Research, reports and other stuff

**doctorj** · 13th-February-2009 10:04 PM

Credit Suisse's Global Investment Returns Yearbook 2009.

In it, CS discover that if you're timeframe is atleast 108 years, inflation and growth will ensure you make a profit on your equity portfolio (amongst other equally revolutionary ideas).

Toot toot!

**doctorj** · 13th-February-2009 10:08 PM

John Taylor - Author of the Taylor Rule.

Taylor asks the question what went wrong and modestly answers it by showing that had central banks followed HIS RULE, everything would have been hunky dory.

**doctorj** · 13th-February-2009 10:10 PM

Fitch puts out some of the best Emerging Market stuff IMHO. Anyone with an interest in the region should find something interesting.

**doctorj** · 13th-February-2009 10:12 PM

UBS - Economic Insights - By George

Financial instability, and the final countdown? More capital, bad banks and, where necessary, nationalisation

**doctorj** · 13th-February-2009 10:40 PM

Deutsche Bank - Bretton Woods II , protectionism and global economic activity.

**doctorj** · 13th-February-2009 10:47 PM

Credit Suisse put out a more meaty companion to the year book, posted earlier.

**doctorj** · 13th-February-2009 10:49 PM

One that's relavent to most here - Citibank asks if miners have found a base?

**doctorj** · 13th-February-2009 10:50 PM

UBS' quants look at what would happen if all FTSE companies cut dividends.

**doctorj** · 14th-February-2009 02:41 AM

A very witty, easy read from the Bank of England. One of the best pieces I've read about how the banks failed.

**doctorj** · 14th-February-2009 02:45 AM

You (probably) read it here first - it looks like the tide may be about to go out on another Ponzi scheme (a'la Madoff). This time it's a Caribbean bank owned by a rich Texan famous for sponsoring a $20 million winner-takes-all game of 20/20 Cricket.

£8 bill of assets...

The financial press is just starting to get wind of this, but here's the original article that started it all published in Venezuala.

**doctorj** · 17th-February-2009 12:40 AM

JP Morgan's FX market weekly

**kennas** · 17th-February-2009 07:43 AM

Thanks doctorj, some good reading there. kennas

**mattlaw** · 17th-February-2009 09:24 AM

Thanks Doctorj, keep up the good work. Much appreciated.

**doctorj** · 17th-February-2009 11:17 PM

Interesting comparison. I wonder where things sit a month or so later?

**doctorj** · 17th-February-2009 11:31 PM

It looks like the next evolution of the crisis will be bank's exposure to emerging markets through their subsidiaries. Moody's released a note this morning (attached) warning of it and since then Unicredit CDS increased to over 200bps.

Most banks with large exposures to emerging markets have been downgraded by S&P and remain on a negative outlook (eg. Raiffeisen, Unicredit & SocGen). Austria’s finance minister warned of the risk of an economic “catastrophe” in Ukraine triggering a “domino effect” of problems further west (rightly so - the Austrian banking sector is both highly exposed to emerging markets - 70% of assets - and highly leveraged). Just a 10% increase in the default rate in emerging markets would result in the failure of many Austrian banks.

Other Western countries with large exposures to emerging market banks are Spain (South America), Italy (Eastern Europe), Sweden (Baltics). A useful chart is attached to demonstrate.

What does this mean for ASX investors? Potentially the end of the "BR" in BRIC as the driver for... well... everything.

**doctorj** · 18th-February-2009 01:33 AM

Originally Posted by doctorj

It looks like the next evolution of the crisis will be bank's exposure to emerging markets through their subsidiaries.

Some more fun facts along this train of thought...

–80% of Hungarian mortgages in CHF, Forint down 32% against CHF
–60% of Polish mortgages in CHF, Zloty down ~50% against CHF
–There's a similar pattern in Croatia, Romania and much of eastern Europe.

CHF was the 2nd largest 'carry trade' behind everyone's favourite, the Yen.

Oh and further to my comment's about Ukraine (below), their Finance Minister resigned recently after the parliament passed a budget for 2009 that violated the covenants of the IMF's $16.4bn bail out package. Unless something changes, the second tranche of the package is dead in the water. Austria are very right to be very worried.

Eastern Europe has to roll ~US$400bn of foreign debt this year (1/3 of the region's GDP).

**doctorj** · 18th-February-2009 04:23 AM

Originally Posted by doctorj

You (probably) read it here first - it looks like the tide may be about to go out on another Ponzi scheme (a'la Madoff). This time it's a Caribbean bank owned by a rich Texan famous for sponsoring a $20 million winner-takes-all game of 20/20 Cricket.

To follow up - this just came through a few minutes ago.

SEC charges Stanford with fraud
The Securities and Exchange Commission on Tuesday charged Sir Robert Allen Stanford, the billionaire Texan businessmen, of a "massive, ongoing fraud" through his Antigua-based offshore bank.
Stanford International Bank, located in St John’s on the Caribbean island of Antigua, has been the focal point of much controversy in recent weeks, sparked in part by an analyst note that was highly critical of the bank’s apparent ability to deliver consistently and significantly market beating returns on its $8.5bn portfolio of depositors’ assets.
SIB had been the subject of a joint investigation
by the SEC, Finra, Florida Office of Financial Regulation and the FBI.
A spokesman for the bank did not return calls seeking comment.

Read more: http://www.ft.com/cms/s/0/7b159fda-f...077b07658.html

**prawn_86** · 18th-February-2009 08:12 AM

Originally Posted by doctorj

To follow up - this just came through a few minutes ago.

Read more: http://www.ft.com/cms/s/0/7b159fda-f...077b07658.html[/SIZE]

Well done Doc, your on the ball

Now to find time to actually read all these in detail....

**doctorj** · 18th-February-2009 09:09 PM

This is from the Financial Times. The top line shows Stanford's alleged returns (interest on deposits) and the bottom shows the returns on the Dow.

**doctorj** · 18th-February-2009 11:20 PM

"Alt A" mortgages the next wave.

The sums involved are depressingly large. In the worst case, losses on the $600 billion of securitised Alt-A debt outstanding—roughly the same as the stock of subprime securities—could reach $150 billion, reckons David Watts of CreditSights, a research firm. Analysts at Goldman Sachs put possible write-downs on the $1.3 trillion of total Alt-A debt—including both securitised and unsecuritised loans—at $600 billion, almost as much as expected subprime losses. Add in option ARMs, a particularly virulent type of adjustable-rate loan, many of which are essentially the same as Alt-A, and the potential hit climbs towards $1 trillion.

http://www.economist.com/daily/news/...ry_id=13061713