Below is an excerpt from the HCM Market Letter. I don't know if the whole thing is somewhere out on the internet or not. I really enjoy reading about connections to finance in the world outside of finance. I think about nature and games and science and thier principles in relation to finance. So I read this I found it very interesting and decided to put it out on the blog. I have not read the book.
In 2006, an American raised in France named Jonathan Littell published a near-1000 page novel in French entitled Les Bienveillantes. The novel tells the story of Dr. Maximilien Aue, a former Nazi officer who survived the horrors of World War II and reinvented himself as a lace manufacturer and family man in post-war France. Dr. Aue is a highly educated man, wellversed in literature, philosophy, music and the arts. He is also a serial killer, who before the end of the novel not only murders with his own hand but supervises and plays a role in the genocide of Jews, Gypsies, the mentally impaired and other groups deemed enemies of the Nazi regime. He is on the scene at many of the prime charnel houses of Europe, including Auschwitz. As you might imagine, Les Bienveillantes was highly controversial when it was published in France. It was awarded the prestigious Prix Goncourt but evoked both great praise and loud approbation for its depiction of a deeply twisted soul and a regime that engaged in acts so horrific that they remain fundamentally inexplicable to this day. HCM finds itself squarely in the camp of those who consider Mr. Littell’s novel a morally complex and deeply disturbing work of literature that deserves a great deal of praise despite its abhorrent subject matter. Mr. Littell’s novel forces readers to confront parts of the human soul that some may believe should best remain hidden, but concealing them is what allows evil to flourish unchecked in darkness until it bursts into the light and wreaks destruction.
The HCM Market Letter is not a literary journal. Les Bienveillantes, however, speaks to the current crisis in financial markets in ways that most reviewers of the book have completely ignored. While many critics have focused on the allusion to Greek mythology in the novel’s title11, HCM would read the title in a more colloquial manner. Dr. Aue was an order-follower, although he certainly exercised freedom of thought outside of his duties as a Nazi officer (he engages in virtually every sexual perversity known to man). Nazi Germany was filled with wellmeaning people who were completely lacking in moral courage or were trained to obey their government’s orders. The world is only different today in degree, not in kind; it is still filled with well-meaning people who follow orders but remain essentially oblivious to the consequences of their actions. It is a world of the complicit. In Nazi Germany, the consequences of such behavior were obviously horrific, and perhaps there was little opportunity to opt out without putting one’s life in danger. In today’s world, however, the consequences of such conduct are not as blatantly horrific; people are not being asked to murder fellow human beings. But that does not mean that what they are being asked to do is inconsequential.
Failure to speak truth to power, in whatever historical context, constitutes complicity with whatever form of evil lurks in a society. In modern Western societies, that evil most recently consisted of a form of economic capitalism that awarded speculation over production to an extent that rotted away the solid underpinnings of economic growth and opportunities for the disenfranchised. While this may not be as morally reprehensible as genocide, it remains morally reprehensible nonetheless. The consequences of the economic practices that caused the current crisis are real human pain and suffering in the present and long-term damage to society and the economy in the long run, which equates to genuine human suffering in the future. Shouldn’t we consider those who kept their mouths shut and simply participated in the process are as culpable in the context of their time as Dr. Aue was guilty in his? This is why Walter Benjamin, who committed suicide at the Franco-Spanish border in September 1940 rather than be taken by the
Nazis, wrote, “[o]nly that historian will have the gift of fanning the spark of hope in the past who is firmly convinced that even the dead will not be safe from the enemy if he wins. And the enemy has not ceased to be victorious.” As we work to reform the financial system, Mr. Benjamin’s cry from the depths of despair should drive us to make sure that we get the changes right. Had the world sunk into a real depression, we might have faced a conflagration that would have made the destruction of World War II look like a garden party in comparison. What each of us does every day as participants in the capitalist system makes a moral difference. Too many people forgot that and are already starting to forget that all over again.
One of the most searing features of Mr. Littell’s book is the portrayal of the toll that the commission of genocide exacted on the Nazi soldiers who were charged with carrying out the actual acts of torture and murder. In one way or another, this behavior dehumanized them. To a lesser but still tragic extent, participation in a corrupt capitalism warped the values and beliefs of many of the individuals in positions of power – CEOs, regulators, politicians, money managers, etc. It is a rare individual who can resist being influenced and changed by the madness of the crowds that surround him, yet it is those few individuals crying out against the mob that are the voices that need to be heard the most. It is not that the road to hell is built with good intentions or bad intentions – that road is built with human intentions. Mr. Littell’s masterpiece depicts those intentions in all of their terrible beauty and sounds a message for all men in all times.
Thursday, April 30, 2009
1st Quarter Letter
My first quarter letter is now sent out. If anyone is a reader of this blog and would like a copy, please let me know.
Wednesday, April 29, 2009
Bull vs Bear
I report - you decide.
Bull Case
* Broke key resistance at 870 to 875 in the S&P. Next stop 900.
* Personal consumption (a leading indicator) was up in the latest Q1 report. Demand is returning and the lagging indicators are the only thing flashing warning signs.
* Russell 2000 (small cap stocks) leading the way.
* Breadth continues to improve.
* Credit is now participating with the rally.
Bear Case
* Most overbought we have been since the markets top in October 2007
* The Personal consumption data is Q/Q annualized seasonally adjusted (a lot of room for measurement error and the comp was very easy). This is not popping up in the micro data. Retailer by retailer.
* Heaviest insider selling since October 2007
* Biggest rally since 1933.
* Transportation numbers are showing negative signs.
* XLF - the financial index not breaking out like the markets.
Bull Case
* Broke key resistance at 870 to 875 in the S&P. Next stop 900.
* Personal consumption (a leading indicator) was up in the latest Q1 report. Demand is returning and the lagging indicators are the only thing flashing warning signs.
* Russell 2000 (small cap stocks) leading the way.
* Breadth continues to improve.
* Credit is now participating with the rally.
Bear Case
* Most overbought we have been since the markets top in October 2007
* The Personal consumption data is Q/Q annualized seasonally adjusted (a lot of room for measurement error and the comp was very easy). This is not popping up in the micro data. Retailer by retailer.
* Heaviest insider selling since October 2007
* Biggest rally since 1933.
* Transportation numbers are showing negative signs.
* XLF - the financial index not breaking out like the markets.
Tuesday, April 28, 2009
U.S.A. - Another Emerging Market in Crises?
The Atlantic has a very interesting article from an individual who worked at the IMF and other emerging countries. I agree with most of his conclusions, especially the two scenarios at the end. Probabilistically I think the second scenario is more likely. Thanks goes to Caleb.
The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.
and
But there’s a deeper and more disturbing similarity: elite business interests—financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them.
and
To break this cycle, the government must force the banks to acknowledge the scale of their problems. As the IMF understands (and as the U.S. government itself has insisted to multiple emerging-market countries in the past), the most direct way to do this is nationalization. Instead, Treasury is trying to negotiate bailouts bank by bank, and behaving as if the banks hold all the cards—contorting the terms of each deal to minimize government ownership while forswearing government influence over bank strategy or operations. Under these conditions, cleaning up bank balance sheets is impossible.
The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.
and
But there’s a deeper and more disturbing similarity: elite business interests—financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them.
and
To break this cycle, the government must force the banks to acknowledge the scale of their problems. As the IMF understands (and as the U.S. government itself has insisted to multiple emerging-market countries in the past), the most direct way to do this is nationalization. Instead, Treasury is trying to negotiate bailouts bank by bank, and behaving as if the banks hold all the cards—contorting the terms of each deal to minimize government ownership while forswearing government influence over bank strategy or operations. Under these conditions, cleaning up bank balance sheets is impossible.
Vegas Return
I am back from Vegas. To avoid a mountain of emails I will give a quick recap. There were 8 guys who went. No occasion, just to go. We stayed in the Venetian but mostly gambled in the Mirage and the Bellagio. I am not much of a gambler but 5 of the 8 on the trip were hard core. I ended up winning 325 in hold em and losing 250 in black jack for a net win of 75. I was the only person on the trip to come home positive. One friend lost 1600 and another lost 2500. I would have rather gone out to shows or dancing but as mentioned the group was made up of gamblers.
My first trip to Vegas I did not like at all but have come to enjoy it from almost a case study perspective. The psychological forces of how people deal with money and react to winning and losing is displayed for all to see. Both times I have been amazed at my own internal emotional battle on being able to stop, psychology thoughts of winning back money, the rush of winning more etc etc. Being able to step back and truthfully do an introspective examination of your psychological and physiological reactions to gain and loss, greed and fear, has to be a large benefit to visiting Vegas. Of course the percentage of visitors who are willing to do this is probably low. Next time your in Vegas try it. After you lose 50% of your initial buy in at a black jack table what are you thinking? How are you feeling? What do your goals become? Does it change from being fun to just trying to get your money back? Do you react differently by putting 100 down but putting only 10 at risk and winning 10 versus putting 10 down and 10 at risk? How do you emotionally respond and how does the emotion represent itself to physiological reactions?
All these questions are key to investing. Not that investing is gambling. If done correctly investing is investing but if your emotions get in the way of logical diagnosis of the situation and doubling down when you shouldn't then your own body circumvents the investing framework by which you should be basing your various investment decisions on. I could talk alot more about this topic. It is a topic that fasinates me at a micro level (at the indivdual level) and at the macro level (investors as a whole). Great trip and I am glad I didn't lose my shirt.
My first trip to Vegas I did not like at all but have come to enjoy it from almost a case study perspective. The psychological forces of how people deal with money and react to winning and losing is displayed for all to see. Both times I have been amazed at my own internal emotional battle on being able to stop, psychology thoughts of winning back money, the rush of winning more etc etc. Being able to step back and truthfully do an introspective examination of your psychological and physiological reactions to gain and loss, greed and fear, has to be a large benefit to visiting Vegas. Of course the percentage of visitors who are willing to do this is probably low. Next time your in Vegas try it. After you lose 50% of your initial buy in at a black jack table what are you thinking? How are you feeling? What do your goals become? Does it change from being fun to just trying to get your money back? Do you react differently by putting 100 down but putting only 10 at risk and winning 10 versus putting 10 down and 10 at risk? How do you emotionally respond and how does the emotion represent itself to physiological reactions?
All these questions are key to investing. Not that investing is gambling. If done correctly investing is investing but if your emotions get in the way of logical diagnosis of the situation and doubling down when you shouldn't then your own body circumvents the investing framework by which you should be basing your various investment decisions on. I could talk alot more about this topic. It is a topic that fasinates me at a micro level (at the indivdual level) and at the macro level (investors as a whole). Great trip and I am glad I didn't lose my shirt.
Friday, April 24, 2009
Big BIG BIGGER!!! - China, buying gold
Even when in Vegas I keep in touch with the outside world. I think this is so big that I wanted to get this on my blog. China disclosed that it has been buying gold diversifying some of its reserves. What does this mean and not mean. This does not mean that gold is about to sky rocket (though it may). What it means is that there is starting to be a subtle shift in world central bank thinking on gold. These tremors, these shifts is what as investors you have to pay attention to. Moody's annoucement that it may cut Great Britian's credit rating was such an anoucement. To me it was lke a cannon went off even if it was subtle. Now the Pound plumetted against the dollar before regaining all of it back in 24 hours. No short term impact but it is sighns, signals tat can point you in the right direction as you try to determine what the world is going to look like over the next several years. This China thing is subtle but follow the money, follow the shifts.
From the Financial Times
China has quietly almost doubled its gold reserves to become the world’s fifth-biggest holder of the precious metal, it emerged on Friday, in a move that signals the revival of bullion after years of fading importance.
Gold rose to a three-week high of more than $910 an ounce after Hu Xiaolian, head of the secretive State Administration of Foreign Exchange, which manages the country’s $1,954bn in foreign exchange reserves, revealed China had 1,054 tonnes of gold, up from 600 tonnes in 2003.
The news could spark interest in gold among other central banks. “When the largest holder of foreign exchange reserves discloses an increase in gold holdings, other countries may decide to think more carefully about underweight gold positions,” said John Reade, a precious metals strategist at UBS.
The increase in China’s gold reserves has come primarily from domestic production and refining. However, the news raises questions about the future of Beijing’s foreign reserves policy.
and....of course Europe's central governments were making brilliant moves
China’s accumulation of gold has taken place as European central banks have gradually cut back back gold sales following a 1999 agreement to prevent the market from being flooded after prices were dragged sharply lower after the UK decided to sell part of its reserves.
“China’s announcement signals a broader shift in central banks’ attitude towards gold,” said Philip Klapwijk, chairman of GFMS, the precious metal consultancy.
and
Russia has being an active buyer, following Beijing’s similar pattern of purchases from local miners. China became last year the world’s largest producer of gold, outranking South Africa.
From the Financial Times
China has quietly almost doubled its gold reserves to become the world’s fifth-biggest holder of the precious metal, it emerged on Friday, in a move that signals the revival of bullion after years of fading importance.
Gold rose to a three-week high of more than $910 an ounce after Hu Xiaolian, head of the secretive State Administration of Foreign Exchange, which manages the country’s $1,954bn in foreign exchange reserves, revealed China had 1,054 tonnes of gold, up from 600 tonnes in 2003.
The news could spark interest in gold among other central banks. “When the largest holder of foreign exchange reserves discloses an increase in gold holdings, other countries may decide to think more carefully about underweight gold positions,” said John Reade, a precious metals strategist at UBS.
The increase in China’s gold reserves has come primarily from domestic production and refining. However, the news raises questions about the future of Beijing’s foreign reserves policy.
and....of course Europe's central governments were making brilliant moves
China’s accumulation of gold has taken place as European central banks have gradually cut back back gold sales following a 1999 agreement to prevent the market from being flooded after prices were dragged sharply lower after the UK decided to sell part of its reserves.
“China’s announcement signals a broader shift in central banks’ attitude towards gold,” said Philip Klapwijk, chairman of GFMS, the precious metal consultancy.
and
Russia has being an active buyer, following Beijing’s similar pattern of purchases from local miners. China became last year the world’s largest producer of gold, outranking South Africa.
I'm Off - Vegas Style
I'm off to Vegas this weekend. Hopefully play some Texas Hold Em tomorrow.
Barring a late day sell off to put us solidly under 860, the markets are fully controlled by the bulls. The lack of some sort of legitimate correction after this massive run up defies logic but the markets have never been about logic in the short term. Have a great weekend.
Barring a late day sell off to put us solidly under 860, the markets are fully controlled by the bulls. The lack of some sort of legitimate correction after this massive run up defies logic but the markets have never been about logic in the short term. Have a great weekend.
Thursday, April 23, 2009
World Issues
This could be big. From Bloomberg:
The pound and the euro fell against the dollar after the Telegraph newspaper said Moody’s Investors Service and Standard & Poor’s are reviewing the U.K.’s AAA credit rating on concern about the nation’s rising debt burden.
I have no idea how this will play out but this could dominate the world markets. S&P futures have dropped 6 points once this came out. Japan is down (not sure if it is because of this). The EURO is also down.
This will either kind of taper out or it could really pick up steam. Either way, it is another warning shot across the bow as Europe starts to slowly unravel. At some point it is likely to snap.
Another issue to glance at occassionaly is the Taliban push for Islamabad. This is not getting alot of press in the U.S. but it is overseas. I have been following it for a couple of weeks and it is to much to catch everyone up on now but if Taliban could overrun Islamabad, it could really throw the region in disaray which would have huge implications for India and Iran. From Al Jazeera:
Pakistan has deployed paramilitary troops to northwestern districts infiltrated by the local Taliban, after US officials expressed concern over the developments.
The move on Thursday coincided with reports that Taliban fighters were patrolling the streets of Buner, a district about 100km outside the capital, Islamabad.
and
Hillary Clinton, the US secretary of state, earlier said the Taliban advances posed an "existential threat" to the survival of Pakistan.
"I think the Pakistani government is basically abdicating to the Taliban and the extremists," she told congress members in a hearing in Washington on Wednesday.
The pound and the euro fell against the dollar after the Telegraph newspaper said Moody’s Investors Service and Standard & Poor’s are reviewing the U.K.’s AAA credit rating on concern about the nation’s rising debt burden.
I have no idea how this will play out but this could dominate the world markets. S&P futures have dropped 6 points once this came out. Japan is down (not sure if it is because of this). The EURO is also down.
This will either kind of taper out or it could really pick up steam. Either way, it is another warning shot across the bow as Europe starts to slowly unravel. At some point it is likely to snap.
Another issue to glance at occassionaly is the Taliban push for Islamabad. This is not getting alot of press in the U.S. but it is overseas. I have been following it for a couple of weeks and it is to much to catch everyone up on now but if Taliban could overrun Islamabad, it could really throw the region in disaray which would have huge implications for India and Iran. From Al Jazeera:
Pakistan has deployed paramilitary troops to northwestern districts infiltrated by the local Taliban, after US officials expressed concern over the developments.
The move on Thursday coincided with reports that Taliban fighters were patrolling the streets of Buner, a district about 100km outside the capital, Islamabad.
and
Hillary Clinton, the US secretary of state, earlier said the Taliban advances posed an "existential threat" to the survival of Pakistan.
"I think the Pakistani government is basically abdicating to the Taliban and the extremists," she told congress members in a hearing in Washington on Wednesday.
Jam Job
I try to not be a conspiracy theorist but some days it is very hard not to. Today was one of those days. At exactly 2:45 p.m. the S&P futures market started to go beserk. On my trading screen it immediately caught my eye that the way the futures were trading was not normal. It was off. It wasn't just the surge in volume, it was the way they were trading. 10,000 contracts going at a time. Futures were jumping in half points and integers as the ask was getting hit. The markets were getting jammed.
At the same time XLF (the financials ETF also went beserk). Look at the volume pick up in the graph below. WOW!!
So the question becomes why? What caused it? Was it a computer program? Was it orchestrated between banks and/or the government? Is there enough to cause follow through?
All day you got the sense after yesterday's failed rally that the bulls were getting frustrated. Today we had another rally and it faded and it looked like the market was going to roll over. Someone, somewhere drew the line in the sand and said no way. Not today and the ask on the futures started getting pounded driving up the market with it.
Tomorrow I think is a key day for the bulls and the bears and the bulls already have an advantage with Microsoft and Amazon up after hours. The bears must hold 860 and the bulls must hold 830. Anything in between in the short term is a punt to next week.
At the same time XLF (the financials ETF also went beserk). Look at the volume pick up in the graph below. WOW!!
So the question becomes why? What caused it? Was it a computer program? Was it orchestrated between banks and/or the government? Is there enough to cause follow through?
All day you got the sense after yesterday's failed rally that the bulls were getting frustrated. Today we had another rally and it faded and it looked like the market was going to roll over. Someone, somewhere drew the line in the sand and said no way. Not today and the ask on the futures started getting pounded driving up the market with it.
Tomorrow I think is a key day for the bulls and the bears and the bulls already have an advantage with Microsoft and Amazon up after hours. The bears must hold 860 and the bulls must hold 830. Anything in between in the short term is a punt to next week.
Europe: Big Problem For The Future
The WSJ had a must read article on Europe's grim outlook. It echoes things I have been saying for a long time. It is also why I think the next big leg down will have something to do with Europe but if I had to guess is probably a good three to nine months out. I could put the whole thing below, it is full of very good information.
European banks' losses from the global financial crisis are now projected to overtake U.S. banks' losses, according to IMF figures, which could hurt the banks' ability to lend liberally to help the bloc out of its crisis. More than half of the losses on continental Europe are homemade, the IMF said, reflecting bad loans to European firms and households rather than toxic U.S. securities.
The worsening outlook for the 27-nation EU is a blow for many of the region's governments, who have argued that the U.S. is the center of the global economic storm and that Europe's problems are smaller. Because of that, plus fear of rising inflation and public debt, authorities in much of Europe have been slower than those in the U.S. or leading Asian economies to cut interest rates or adopt ambitious fiscal-stimulus measures.
and
In a sign of such spillover, Peoria, Ill.-based equipment maker Caterpillar Inc. said its first-quarter sales to Europe fell 46% from a year ago, significantly more than its sales declines in the U.S., Asia or Latin America, as it announced a first-quarter loss on Tuesday.
and
In France, labor protests became more violent this week as workers stormed and ransacked a government building near Paris, after they failed in court to prevent the shutdown of their tire factory, owned by German auto-parts company Continental AG. German Trade Union Federation head Michael Sommer warned his country's industrialists this week that such social unrest could spread to Germany if mass layoffs multiply.
and
The weakening of Europe's banking sector is potentially more damaging for the wider economy than woes at U.S. banks, because Europe's financial system relies more on bank lending and less on securities markets. Although Europe's banks have bigger balance sheets than U.S. lenders, so that their losses are smaller as a proportion of total assets, they will need more fresh money than the U.S. to repair their capital buffers, the IMF said.
An IMF report published Tuesday said that write-downs at Western European banks outside the U.K. will total $1.109 trillion for 2007-2010, topping the U.S. total of $1.049 trillion. Banks in the euro zone have so far written down only 17% of their losses, compared with roughly 50% at U.S. banks, the IMF said. U.K. banks have written down about a third of their $310 billion in expected losses, the report said.
and
Europe's economy also faces a greater risk of further deterioration than other regions because of the deep economic and financial crisis in the formerly communist East. Austria-based banks, for example, have some $278 billion in exposure to those countries, equivalent to over 70% of Austria's gross domestic product.
The IMF expects Continental European banks' losses on emerging-market assets to reach $172 billion by 2010, more than four times the emerging-market losses it expects for U.K., U.S. or Asian banks.
European banks' losses from the global financial crisis are now projected to overtake U.S. banks' losses, according to IMF figures, which could hurt the banks' ability to lend liberally to help the bloc out of its crisis. More than half of the losses on continental Europe are homemade, the IMF said, reflecting bad loans to European firms and households rather than toxic U.S. securities.
The worsening outlook for the 27-nation EU is a blow for many of the region's governments, who have argued that the U.S. is the center of the global economic storm and that Europe's problems are smaller. Because of that, plus fear of rising inflation and public debt, authorities in much of Europe have been slower than those in the U.S. or leading Asian economies to cut interest rates or adopt ambitious fiscal-stimulus measures.
and
In a sign of such spillover, Peoria, Ill.-based equipment maker Caterpillar Inc. said its first-quarter sales to Europe fell 46% from a year ago, significantly more than its sales declines in the U.S., Asia or Latin America, as it announced a first-quarter loss on Tuesday.
and
In France, labor protests became more violent this week as workers stormed and ransacked a government building near Paris, after they failed in court to prevent the shutdown of their tire factory, owned by German auto-parts company Continental AG. German Trade Union Federation head Michael Sommer warned his country's industrialists this week that such social unrest could spread to Germany if mass layoffs multiply.
and
The weakening of Europe's banking sector is potentially more damaging for the wider economy than woes at U.S. banks, because Europe's financial system relies more on bank lending and less on securities markets. Although Europe's banks have bigger balance sheets than U.S. lenders, so that their losses are smaller as a proportion of total assets, they will need more fresh money than the U.S. to repair their capital buffers, the IMF said.
An IMF report published Tuesday said that write-downs at Western European banks outside the U.K. will total $1.109 trillion for 2007-2010, topping the U.S. total of $1.049 trillion. Banks in the euro zone have so far written down only 17% of their losses, compared with roughly 50% at U.S. banks, the IMF said. U.K. banks have written down about a third of their $310 billion in expected losses, the report said.
and
Europe's economy also faces a greater risk of further deterioration than other regions because of the deep economic and financial crisis in the formerly communist East. Austria-based banks, for example, have some $278 billion in exposure to those countries, equivalent to over 70% of Austria's gross domestic product.
The IMF expects Continental European banks' losses on emerging-market assets to reach $172 billion by 2010, more than four times the emerging-market losses it expects for U.K., U.S. or Asian banks.
Subscribe to:
Posts (Atom)
