http://en.wikipedia.org/wiki/John_Paulson 英文だが、読んでください。おカネの作り方が判るかも知れないから（笑い）。伊勢平次郎 ルイジアナTrader Racks Up a Second Epic Gain $5 Billion Profit for John Paulson
By GREGORY ZUCKERMAN
Hedge-fund manager John Paulson personally netted more than $5 billion in profits in 2010?likely the largest one-year haul in investing history, trumping the nearly $4 billion he made with his "short" bets against subprime mortgages in 2007.
Hedge-fund manager John Paulson personally netted more than $5 billion in profits in 2010, the single largest one-year haul in investing history.
Bridgewater Associates chief Ray Dalio personally made between $2 billion and $3 billion last year.
Jesse Neider for The Wall Street Journal + David Tepper, founder of Appal…
David Tepper, founder of Appaloosa Management, also personally made between $2 billion and $3 billion in 2010.
James Simons, founder of Renaissance Technologies LLC, produced profits of around $2 billion.
Mark Lennihan/Associated Press 1/4 prevnext.Mr. Paulson's take, described by investors and people close to investment firm Paulson & Co., shows how profits continue to pile up for elite hedge-fund managers. Appaloosa Management founder David Tepper and Bridgewater Associates chief Ray Dalio each personally made between $2 billion and $3 billion last year, according to investors and people familiar with the situation. James Simons, founder of Renaissance Technologies LLC, also produced profits in that range, say investors in his firm.
By comparison, Goldman Sachs Group Inc., Wall Street's most profitable investment bank, paid all of its 36,000 employees a total of $8.35 billion last year. James Gorman, chief executive of 76-year-old investment bank Morgan Stanley, is expected to receive compensation of less than $15 million for 2010.
Mr. Paulson and his fellow managers seldom take much of their profits in cash. Some of the profits are so-called paper gains, which reflect the rising value of their firms' holdings, and could erode if those investments sour. Other gains come from selling investments, and most of those are rolled back into their funds.
Mr. Paulson and the other top managers made winning bets on commodities, emerging-market companies, bank shares and U.S. Treasury bonds, among other investments. These moves, along with profitable picks by other funds, are part of the reason the hedge-fund industry is back on its feet after a rough stretch. Assets managed by hedge funds have grown to a near-record $1.92 trillion, up 20% over the past year. Assets jumped almost $150 billion in the fourth quarter alone, the largest quarterly growth on record, according to Hedge Fund Research, Inc.
Still, the average fund gained just 10.49% last year, according to the research firm. That's well below the 15% gain of the Standard & Poor's 500 stock index, including dividends, and the 19% return of the average stock mutual fund, raising questions about whether the industry can profitably invest the influx of new cash.
.Indeed, the enormous gains by Mr. Paulson and the other managers resulted from solid, though not spectacular, performance. Their personal gains came in part from the sheer scale of assets under their control. The largest hedge fund in Mr. Paulson's $36 billion investment portfolio, Advantage Plus, grew 17% last year, while another big one rose 11%, falling below returns for the broader stock market.
Part of Mr. Paulson's more that $5 billion profit came from his firm's 20% cut of his funds' profits, known in the industry as the "performance fee." Those fees amounted to roughly $1 billion last year, according to a person familiar with the matter. An added plus for Mr. Paulson: A chunk of those profits are treated as long-term capital gains and taxed at a far lower rate than the standard income-tax rate.
More than $4 billion came from gains on Mr. Paulson's investments in his funds.
Mr. Paulson amped up profits for himself and many of his investors in a novel way. He was worried about long-term weakness of the dollar and other major currencies, so he devised a way to embed a bet on gold into each of his funds?for those investors who opted for that approach. Mr. Paulson has placed the bulk of his own wealth in these gold-denominated funds and a separate gold-focused fund. Because gold rose sharply in value last year, the gold-denominated versions of his funds rose as much as 45%.
The performance last year, nevertheless, paled in comparison to his 2007 returns, when Mr. Paulson made a huge wager against subprime mortgages and his funds scored gains of as much as 590%.
Last year "wasn't the greatest trade of all time, but to manage more than $30 billion and still have gains topping 30% is very rare in the hedge-fund business," says Jeffrey Tarrant, who helps run Prot醇Pg醇P Partners, a New York firm that invested in Paulson & Co. in the past.
One way to view the size of Mr. Paulson's $5 billion profit: It is nearly as much as the $6.4 billion that Forbes magazine last year estimated as the total net worth of Steven Cohen, the well-known head of $12 billion hedge-fund firm SAC Capital. (Mr. Cohen likely added about $1 billion in 2010, one investor says, after 16% gains in his flagship fund).
Appaloosa's chief, Mr. Tepper, who specializes in distressed-debt investing and manages around $16 billion, notched gains of about 30% by turning optimistic about U.S. stocks before many rivals. Mr. Tepper correctly anticipated the Federal Reserve's recent efforts to boost the economy, steps that have helped the market rally.
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Oil Is the New Gold Access thousands of business sources not available on the free web. Learn More Mr. Dalio's Bridgewater Associates, which manages $86 billion in hedge funds and other vehicles, made an early shift to U.S. Treasurys, commodities and emerging-market currencies. He correctly anticipated that the Fed would flood the financial system with cash to help the economy, something that would boost bond and gold prices. Bridgewater also anticipated growth in China and emerging markets, which it figured would help commodities and currencies of those nations. Its hedge funds gained more than 30% last year.
Mr. Simons no longer runs day-to-day trading at Renaissance Technologies, which manages nearly $16 billion and specializes in lightning-quick computer-based trades, so his pay actually dropped a bit in 2010.
But Mr. Simons still owns the bulk of the firm and invests in its hedge funds. Renaissance's two funds available to outside investors, Renaissance Institutional Equities and Institutional Futures funds, gained about 18% last year, following a disappointing 2009 when the firm considered closing them to outsiders.
Renaissance's Medallion fund, which is primarily open to Renaissance employees like Mr. Simons and has long recorded big gains, climbed about 30%, according to people close to the matter.
The hedge-fund business now is so big that some managers are hinting they'll return money to clients instead of investing it. Handling so much cash can make it hard to generate big gains in some trading strategies.
Mr. Tepper, for example, has told some investors to expect to receive some cash back in 2011. He returned $500 million to investors last year. This year, he may return several billion dollars, according to people close to the matter.
Other firms, such as Paulson & Co., have closed certain funds to new investors, but are actively raising new money for other funds. Mr. Paulson recently hosted a New York City event that featured speeches by former Fed chief Alan Greenspan and several chief executives of gold companies, aimed at boosting interest in his gold-focused fund.
Despite Mr. Paulson's winning touch in 2010, he may face a challenge. Gold is down more than 6% so far in 2011, meaning he is likely starting out with losses.
Write to Gregory Zuckerman at firstname.lastname@example.org
from The Wall Street Journal
(1/26/11)The Federal Reserve will continue to buy government bonds to boost the recovery, even as it acknowledged that the U.S. economy looks in better shape. The Fed also kept interest rates unchanged.
At their first policy-setting meeting of 2011, central-bank officials voted unanimously to push ahead with the $600-billion purchase plan, though three of the four new Federal Open Market Committee members have been critical of the move. Still, the full backing won by Fed Chairman Ben Bernanke could indicate to financial markets that the program is likely to be completed.
Fed officials said that while global food and raw material prices have been rising, their preferred gauge for where prices are heading -- which strips out such volatile energy and food items -- remains within the U.S. central bank's comfort zone. Fed officials noted some progress in consumer spending but said they still see the economy constrained by high unemployment, slow income growth and tight credit.
EDF’s Solar ‘Time Bomb’ Will Tick On After France Pops Bubble
Jan. 19 (Bloomberg) -- France’s solar power boom that’s led to farmers building unneeded barns just to cover them in panels is costing Electricite de France SA more than a billion euros ($1.3 billion) a year as it meets state pledges to pay above- market prices for renewable energy.
French payments for solar-generated electricity sold into the distribution grid were the highest in Europe in 2009, leading to a 10-fold capacity increase in two years. What’s been a boon for panel owners and manufacturers has hit EDF because a tax to cover the higher costs of renewable electricity has fallen short.
“This is a time bomb EDF needs to defuse as soon as possible,” Bertrand Lecourt, an analyst at Deutsche Bank AG, said by telephone from Paris. While “the totally out-of-control phase” could be over, “it’s still something to be watched carefully,” he said.
The cost is siphoning off funds from EDF as it plans to spend 35 billion euros to extend the life of France’s aging nuclear plants. Europe’s largest power producer also aims to invest tens of billions of euros building plants in the U.K., China and Italy. The tax shortfall will widen this year and last until 2017 even as the government moves to cool the solar rush, said Aurel BGC analyst Louis Boujard.
EDF shares have dropped 20 percent over the past year, compared with a 3.7 percent decline in Europe’s Stoxx 600 Utilities Index. The Paris-based company had net debt of $57 billion euros at the end of June, according to a company filing.
Elsewhere in Europe, governments have stepped in to contain spiraling growth in solar generation.
The Czech Senate introduced a temporary tax on solar producers in December, and Spain limited the hours during which existing solar parks can earn premium rates. Germany almost doubled the surcharge consumers have to pay in renewable-energy subsidies starting this year.
To end what it has called a “speculative bubble,” France on Dec. 10 imposed a three-month freeze on solar projects to devise rules that could include caps on development and lowering the so-called feed-in tariffs that pay the higher rate for renewable power. The tariffs were cut twice in 2010.
“We just didn’t see it coming,” French lawmaker Francois- Michel Gonnot said of the boom. “What’s in the pipeline this year is unimaginable. Farmers were being told they could put panels on hangars and get rid of their cows.”
The French cuts haven’t slowed demand for new solar projects. EDF received 3,000 applications a day to connect panels to the grid at the end of last year, compared with about 7,100 connections in all of 2008, according to the government and EDF. France could reach its 2020 target of 5,400 megawatts of solar generating capacity by the end of 2011 if all proposed projects are completed.
France’s energy regulator estimates EDF will pay an average of 546 euros a megawatt-hour for solar power in 2011. That’s almost 10 times estimated spot market power prices of 55 euros, and the highest among renewable energy sources.
The promise of rich returns spurred suburban supermarkets to put photovoltaic panels in parking lots and farmers to install units on empty, purpose-built barns, according to a French parliamentary report.
“Most panels installed in France were made in China with a highly questionable carbon footprint,” Environment Minister Nathalie Kosciusko-Morizet told parliament last month. Policy must “create jobs in France, not subsidize Chinese industry.”
The higher payments for renewable power are supposed to be covered by a levy added to consumers’ electricity bills, which also pays for the supply of power to needy households. For the last two years the CSPE levy, which remained at 4.50 euros a megawatt-hour between 2004 and the end of 2010, failed to keep up with the mounting costs.
France raised the tax to 7.50 euros a megawatt-hour from Jan. 1, short of the 12.90 euros the regulator estimates is necessary to eliminate the shortfall through the end of 2011.
The new level and further increases in the coming years may allow EDF to reach a “balance” in the system by 2017, Aurel BGC’s Boujard said by telephone.
“EDF shouldn’t have to pay for renewable energy development in France,” Boujard said.
EDF’s shortfall was 1.4 billion euros in 2009, and is estimated to exceed 1 billion euros in 2010, the Commission de Regulation de l’Energie said in a report published this month. With the CSPE set at 7.50 euros a megawatt hour this year, the shortfall will reach an estimated 3 billion euros at the end of 2011 because of the increase in solar capacity, according to data in the report.
The solar component of the tax shortfall will rise to about a billion euros in 2011 compared with 60 million euros in 2009, according to Philippe de Ladoucette, head of the agency.
The development of wind and solar energies is “widening a deficit considerably,” EDF Chief Executive Officer Henri Proglio told Senators Dec. 14. “One can’t ask EDF to be the banker for marginal or local industries,” he said.
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Last Updated: January 18, 2011 19:01 EST
Washington more hard nosed against Beijing
By John Pomfret
Washington Post Staff Writer
Tuesday, January 18, 2011; 9:06 PM
The arrival of Chinese President Hu Jintao in the United States brings him face to face with an Obama administration that has grown more hard-nosed about the course of what is arguably the most important relationship the United States maintains with a foreign power.
Hu faces an Obama administration more hard-nosed about Chinese government
Hu Jintao arrives for state visit focused on economics, security, human rights
Job creation seen as key to China's investment in U.S.
Chinese follow same old script (and they get the punch line)
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Hu landed at Andrews Air Force Base on Tuesday afternoon and had a private dinner with President Obama before substantive talks were to begin Wednesday on security, economic and political issues. Hu will meet congressional and business leaders in Washington on Thursday before heading to Chicago for a day.
The summit with Obama will probably be Hu's last as China's president; he is set to retire in 2012 and be replaced by the vice president, Xi Jinping. One tangible outcome of the summit is expected to be an invitation to Vice President Biden to go to China, which would set the scene for Xi to visit the United States, a rite of passage for those about to rise the chairmanship of China's Communist Party.
Analysts say Hu is eager to burnish his legacy as a competent steward of China's ties with the United States. But he will find an administration that views his government with significant misgivings.
Obama entered office expressing a sense that together the United States and China had an opportunity to solve many of the world's problems. Indeed, unique among presidents dating to Richard M. Nixon, Obama entered office striking a gentle tone toward China.
Secretary of State Hillary Rodham Clinton said during a trip to China in February 2009 that pressing the country on human rights issues "can't interfere with the global economic crisis, the global climate change crisis and the security crises." In another sign of goodwill, Obama became the first president since the 1990s to fail to meet the Dalai Lama during one of the exiled Tibetan leader's trips to Washington.
But after a difficult summit in China that November, followed by clashes over climate change and a $6.4 billion weapons sales package to Taiwan in January 2010, the attitude among U.S. officials changed. Google's decision to pull out of China, along with its allegations that the Chinese government had hacked into one of its servers, added tension to the relationship. And Beijing's outraged opposition to the awarding of the Nobel Peace Prize to jailed dissident Liu Xiaobo further convinced U.S. officials that China was not interested in accommodating Western concerns over human rights.
In July, Clinton led a group of 11 Southeast Asian nations in resisting China's claims to the whole South China Sea. On the economic front, the Obama administration has slapped tariffs on Chinese goods and is challenging China's clean-energy policies. The administration has also directed the U.S. Export-Import Bank to take the unprecedented step of matching China's below-market-rate financing on important international business deals.
Tensions between the two countries also flared over how to handle the Korean Peninsula, with a senior Obama administration official accusing China of "enabling" North Korea's military brinksmanship. Over six months in 2010, North Korea launched two attacks on South Korea - killing 48 soldiers and two civilians.
"Despite the positive rhetoric surrounding the Hu visit, the Obama administration today has a greater sense of the limits of cooperation with China," said Daniel Kliman, a visiting fellow at the Center for a New American Security. "The administration will of necessity continue to engage China on global and regional issues, but with diminished expectations."
More broadly, Kliman said, the administration has changed its strategy with China. Obama began his administration apparently thinking he could win support in Beijing by doing China favors. That notion seems to have dissipated. "These officials have since realized that you can't bank goodwill in Beijing," he said. "Rather, standing firm is the more effective approach."
The new attitude was in evidence last week.
During the 2009 summit, as difficult as it was, the two sides released a long communique about U.S.-China relations. This time, it remains unclear whether there will be one - despite indications that Hu wants one.
In 2009, Obama played down human rights issues by postponing his meeting with the Dalai Lama. Last week, Obama met with Chinese dissidents and human rights advocates and discussed how he could use U.S. leverage to push China to improve its record.
It was also apparent in speeches by Clinton and Treasury Secretary Timothy F. Geithner, both of whom were blunt to the point of pugnacity. Near the end of his speech, Geithner put China on notice that if it wanted progress on its demands for a better investment climate in the United States and more access to U.S. technology, it had better bend to U.S. demands that China allow the value of its currency to rise and open its markets to U.S. firms. In the past, U.S. officials had avoided such threats.
Clinton, who once trod gently on the question of pushing a human rights agenda, gave a full-throated defense Friday of U.S. values and put the Chinese on notice that it would figure importantly in the future, as well.
Obama Gives Hu First State Dinner Showing Dual Views of China
＞＞二面という用語が正しいかどうか分からないが、米中関係の見方はその立場によって複雑だ。ファクトはこうだ。米中経済が密接になった～中国の巨大貿易黒字～中国国内の不満～USの労働者の不満～北朝鮮の核～イランの核、、いくら非難しても人権は改善されない。だから取り敢えず、オバマも胡も経済を先に持ってくるのだ。オバマの人権などには、偽善に近い芝居がある。日本は米中接近を恐れるが、わが方も「したたか」になればいいのだ。外交とは、国益のために、お互いを利用することに過ぎないからだ。そうでしょ？ 伊勢平次郎 ルイジアナ
Jan. 18 (Bloomberg) -- President Barack Obama often portrays China as an economic bogeyman. With Chinese leader Hu Jintao in Washington, the U.S. president will pivot, emphasizing China as a partner and marketplace.
Hu arrives in Washington today for his first state visit to the U.S. with Chinese executives, including those from auto- parts maker Wanxiang America Corp. Before he leaves the U.S., he will be guest of honor at a formal White House dinner, tour a Chinese factory near Chicago and meet with U.S. business leaders from companies such as Boeing Co. and General Electric Co.
The itinerary, which has a business focus much like Obama’s trip to India in November, is an illustration of the importance both countries place on their economic relationship and meshes with the U.S. president’s goals of boosting exports and spurring job growth.
“Jobs equals trade equals China,” said Charles Freeman, a specialist in China studies at the Washington-based Center for Strategic and International Studies.
The economic relationship between the two countries, marked by more than $400 billion in annual trade, is complicated by disagreements on issues from human rights to China’s enforcement of intellectual property rights and what U.S. officials say is the artificially low value of China’s currency.
Obama and members of his administration have frequently pointed to the dual aspects of the U.S. stance toward China. During and after last year’s congressional campaign, Obama warned audiences that the U.S. must keep pace with China’s drive to modernize its infrastructure and education system, and develop alternative energy sources.
Playing for First
“They’re playing for first place and we need to play for first place,” he told Democratic Party donors at one fundraiser.
Treasury Secretary Timothy Geithner said last week that China “presents enormous opportunities for the United States and for the world.”
“But its size, the speed of its ascent and its policies are a growing source of concern both here and in countries around the world,” he said in a Jan. 12 speech in Washington.
The chief foreign policy advisers to both presidents laid out parallel themes for Hu’s visit: increasing interdependence on strategic and economic issues is inevitable and desirable.
“The historical trends of Sino-U.S. relations are irreversible,” Vice Foreign Minister Cui Tiankai told diplomats and reporters in Beijing Jan. 14. “China-U.S. cooperation is indeed indispensable to the solution of many global issues.”
Secretary of State Hillary Clinton struck a similar note in a speech later the same day in Washington.
“Our economies are entwined and so are our futures,” Clinton said. “A thriving America is good for China, and a thriving China is good for America.”
U.S. concerns have grown as China’s rising economic might put the economic relationship off balance; China had a $252 billion trade surplus with the U.S. in the first 11 months of 2010, according to Commerce Department data.
Commerce Secretary Gary Locke on Jan. 13 called the trade imbalance “not sustainable.”
“We need a more equitable commercial relationship,” he told the U.S.-China Business Council in one of a series of speeches on China last week by Obama officials. “The policies and practices that have shaped our relations over the past few decades will not suffice.”
At the heart of the differences over trade is the value of China’s currency, the yuan, which administration officials and members of Congress say is undervalued and gives Chinese exports an unfair advantage by making them cheaper.
The yuan has climbed about 3 percent against the dollar since Chinese officials in June scrapped a peg which had been in place since the global financial crisis. Geithner told reporters Jan. 14 at the White House that China needs to let its currency appreciate “more rapidly.”
Even so, the administration is emphasizing with Hu’s trip the potential benefits created by China’s growth. Obama will bring a group of U.S. executives from companies including Chicago-based Boeing, Fairfield, Connecticut-based GE and Motorola Solutions Inc., whose headquarters are in Schaumburg, Illinois, to talk about access to Chinese consumers and businesses.
“There’s this enormous appetite for being able to market products in China,” said Representative Randy Forbes, a Virginia Republican and the chairman of the Congressional China Caucus.
While Hu is in Chicago, U.S. and Chinese companies will announce about 40 agreements, the Chicago Council on Global Affairs said.
Also on the agenda for Obama and Hu are foreign policy issues such as the nuclear programs in North Korea and Iran, political tensions in Sudan and military ties between the U.S. and China. Obama also plans to raise China’s human rights record.
Michael Green, an Asia expert at CSIS, singled out the “awkward juxtaposition” of Obama hosting for a state visit the leader of a country that has imprisoned a Nobel Peace Prize laureate, Liu Xiaobo, who has been in a Chinese jail since last year on a charge of plotting to subvert the ruling Communist Party.
China analysts and administration officials said they don’t expect any breakthrough accords between the two nations.
“I have what I guess what I call modest expectations,” said Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics in Washington. “Both sides are very heavily constrained politically what they can do to accommodate the other.”
More important may be the symbolism of the trip. The last state visit for a Chinese leader was when then-president Bill Clinton played host to President Jiang Zemin on Oct. 29, 1997. While former President George W. Bush met with Hu in the U.S., the session wasn’t accorded the status of a state visit. That trip was marred by a demonstrator who criticized persecution of the Falun Gong religious group at Hu’s welcome ceremony at the White House.
For Hu, in the last two years of his presidency, the full trappings of a state visit provide a measure of respect that will help bolster the relationship with the U.S., said Orville Schell, director of the Center on U.S.-China Relations at the Asia Society in New York.
Schell compared a state visit to a reaffirmation of marriage vows between a long-married couple.
“It’s not that the relationship is terrible,” he said. “It’s that it has a funny way of declining in between the re- declaration of vows that goes on at each presidential meeting.”
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The Triple-A Debt Threat
By RICHARD BARLEY
The European debt crisis has thinned the ranks of triple-A sovereigns, with Spain and Ireland falling by the wayside.
The crisis is moving inexorably toward the core of the global financial system, leading to speculation that others may be hit, too. Can the Big Four, the U.S., U.K., France and Germany, be sure of their ratings?
For the U.S., the key threat is fiscal policy. Trillion-dollar-plus deficits in 2011 and 2012 will take their toll on debt dynamics. The share of interest payments to federal revenue is set to rise under unchanged policy to 17.6% by 2020 from 8.6% in 2010, in the danger zone for a top-ranked country. Without offsetting measures, Moody's has warned the risk of a negative outlook being assigned to the triple-A rating rises over the next two years.
For Germany and France, one concern is the fiscal policies of other euro-zone countries and the related contingent liabilities, whether through bailout mechanisms or the debt holdings of German and French banks. Expanding bailout mechanisms may not pose a direct threat to triple-A ratings as long as these liabilities don't materialize. That helps explain the effort to introduce burden sharing on sovereign debt in the future. This could help cap states' own exposures, while allowing them to offer more support.
The U.K. already has had a scare, having been given a negative outlook by Standard & Poor's in 2009 before being reprieved in 2010. But risks related to the implementation of austerity politics and policy fatigue remain.
Beyond the immediate crisis lie problems related to age-related spending on pensions and health care that now are becoming urgent. If policy were left unchanged on this spending, a highly hypothetical and unlikely assumption, S&P estimated last year that the U.S. would be rated A by 2020, BBB by 2025 and junk by 2035.
The big risk is that bond markets, rather than ratings companies, act first on these pressures. In Europe, a widening of the euro-zone safety net may weigh on German and French bonds. Perversely, even a solution of the crisis may hurt, RBS argues, as it might free the European Central Bank to raise rates, a prospect that seemed to move closer Thursday with hawkish comments from ECB President Jean-Claude Trichet. In the U.S., bond-market vigilantes could force budget consolidation through sharply higher rates.
The fate of the Big Four's triple-A ratings lies in the hands of politicians.
The Biggest Tests for Mongolia Lie Ahead
By RICHARD BARLEY
For many countries, the global financial crisis and its aftermath is the stiffest test they are likely to face for years. For Mongolia, however, the recession, banking crisis and International Monetary Fund package that set the tone for 2008-2009 are likely to pale in comparison with the challenge of managing the next decade. As the country finally unlocks its stockpiles of copper, gold and coal, it will have to cope with unprecedented economic pressures.
Mongolia's enormous Oyu Tolgoi copper and gold complex is expected to start production in late 2012. As a result, the IMF forecasts 2013 gross-domestic-product growth of 28%, the fastest in the world, up from forecast increases of 7%-8% in 2011 and 2012. Foreign direct investment both in the mining industry and in infrastructure is expected to be many multiples of GDP of just $5 billion.
Coping with those flows will be a challenge. The appreciation in the Mongolian togrog against the U.S. dollar is raising fears of Dutch disease, whereby the country becomes ever more dependent on natural resources as money floods in, making other sectors less competitive. The infrastructure needs are colossal: In a country the size of Western Europe, there are fewer paved roads than in Luxembourg, according to Renaissance Capital.
For investors, getting exposure is a challenge. The Mongolian stock market has a market capitalization of about $1 billion, and trades only one hour a day. But the bond market may offer an entry route in 2011. Mongolia plans to tap the bond market, likely for $500 million. Given the enthusiasm for emerging markets and Mongolia's unique opportunities, that could be one of the hottest deals of the year.