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http://www.businessweek.com/news/2010-03-09/emerging-market-stocks-may-retreat-15-aberdeen-s-kaloo-says.html

By Tal Barak Harif

March 10 (Bloomberg) — Emerging-market stocks will drop as much as 15 percent this year as earnings miss estimates and global growth slows, said Devan Kaloo, who oversees $22 billion at Aberdeen Asset Management Plc.

Kaloo, Aberdeen’s head of global emerging markets, said he’s holding fewer Chinese stocks than are represented in the benchmark MSCI Emerging Markets Index because the government’s stimulus program may lead to a banking crisis. Kaloo said he’s “overweight” stocks in Mexico, India and Turkey, “neutral” on Brazilian equities and “underweight” Russia.

“The markets will see a correction this year,” Kaloo, whose Aberdeen Emerging Markets Institutional Fund has beaten 93 percent of competitors in 2010, said in an interview in New York. “People get over-optimistic and expect too much out of earnings and global growth.”

The MSCI measure of 22 developing nations’ stocks surged 75 percent last year, its best performance since its inception in 1987, as nations recovered from the first global recession since World War II. Kaloo’s $1.2 billion fund climbed 77 percent in 2009 and has returned 2.3 percent this year.

Greek Prime Minister George Papandreou said yesterday that if the turmoil in his country “metastasizes” it “could create a new global financial crisis with implications as grave as the U.S.-originated crisis two years ago.” Stocks plunged worldwide after the collapse of Lehman Brothers Holdings Inc. in September 2008 froze credit markets and caused global trade to plummet.

‘Major Imbalances’

MSCI’s emerging-markets index has dropped 0.3 percent to 986.15 this year.

“The credit crisis of 2008 hasn’t been resolved yet,” said Kaloo, who is based in London. “There are still major debts that need to be paid down and major imbalances in the global economies that need to be corrected.”

China’s 4 trillion yuan ($586 billion) stimulus package, coupled with record bank lending in 2009, helped the benchmark Shanghai Composite Index rally 80 percent last year. The gauge has dropped 6.4 percent in 2010.

“From a stock-picking perspective, we can find better opportunities” than China, he said. “The government pumped money into the financial system, but soon they’ll run out of money,” which will hurt the earnings of Chinese companies, he said.

Plans for initial public offerings in Brazil will probably push the nation’s stocks lower in the short term, as investors look to buy the new companies’ shares, Kaloo said.

“We’re positive about Brazil but we’re worried about valuations,” he said. “We see any short-term decline as an opportunity to buy.”

Brazilian stocks had their biggest annual rise in six years in 2009, surging 83 percent, as Latin America’s largest economy pulled out of a recession faster than most nations.

OSX, the shipbuilding and oil-services company controlled by Brazilian billionaire Eike Batista, may raise as much as 9.92 billion reais ($5.59 billion) in the country’s biggest IPO since October, according to a prospectus published on March 2 in the Brazilian newspaper Valor Economico.

–Editors: Eric Martin, Richard Frost

To contact the reporter on this story: Tal Barak Harif in New York at tbarak@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net.

http://www.cbsnews.com/video/watch/?id=6228923n&tag=contentMain;contentBody

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Large corporations have been testing a new device that can generate power on the spot, without being connected to the electric grid. Will we have one in every home someday? Lesley Stahl reports

http://www.wfaa.com/news/gasoline-84801677.html

ARLINGTON – How would you like to buy gasoline made from $30 domestic coal versus $75 imported oil?

Researchers at the Unviersity of Texas at Arlington say they’ve found a practical way to make synthetic crude from inexpensive coal that’s common in Texas.

People have been turning coal into oil for 100 years or more, but researchers at UTA say they’ve invented a better way to do it.

It is so much better that they expect to sign a deal with an oil company within weeks.

“This is East Texas lignite coal. We go from that to this really nice liquid,” said Professor Brian Dennis of a light synthetic crude, easily refined into gasoline.

Professor Dennis and a team of scientists have been working on the process for about a year-and-a-half.

“I had the idea for this while I was walking to my car,” he said. “I ran back to the lab and I started drawing it out in my notebook.”

They only showed News 8 an early model reactor which doesn’t look like much. The current reactor design is secret, extremely efficient, and emits no pollution, the UTA scientists said.

“We’re improving the cost every day. We started off sometime ago at an uneconomical $17,000 a barrel. Today, we’re at a cost of $28.84 a barrel,” said engineering dean Rick Billo.

That’s $28 a barrel versus $75 we pay now for imported crude.

Texas lignite coal is dirt cheap – less than $18 a ton. A ton of coal will produce up to 1.5 barrels of oil.

UTA researchers expect micro-refineries to be built within a year, turning coal into cheap oil and producing new jobs.

It’s still fossil fuel, but scientists say it could bridge the gap until greener technologies catch up.

E-mail jdouglas@wfaa.com