barron’s earlier this year.

The trouble with extending this type of product to the international realm is that the swings in value will be even more violent given that the underlying markets - especially China and emerging markets - are already extremely volatile in their own right. If a market is moving +/- 5% each day, there’s not much point in goosing that up with more leverage unless you’re a phenomenally skilled day trader. In the hands of a surgeon, a scalpel is a wonderful, life-saving tool. In the hands of a toddler, it’s a nightmare.

A broader problem is that these funds just encourage the wrong mindset about international investing. It’s wonderful to see more American investors finally embracing international investing after generations of investing most of their money at home. And bravo to the investment management industry for giving them innovative tools to invest in these markets, which were once all but off-limits to small investors. But when we start talking about making hopped up day trades on Chinese stocks, we’re taking a step backward, not forward.

A plausible theory is that the question has been asked, but Roubini has dodged it or refused to answer. And that’s exactly what I’d do if I were Dr. Doom. As Joe Weisenthal explains so eloquently in this post on Clusterstock, there almost no downside in being consistently negative about everything.

Now the arc of an uber-bear who misses the turn will look different than the arc of an uber-bull. A crash will render an uber-bull instantly irrelevant and mocked. They could be finished in one day. An uber-bear on the other hand, can maintain credibility and a cult following long after their predictions fail to come true. For one thing, negative people are just generally more respected by intellectuals and critics than positive people. For another, and this is key, you can never really prove a bear wrong.

They can bark at the moon for years and years for all different reasons, and when the crash comes, people will call them oracles. That was certainly the case with Roubini, who only honed in on the housing crisis after banging away on trade deficits for the longest time. Plus, there can always be another crash. You can’t prove there won’t be, so you can’t prove that they’re actually wrong. Ever.

And the shtick apparently works well with the babes too.

Leaving all of that aside…Bloomberg’s great Asia-based columnist Willie Pesek has finally uncovered a market that Roubini seems to like. And the winner is…

South Korea! Who knew?

Actually it’s not all that hard to understand, if you think about it.

The reason Roubini says Korea may grow more than 1.5 percent next year is the economic-policy changes made over the last 10 years. The 1997-1998 Asian crisis seemed like a curse at the time. It devastated the nation of 49 million and forced the government to accept a humiliating International Monetary Fund bailout.

Today, that experience is proving to be a blessing in disguise. The government assessed the magnitude of its problems and admitted how bad things were. It allowed weak companies and commercial and merchant banks to fail. It acted quickly to rid balance sheets of bad assets. As a result, Korea was the first Asian economy to recover from the crisis and repay the IMF.

The conference in Singapore also featured presentations by CLSA strategists and economists looking at the broader economic outlook for 2009 and 2010. Here are some of the interesting points made in those presentations:

* The total U.S. debt (public and private) was 370 percent of GDP at the end of the fourth quarter of 2008. That’s up roughly 50 percent in the past decade and, of course, this does not take into account the $1 trillion-plus in economic stimulus under President Obama.

* Nominal personal consumption growth in the U.S. is negative and at its lowest in nearly 50 years on a year-over-year basis. This is part of the deflationary trend under way, along with the deleveraging in the financial sector over the past five quarters.

* While emerging Asia (ex-Japan) remains heavily reliant on exports, it is consuming an increasing amount of its own production. In 2001, private consumption in emerging Asia was 25 percent of the U.S. level. In 2008, it was 38 percent. In CLSA’s view, when this consumption level hits 50 percent, you will begin to see an economic decoupling between emerging Asia and the West.

* CLSA’s respected Asia strategist Chris Wood came out with country weightings for the Asia Pacific region compared to the MSCI Asia ex-Japan index. He recommended that investors overweight India, China, Hong Kong and Taiwan and that they strongly underweight Australia (12 percent vs. 26 percent in the MSCI index) due to housing and financial issues.

* CLSA forecasts that China’s economy will grow 7 percent this year and 8 percent next year (9 percent in 2008), and that India will grow 4.6 percent this year and 6.4 percent in 2010 (6.3 percent in 2008). Major shrinkage is predicted elsewhere in the region in 2009: Taiwan -10.8 percent, Singapore -10 percent, Thailand -9 percent, Hong Kong -6.8 percent, South Korea -6.8 percent and Japan -5.5 percent.

* The key macro driver for India is the collapse of oil prices from last year’s highs. This functions like a huge tax break and, along with monetary easing by the Delhi government and underleveraged consumers, bodes well going forward.

via Seeking Alpha.

I sometimes think the Chinese term for IPO, “??” ( “shang shi”) has magical, intoxicating effect on some Chinese bosses. They hear it and suspend all their normal caution and suspicion. Soon, they end up agreeing to what are often truly disastrous transactions that don’t even deserve the name IPO.

There are, by some estimates, several hundred Chinese companies now listed on the OTCBB that are somewhere between “on life support” and “clinically dead”. Their share prices fell steeply immediately after listing (by which time the advisers, bankers and lawyers all pocketed their fees and lined up their next victims) and are below $1. There is little to no liquidity. They often trade at PE multiples of 1-2x. The costs of retaining the OTCBB listing are bleeding the companies of badly-needed money. They have no chance to raise additional capital, nor to do much of anything (except waste money on Investor Relations firms) to lift their share price.

I get angry just thinking about this. I’m offended that people in my field of work would be involved in such self-serving, greed-ridden transactions. Secondly, it’s also brought a lot of harm, and sometimes complete failure, to what were very good Chinese SME companies that once had bright futures, until they had the misfortune of putting their financial futures in the hands of these advisors.

Peter doesn’t name names, but he provides some detailed case studies in a follow-up post entitled “Built to Fail”. It’s fascinating - and very sobering stuff.

Once an investment theme gets its own acronym, it’s usually the kiss of death. But BRICs have been a rare exception. Despite the fact that these markets have been insanely volatile, and despite the fact that everyone and his uncle knew about them all along, BRIC still managed to shoot the lights out. You’d be hard pressed to find any global investing theme that has worked better in recent memory.

The numbers don’t lie. Over the past 5 years, MSCI’s BRIC index has risen a compound annualized 19%. MSCI’s plain vanilla emerging markets index returned 12% over the same stretch. EAFE and MSCI’s major European indexes were roughly flat, and the U.S. is bringing up the rear with an annualized loss of about 4% over those same five years. [All numbers via MSCIBarra.com]

None of this is to say that BRICs will continue to outperform. You’ll need to make that call on your own. But when something this powerful comes along, you at least need to take a closer look. Tom Lydon of ETFtrends.com, the ultimate ETF guru, has prepared an Ultimate Guide to BRIC ETFs that is a great resource for learning about the different investment options in these markets. Maybe you’ll find something on Tom’s list that you can buy…maybe you’ll find something you’d like to short. But you’d be crazy to ignore it.

It’s safe to ignore these theories or any others that hinge on comparisons to Japan. Why? Because Japan is different. Why is it different? Because it is. If you’ve lived there, you know exactly what I mean. If you haven’t, ask someone who has.

If this sounds confusing or Zen-like, so be it. Although Borderless Investor was founded on the belief that the world is increasingly global and that investors need to spend more time exploring international investing, Japan still belongs in its own separate bucket for analytical purposes.

When you make comparisons to Japan, it’s never really apples-to-apples. It might not even be apples-to-oranges. In a lot of cases, it’s more like comparing apples to, say, antique furniture.

Part of the reason is that you need to unpack the economic rationale of why something is happening in Japan and separate it from all the other political and social stuff that drives decision-making. This is not easy to do. And the “soft” political/social part of the analysis can be WAY more important than the “hard” numbers.

My former colleague Willie Pesek at Bloomberg Tokyo uses a great baseball metaphor in his latest column to drive home how Japan just does things very differently than the rest of the world.

It’s a microcosm of the difficulty Japan is having revamping its recession-prone economy. It shrank at a record 15.2 percent annual pace last quarter as exports collapsed and consumers and businesses cut spending.

The global recession gets most of the blame. The forces of old Japan, both in the government and private sectors, also explain why the economy isn’t holding up better.

Banks, for example, avoided the toxic debt that infected peers in the U.S. and Europe. That didn’t stop them from loading up on stocks via cross-shareholdings in friendly companies. The prevalence of takeover defenses and poison pills also is limiting foreign investment at a time when Japan needs it.

Japanese baseball can seem overly formulaic and rule-bound to foreigners. Then again, so can Japanese business. It’s often more about bunting than swinging away.