Knowledge is Power: Cycling, Brazil Stocks, Global Auto Industry Edition

Posted by on

Emerging-Market Banks Threatened by End of Credit Boom (Bloomberg)

A look beyond the Twitter IPO finds rot beneath the gloss of recovery (The Guardian)

Brazil stocks undervalued, favoured for sound governance (The Asset)

Chile should continue strengthening growth and well-being, says OECD (OECD)

World’s Safest Emerging Markets Banks in Latin America 2013 (Global Finance)

Presentation: Economic and regulatory prospects for the global automotive industry (Deutsche Research)

Foreign Ownership of U.S. Assets (CFR)

Cycling v cars – The American right-of-way (The Economist)

Singapore-Sentosa-Island-Laser-Show

  • Sentosa Island Laser Show, Singapore

The Top Five Banks in Brazil Based on Tier 1 Capital

Posted by on

Banco Do Brasil is the largest bank in Brazil based on Tier 1 Capital according to a report in The Banker magazine. The table below shows the Top 5 Brazilian banks based on Tier 1 Capital:

Click to enlarge

Brazil-top-five-banks

Source: The Banker

Tier 1 capital shows the financial strength of a bank. So higher the number the stronger the bank.

Based in Brasilia, Banco Do Brasil (BDORY) was founded in 1808 and is one of the oldest banks in the world.The bank is state-owned. Currently the ADS pays a dividend of 9.57%.

Itau Unibanco Holding SA (ITUB),  Banco Bradesco SA (BBD) and Banco Santander Brasil SA (BSBR) have dividend yields of 2.95%, 2.80% and 3.80% respectively.

Note: Dividend yields noted are as of Nov 8, 2013. Data is known to be accurate from sources used.Please use your own due diligence before making any investment decisions.

Disclosure: Long ITUB and BBD

Knowledge is Power: Blackberry, Great Rotation, Foreign Holders Edition

Posted by on

Why BlackBerry failed (The Guardian)

Canada vs. U.S.: A tale of two stock markets (The Star)

Is now the ideal time to get back into emerging markets? (Trustnet)

World’s Safest Emerging Markets Banks in Central & Eastern Europe 2013 (Global Finance)

Bernstein Says ‘Great Rotation’ of Bonds to Stocks Flawed (Bloomberg)

From financial market deregulation to fragmentation: Ladies and gentlemen, you screwed up (OECD Insights)

What if foreign holders dumped U.S. Treasuries? (Canadian Investment Review)

Understanding Emerging Market Banks: A new eBook (Vox)

Do multinationals that expand abroad invest less at home? (Vox)

Malaysia-KL

 

Kuala Lumpur, Malaysia

Income Inequality Among Select Countries

Posted by on

The Gini index measures the degree of inequality in the distribution of family income in a country.The higher the Gini coefficient the higher the income inequality. According to the CIA’s The World Factbook the Scandinavian country of Sweden has the lowest Gini coefficient.The U.S. ranks 41st just behind its former colony of Philippines with a Gini of 45.

Among the developed countries, the U.S. has the highest income inequality between the top and bottom percent of the population. Various factors such as the political structure, form of economy, tax policies, culture, etc. contribute to this situation. The two-party democratic system with politicians selling out to the highest bidder makes the transfer of wealth from the lower section of the population to the elites easier on a daily basis.

The following chart shows the income inequality for select countries:

Click to Enlarge

Income-Inequality-Select-Countries

Source: Halloween: 5 frightful slides on the world economy, CityWire

The top 10% of the population owns over 70% of the wealth in the U.S. The bottom 50% owns less than 5% of the wealth. Extreme levels of income inequality where a few become filthy rich and the majority becomes dirt-poor having to eat grass or starve may lead to revolutions such as the French Revolution. Currently social safety nets such as Medicare, Medicaid, Food Stamps, etc. are keeping millions of Americans from  rising up.

Here are a few articles related to this topic:

Wealth, Income, and Power, by Professor by G. William Domhoff

Income Inequality Is the Enemy of Economic Growth: Robert Reich, Yahoo Finance

The Unequal States of America: a Reuters Series, Reuters

Income Inequality Is What’s Destroying America. Forbes

What is income inequality, anyway?, CNN

Inequality – Growing apart, The Economist

Robert Shiller: Income Inequality Is ‘Most Important Problem’, Huffington Post

It’s the Inequality, Stupid, Mother Jones

An interesting chart from the above Mother Jones article:

Income-Inequality-USA

 

Some Interesting Facts On Small Countries

Posted by on

There are about 200+ countries in the world. Some of them are small with small populations while others are tiny. Their population and economy size are not large enough to get international investors’ attention. In the latest edition of Finance & Development magazine published by the IMF I came across an interesting article on these small states.

The following are some of the notes from that article:

Click to enlarge

Small-Countries

Source: Finance & Development, September 2013,IMF

  • Some microstates such as the island of Seychelles in Asia are rich while others like Samoa, Micronesia are poor.
  • The Pacific island of Tuvalu has a land area of just 10 square miles which is about one-seventh the size of Washington, DC.
  • Kiribati has a population of just 100,000 spread over an area of about 3.5 million square kilometers of ocean or about the size of the Indian subcontinent.
  • The Pacific islands of Samoa and Palau are about as far apart as the east coast of the U.S. and England. This makes communication and trade difficult.
  • Most the small states depend on tourism, finance or export industries.
  • Nobel-prize winning economist James Meade predicted the island of Mauritius off the coast of Eastern Africa to be a failure in the 1960s due to its dependence on one commodity – sugar, lack of natural resources and high unemployment. The country proved Meade wrong by diversifying into tourism, finance, textiles, and advanced technology—as well as sugar to grow into a high income country. Mauritius has become an offshore tax haven for wealthy investors to channel funds into other Asian countries such as India, Indonesia, etc.