An interesting documentary on the big market crash of 1929:
Source: YourTube
An interesting documentary on the big market crash of 1929:
Source: YourTube
Doral Financial (DRL) was shutdown by the FDIC on Friday Feb 27th, 2014. It was one of the largest banks in Puerto Rico and struggled to survive for many years.Bank closures have declined substantially since the financial crisis and so far this year only four have failed according to data by the FDIC.
When its stock price plunged in the past, Doral implemented reverse stock splits two times. Obviously this did not help the bank but only helped delay the inevitable. On Friday after the news was released during market hours by the FDIC, the stock crashed by over 46% and Doral equity became worthless closing at $0.72 a share.
The following chart shows the dramatic life of Doral over the years:
Click to enlarge
Source: Google Finance
After closure, Doral was taken over by its competitor Popular, Inc. (BPOP) whose shares surged over 5% on Friday.
Disclosure: No Positions
Most of the infrastructure in the U.S. are in desperate need of an upgrade. Highways, bridges, water and sewer systems, electrical grid, railroads, etc. were built long time ago – some 50 years or more – and could use a makeover. The following is a summary of key points from a research report on the U.S. infrastructure by Christine Todd and Daniel Marques of Standish and my comments.
Click to enlarge
5. U.S. public spending on infrastrcure has dropped since the global financial crisis of 2008. It has dropped by 30% to reach a decades-low of -1.55%.
6. Globally U.S. infrastructure is rated very low when compared to other developed countries. In the past six years, the U.S. has dropped five spots to reach the 12th in the world.
7. The American Society of Civil Engineers(ASCE) gives a grade of D+ for the state of U.S. infrastructure.
It should be noted however that certain areas of infrastructure are good. For instance, toll roads are generally in good shape as private firms that build and operate these roads are able to invest and generate high revenues from them. Thats the case with public spending. Though primarily only two parties are in this democratic country, political fighting between them delays policy making decisions.As a result the general public suffers. Americans waste billions of hours each year sitting on traffic-clogged roads. Unlike the politicians in the past, nowadays every politician seems to lack a vision for the country and instead are selfish to the nth degree and is constantly thinking about holding on to power growing his/her own glory……
Source: Aging U.S. Infrastructure Drives Opportunity for Muni Bond Investors, Feb 15, Standish
Africa requires massive investments in power generation to meet its demand. According to an article by Dr.Mark Mobius the continent has only 7% of the power generating capacity of the U.S. This fact is astonishing since Africa is blessed with plenty of natural resources such as water, solar energy, oil, etc.
Click to enlarge
From the article:
Using per-capita data, a US citizen on average uses 12,461 kilowatt hours of electricity per annum; a citizen of Ethiopia uses 52. On average, only 30% of Sub-Saharan Africa citizens have any access to electric power,2 and even where power is available, provision can be sporadic, with frequent power cuts and “brown-outs.” One of my trips to Nigeria was enlivened by a power cut that unexpectedly left us stranded in the elevator at one of Lagos’s most prestigious hotels. For factories and hospitals, such interruptions can be more than inconveniencing.
If the challenge posed by Africa’s electric power deficit is monumental, so is the effort currently going into addressing the problem. Many of the most dramatic projects relate to harnessing the potential of Africa’s great rivers. Chinese firms utilizing skills built up during China’s program of dam building and electricity generating-plant expansion are prominent in many of the schemes. The Ethiopian government has been particularly active in this area, with major projects involving most of the rivers flowing through the country, headed by a plan to dam the Blue Nile that could potentially generate six gigawatts of power. Uganda, Mozambique and Ghana are also among countries that have major hydroelectric schemes under way or planned. But the largest of all is the Inga Falls Number Three project on the Congo River in the Democratic Republic of Congo, initially intended to generate 4.8 gigawatts, but with a potential ultimate generating capacity in excess of 40 gigawatts.3
2. Source: ©OECD/IEA, 2014, Africa Energy Outlook, A Focus on Energy Prospects in Sub-Saharan Africa, World Energy Outlook special report, IEA Publishing. Licence http://www.iea.org/t&c/termsandconditions/
3. Source: International Rivers.Org, Grand Inga Dam, DR Congo.
Source: Africa’s Electrifying Future, Jan 16, 2015, Mark Mobius, Franklin Templeton Investments
On Tuesday Feb 24th, UK’s benchmark Index the FTSE 100 closed at 6949.63 surpassing the peak it last reached 15 years ago during the dot-com boom. It took the index an astonishing decade and half to regain this level.
Click to enlarge
Source: As FTSE Hits a Record, Scratch Beneath the Surface, Moneybeat, The Wall Street Journal
Here are five interesting facts about the FTSE 100:
Click to enlarge
Sources:
After 15 Years, FTSE Climbs to a Record, The Wall Street Journal
FTSE 100 hits 15-year highs, but it’s no time to sell, MoneyWeek
Five How to play Footsie, FT Alphaville
Related ETF:
You can also check out the list of British ADRs trading on the US markets.
Disclosure: No Positions
Update:
Click to enlarge
Despite its wide acclaim, the FTSE 100 index has actually been a pretty poor performer over this 15 year time period. Most other major stock market indices such as the S&P 500 in the U.S. have outperformed the FTSE 100. The FTSE 250 index which consists of smaller market capitalisation companies has trounced the FTSE 100, rising nearly 170% over this period. Part of the underperformance of the FTSE 100 can be explained by its higher dividend yield, but even adjusting for this there is no getting away from the conclusion that the index has been a laggard.
Source: A tale of three sectors, Feb 24, 1015, Allianz
Updates: