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You Loved the BRICS. You Feared the PIIGS. Now Prepare for the MIST.

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In 2001, Goldman Sachs analyst and foreign exchange expert Jim O’Neill wrote a paper that redefined international finance. It was called “The World Needs Better Economic BRICs,” and it didn’t just change the way a lot of people thought about the economic future of the planet -- it helped shape that future.

In a move that was as much sharp marketing as it was insightful analysis, O’Neill grouped together a handful of future global superstars (Brazil, Russia, India, and China) that will, by the middle of this century, have outstripped the G7 economies.

Now O’Neill, currently chairman of Goldman Sachs Asset Management, has kicked off the new decade with another potentially game-changing acronym: MIST, representing Mexico, Indonesia, South Korea and Turkey -- the next tier of emerging markets.

Critics of the BRIC concept are legion – they call it an empty premise, a tenuous linkage of four very different entities – but nonetheless, it was a powerful tool, one that – as Sreeram Chaulia points out in Asia Times “helped channel enormous sums of capital into its constituent countries at a time when interest rates were low globally and money managers were on the look-out for higher yielding destinations in Asia. BRIC countries themselves seized upon O'Neill's phrase and engaged in their own BRIC heads-of-state summits, BRIC investment forums, and BRIC academic seminars to cash in on the euphoria.”

The connections between, say, Turkey and South Korea are even more tenuous than those of Brazil and India -- MIST is “obviously more vapid and perhaps lacking the solidity of its BRIC antecedent,” says the Guardian. But “still, all four have in common a number of factors: a large population and market, a big economy at about 1% of global GDP each, and all are members of the G20.” So go ahead, try some kimchi with your doner kebab.

Will it catch on? BRIC (Now BRICS since the recent addition of South Africa to the grouping) has proved lasting, and ultimately useful, helping investors and analysts envision and work towards the multi-polar world of 2050. Acronyms are often lazy shorthand, but they do help fix a concept in the mind of even the most goldfish-brained market maven. Sometimes that’s bad for the countries involved: PIIGS, as derogatory as the Portuguese, Irish, Italian and Greek economies included under that inglorious banner find the term, isn’t going away anytime soon. MIST is, perhaps, a slightly cynical sequel to BRIC -- more Electric Boogaloo than Godfather II -- but if it takes off, it’ll be good news for Mexicans, Indonesians, South Koreans, and Turks alike. Not to mention O’Neill.
POSITION:  No positions in stocks mentioned.