BRICs Priced For Economic Meltdown

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From Bloomberg
he biggest emerging markets are contributing more than ever to the global economy as their proportion of the world stock market shrinks, leaving investors with the widest valuation gap in seven years.Brazil, Russia, India and China, known as the BRICs, will comprise 20 percent of the world economy this year after growing more than four-fold in the past decade, International Monetary Fund data show. At the same time, their combined stock-market value has dropped to a three-year low of 16 percent of the total invested in equities, according to data compiled by Bloomberg.Enlarge imageDmitry Medvedev, Russia's president, center, waves to the media as he walks with Dilma Rousseff, Brazil's president, left, Manmohan Singh, India's prime minister, second from left, Hu Jintao, China's president, second from right, and Jacob Zuma, South Africa's president. Photographer: Graham Crouch/Bloomberg
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June 28 (Bloomberg) -- Jim Ross, senior portfolio manager at AllianceBernstein LP, talks about European investment strategy and the inflation outlook. He speaks with Guy Johnson on Bloomberg Television's "The Pulse." (Source: Bloomberg)To Jim O’Neill, the chairman of Goldman Sachs Asset Management who coined the term BRIC in a 2001 research report, the 4 percentage point difference makes stocks in these markets irresistible. The last time the gap was this wide, in 2005, the MSCI BRIC Index (MXBRIC) jumped 53 percent in 12 months, more than double the gain in the MSCI All-Country World Index. (MXWD)“Unless we are seeing a major collapse of those economies, it’s a huge opportunity for investors,” O’Neill, who helps oversee $824 billion, said in a June 28 phone interview. The BRIC stock markets may double by 2020 as their share of world gross domestic product increases to about 27 percent, he said.Combined GDP in the BRICs will rise to more than $14 trillion this year from $2.8 trillion in 2002, according to the IMF. Their equity value, which includes locally-traded shares and companies based in the BRIC nations with primary listings abroad, has dropped to $7.6 trillion from $9.5 trillion a year ago, when they made up 18 percent of the global total, according to data compiled by Bloomberg.

Fund Outflows

Petroleo Brasileiro SA (PETR4), Brazil’s state-controlled oil company, fell to the world’s 39th-largest company by value from the 10th-biggest in July 2011. China Construction Bank Corp. (939)’s rank dropped to 20 from 12 while OAO Rosneft, Russia (INDEXCF)’s largest oil producer, sank to 106 from 70. ICICI Bank Ltd. (ICICIBC), India’s second-biggest lender, has lost 17 percent during the past year, compared with an average gain of 9 percent for global peers.The retreat has pared what was a 180 percent increase in the MSCI BRIC index since October 2008 and reflects concern that economic growth is slowing, according to John-Paul Smith, an emerging-market strategist at Deutsche Bank AG in London. Mutual funds that invest in BRIC equities, which recorded about $70 billion of inflows in the past decade, have posted 16 straight weeks of withdrawals, losing a net $5.3 billion, EPFR Global data show.http://www.bloomberg.com/news/2012-07-02/brics-priced-for-economic-meltdown.html

Can't they just do the right thing and not be forced to settle? QB

GlaxoSmithKline settles drug-marketing case for $3 billion

The British pharmaceutical giant agrees to pay a record healthcare-fraud settlement for promoting a number of drugs for uses not approved by federal regulators. California will get $46 million.

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The U.S. government said GlaxoSmithKline marketed its depression drug Paxil, above, to patients under 18, even though the Food and Drug Administration had not approved the drug for pediatric use. (Joe Raedle, Getty Images / July 2, 2012)

By William D'Urso, Los Angeles TimesJuly 3, 2012GlaxoSmithKline, the maker of the popular depression drugs Paxil and Wellbutrin, agreed to plead guilty to federal charges and pay $3 billion in the largest healthcare-fraud settlement in U.S. history.The British pharmaceutical giant agreed to pay a nearly $1-billion fine for illegally marketing and promoting a number of well-known products for uses not approved by federal drug regulators, theU.S. Justice Department said Monday. The company will pay an additional $2 billion to settle allegations in connection with its sales, marketing and pricing practices on the state and federal level.As part of the agreement, California is set to receive $46 million, the largest sum of the 44 states involved in the settlement."Today's multibillion-dollar settlement is unprecedented in both scope and size. It underscores this administration's firm commitment to protecting the American people and holding accountable those who commit healthcare fraud," James Cole, U.S. deputy attorney general, said at a news conference in Washington.For its part, Glaxo said in a statement, "The company reached this settlement with the government to avoid the delay, expense, inconvenience and uncertainty of protracted litigation of the government's claims and to put behind us these long-standing investigations of what was, for the most part, very old conduct."The company's stock rose 79 cents, or 1.73%, to $46.36 on Monday.Critics of the settlement said the investigation did not go far enough. Public Citizen's Health Research Group issued a statement in which its director, Dr. Sidney Wolfe, called for more aggressive enforcement by federal regulators."Until more meaningful penalties and the prospect of jail time for company heads who are responsible for such activity become commonplace, companies will continue defrauding the government and putting patients' lives in danger," he said.The government said that Glaxo marketed its depression drug Paxil to patients under 18, even though the Food and Drug Administration had not approved the drug for pediatric use. It also said the company promoted Wellbutrin as a weight-loss drug and for the treatment of sexual dysfunctionand substance abuse addictions, and paid doctors millions of dollars to promote these unapproved uses of the drug. Doctors are permitted to prescribe drugs for "off label" conditions, but pharmaceutical companies are not allowed to market products for non-FDA-approved uses.Glaxo was also accused of failing to include important safety data to the FDA about its diabetes drugAvandia.In 2009, the attorney general's office announced the creation of the Health Care Fraud Prevention and Enforcement Team. The Justice Department has since amassed more than $10.2 billion in settlements and fines and has brought criminal charges against more than 800 defendants."California consumers have the right to expect that their health and well-being — and not profit — drives decisions about their care," said Kamala D. Harris, California's attorney general. "This settlement protects consumers and puts an end to unscrupulous marketing practices, kickbacks and illegal labeling of prescription drugs."http://www.latimes.com/business/la-fi-glaxo-settlement-20120703,0,7588461.story