Thursday, January 21, 2010

China Losing to U.S. Among Investments of Choice (ON BUBBLE FEARS)

" Jan. 21 (Bloomberg) -- Investors have turned bullish on the U.S. while tempering their enthusiasm for China as they worry about a market bubble there, according to a Bloomberg survey.

An overwhelming majority also see a government debt default on the horizon this year, according to a quarterly poll of investors and analysts who are Bloomberg subscribers. Greece is considered the riskiest government, followed by Argentina, Russia, Ireland, Portugal, Italy, Spain and Mexico.

Sentiment toward the U.S. investment climate has flipped in just three months. Almost six of 10 respondents are now optimistic about the U.S. while a majority held a pessimistic outlook in an October poll. A nine-month rally in U.S. stocks has pushed up the Standard & Poor’s 500 Index 68 percent through yesterday’s close.

“There appears to be a surge in interest in the U.S., and it’s in marked contrast to tepid attitudes only three months ago,” said Ann Selzer, the president of Selzer & Co., a Des Moines, Iowa-based polling firm that conducted the survey.

“American consumers are regaining confidence, and with that alone, there should be no impediments for current business to resume the growth of the past decade,” said poll respondent Drew Beatty, a commodity derivatives sales analyst with Wells Fargo & Co. in Dallas.

The number of U.S. investors who see their economy improving has steadily marched upward over the past two quarterly polls, more than doubling since July.

Tie With Brazil

China, the world’s fastest-growing major economy, is viewed as a bubble by 62 percent. About one-third of respondents said China offered the best investment opportunities over the coming year, almost tied for first place with the U.S. and Brazil, though down sharply from October, when 44 percent ranked China best."

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