Friday, May 11, 2012


Graham Summers, Chief Market Strategist at Phoenix Capital Research came up with with this interesting chart in his Gains Pains and Capital Newsletter on May 5, 2012.

Here are some more details of the Spanish Banking System in his Newsletter,

Spain is about to enter a full-scale Crisis.
 A few facts about Spain:
 *    Total Spanish banking loans are equal to 170% of Spanish GDP.
 *    Troubled loans at Spanish Banks just hit an 18-year high.
 *    Spanish Banks are drawing a record €316.3 billion from the ECB (up from €169.2 billion in February).

Overall, I remain wary of news that the situation over there is improving. Unlike its smaller neighbours like Greece, Spain is a large economy whose stability is important for the long term survival of the EURO.

Watch this space!

Monday, May 7, 2012

Indian Banking - Cases of Debt Recasts and NPAs

Here is a Newspaper Article on  "Rising cases of debt recasts & NPAs" by Abhijit Lele & Ranju Sarkar, from the Business Standard Newspaper in Mumbai.

Rising cases of debt recasts & NPAs ( check out the graphics pdf for charts and more info)
I've also attached adcanned copy of the article below

As some over leveraged companies work their way out of some rather sticky situations, it's another reminder to investors to check exactly how leveraged some of the companies they invest in really are.

High interest rates in India coupled with the reluctance of the inflation battling "Reserve Bank of India", the country's Central bank to lower interest rates; will mean that we could be in for some more restructuring of NPAs going forward.

Saturday, May 5, 2012


The ever articulate David Rosenberg has continuously maintained that the Great Recession of 2008, was no garden variety recession.

 According to him a combination of deleveraging, demographics and deflation  - the result of a post credit bubble collapse has meant that despite record stimulus packages and accounting rule changes and Central Bank Balance Sheet expansion; we are still a long way from an end to the crisis.

The Charts below clearly demonstrate how the stock prices of large multinational banks have fared during the post bubble bust scenario. 

As worries of the debt crisis in Europe continue unabated and market watchers are eagerly hoping for a QE3 to boost global equities; it's quite clear from the stock prices below that the crisis is far from over.

Canadian Banks dominate World's 10 Strongest Banks

Canadians Dominate World's 10 Strongest Banks
This is a Bloomberg link that makes for an interesting read.

For readers in Asia, we tend to be more familiar with the 'Too Big To Fail' American and European Banks. These include the likes of JP Morgan, Deutsche Bank, Bank of America etc.

However, prudent risk management, conservative lending policies and a strict regulatory policy have enabled Canadian Banks to grow even as Banks elsewhere struggled post 2008.

"CIBC (CM) was No. 3 in Bloomberg Markets’ second annual ranking of the world’s strongest banks, followed by three of its Canadian rivals: Toronto-Dominion Bank (TD) (No. 4), National Bank of Canada (NA) (No. 5) and Royal Bank of Canada (No. 6), the country’s largest lender. Bank of Nova Scotia ranked 18th, and Bank of Montreal was 22nd. "

The Canadian Dollar (CAD) too has been a currency that has outperformed over the last decade.
A stable Banking System and global investors searching for higher yielding currencies have contributed to the outperformance in the CAD.

Wednesday, May 2, 2012


Here’s what we do know about student loan debt: it’s roughly $1 trillion in size, greater than either auto or credit-card debt and second only to mortgage debt in the U.S.

Here are a few more links:

Well it's not getting a lot of coverage in the International Business Media (thanks to the Eurozone Debt Crisis perhaps), but  even CNBC has set up a page for it now.

Watch this space. A weak US job market  ( especially unemployed/underemployed graduates) will only add to the woes of US Student Loan Debt - Lenders!