The politicians in Canberra are probably as popular in Beijing at the moment as Gordon Ramsay is in Australian news studios. Having rebuffed the bid for Ozminerals’ Prominent Hill, they will also be held culpable in Chinese eyes for Rio’s (partially) commercially driven snub to Chinalco, which was then made much worse by the announcement of the Rio/BHP iron ore joint venture, neatly creating a duopoly from the prior three player market. The fig leaf covering this clear anti-competitive move is a commitment to keep marketing separate. We would not blame either the European competition authorities or their equivalent in China for hallucinating over squadrons of flying pigs before they took this commitment at face value. Yet the Chinese need minerals, and can’t afford to throw all the toys out of the pram and walk away. » Read more: China’s security on commodity supply

After five decades, the Institute for Financial Analysis has polled its members, who now no longer believe in efficient markets – or, more specifically, that share prices do not reflect all available information. Does this mean an end to the random use of Greek letters in financial jargon? What should a rational investor do without his trusty Capital Asset Pricing Model? Is the DCF dead? How can one function in these volatile times without a simplistic framework?

We view this apparent mass epiphany as arrant nonsense, verging on sacrilege. The world is awash with financial information, dispensed with formidable rapidity to a very wide audience by Bloomberg , Reuters, CNBC, email and even Twitter for those of a trendier persuasion. CEOs can’t scratch their nose without it being made public, and any informational advantage that an investor can claim is likely to be either fallacious or illegal. Where the academic fraternity has gone wrong is in assuming that all participants interpret new news in the same way. This has NEVER been the case, and it most certainly isn’t now. » Read more: Efficient market theory – RIP

Five years ago India had an election. There was a surprise victory for the Congress-led coalition over the BJP and the market fell 20% in a day. This marked the low and the market subsequently quadrupled over the next three and a half years. As it turned out the effect of having to accommodate some of the left-leaning coalition partners on economic policy was somewhere between immaterial and zero.

This week the election result caused a 20% move up in the market as Congress will be less beholden to minority coalition partners. Good news if you are a Congress MP looking for a plum job, but rather less obviously great news for investors. Indeed for the IT, pharmaceutical and other export orientated industries the result is an unambiguous negative as the 5% appreciation of the Rupee will decimate their earnings if this level of the currency is sustained. » Read more: India

Fixed asset investment figures for the first 5 months showed a 33% increase YoY. For May alone it was up 38% YoY. Within that real estate investment in May was up 12% versus a 6% improvement in April.  Despite these big numbers, the stimulus measures continue.

Auto numbers were up by a similar quantum YoY supporting evidence of renewed consumer confidence.

We have said before that China cannot save the world single handed but that it can save itself. The evidence appears supportive.