Asian economies are recovering faster than previously thought and will lead the charge out of the worst global downturn since the 1930s, according to new forecasts by the Asian Development Bank (ADB) – a Manila-based institution that promotes economic and social progress in the Asia-Pacific region.

After slashing its forecast for the region in March, the ADB reversed course in its updated Asian Development Outlook (ADO) 2009. The bank said developing economies in Asia would grow by 3.9% this year, up from its previous forecast of 3.4%.

“Despite worsening conditions in the global economic environment, developing Asia is poised to lead the recovery from the worldwide slowdown,” said ADB Chief Economist Jong-Wha Lee.

However, the growth will not be evenly distributed. Economic growth in East Asia will be driven largely by China’s dynamic economy. But economic growth in Southeast Asia will be sluggish, because the recoveries of Vietnam and

...

By Simon van Norden

Today, we're fortunate to have Simon van Norden, Professor of Finance at HEC Montréal (École des Hautes Études Commerciales), as a guest blogger.

"Once you've seen one financial market crisis...you've seen one financial market crisis."

-- Attributed to Federal Reserve Board Governor Kevin Warsh by former US Treasury Assistant Secretary for Economic Policy Phillip Swagel in The Financial Crisis: an Inside View, March 2009, p. 4.

The financial crisis has set a lot of records so far; it's certainly the worst US banking crisis of my lifetime. Some, as suggested by the above quote, see such crises as unique events; each one is singular and there's not much to be learned about how to handle one from looking at past crises. For example, there's no precedent that I know of for a banking crisis involves the failure of the biggest counterparties for credit default swaps.

...

China’s economy grew by 7.9% in the second quarter, exceeding most analysts’ expectations, and lending credence to Beijing’s goal of 8% annual growth. Now, with the nation awash in liquidity and the economy picking up steam, the only task ahead of the central government is deciding when to rein in lending and let the economy stand on its own two feet.

The momentum behind China’s economy is staggering.

“China is increasingly becoming a responsible citizen in the global community,” economist Allen Sinai of Decision Economics told The Associated Press. “No longer lawless, no longer difficult to deal with, much more responsible. It is now a powerhouse among economies and finance. And it’s a rich country.”

In just the past few weeks, two of the world’s key global institutions – the World Bank and the Organization for Economic Cooperation and Development (OECD) – and a large swath of investment banks raised their 2009

...

Since Donald Coxe’s departure from BMO towards the end of last year, I have been inundated with enquiries about whether his much-revered “Basic Points” research reports would still be published. The good news is that Donald is planning on resuming these reports, and a new issue may very well appear later this month.

In the meantime, Donald has also resumed his weekly audio commentaries, which can be accessed by clicking here or on his image in the right-hand sidebar of this site.

The latest recording was made on February 6 (althought the webcast site incorrectly mentions January 30). A full transcript of this recording was produced and is shared with you in the paragraphs below (courtesy of Green

...

To ease the ongoing credit crisis and get banks lending again, the Obama administration realizes that it first has to resuscitate the “shadow financial system” that’s dominated by hedge funds and other large-scale private investors.

Surprisingly, two key ingredients of this turnaround formula will be structured investments, such as asset-backed securities, and leverage - the combination and poorly policed use of which acted as the accelerants that helped fuel the financial inferno that’s now sweeping the globe in wildfire fashion.

But the reality is that new U.S. Treasury Secretary Timothy F. Geithner probably realizes that he has little choice.

Nevertheless, there are problems throughout this plan, says Shah Gilani, a retired hedge fund manager and credit-crisis expert who is a contributing editor to Money Morning.

“Maybe I don’t get it because I’m not on the inside of the new Treasury fire-fighting team,” Gilani said. “But it strikes me that

...

In this article, we cite Merrill Lynch (MER), Bank of America (BAC), JP Morgan Chase (JPM), Citigroup (C), Wells Fargo (WFC), PNC Financial Services (PNC), Morgan Stanley (MS) and Goldman Sachs (GS).The banking landscape in the U.S. has changed drastically over the past fewmonths. At the beginning of the current year, three major banking acquisitions were completed. With the acquisition of Merrill Lynch (MER), Bank of America (BAC) has now become the largest bank in the country by assets, ahead of JP Morgan Chase (JPM), which had recently purchased Washington Mutual's banking operations, and Citigroup (C). At the same time, Wells Fargo (WFC) and PNC Financial Services (PNC) completed the acquisitions of Wachovia and National City respectively, and became the 4th and 5th largest banks in the country.Earlier, ...

h1 style="text-align: center;"bTop 3 Trendsbr //b/h1h2 style="text-align: center;"bTop 3 Prime Brokerage Trends/b/h2br /a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://www.mauronewmedia.com/images/ued/main-business-objectives.jpg"img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 228px; height: 162px;" src="http://www.mauronewmedia.com/images/ued/main-business-objectives.jpg" alt="" border="0" //aOver the last two years the mainstream media’s and general public’s interest in prime brokerage has rapidly grown. This is due to a number of factors including the struggle and failure many investment banks offering prime brokerage services including a alt="Lehman Prime Broker" href="http://primebrokerageguide.com/2008/05/lehman-prime-broker.html" title="Lehman Prime Broker"Lehman Brothers/a, mergers within the industry and widespread failures and redemption notices of hedge funds themselves.br /br /The top three trends affecting the prime brokerage industry right now are multi-prime brokerage relationships, limiting capital introduction services, and prime brokers acting as business partners to hedge fund managers.br /br /Multi-prime brokerage relationships used to be used by $5B+ a href="http://richard-wilson.blogspot.com/2008/03/hedge-funds.html"hedge funds/a whose large institutional clients demanded the practice as a risk ...

strongFinancial News/strongbr /br /Jason Corcoran in Moscow br /28 November 2008 br /br /br /Swedish fund manager East Capital has cut its personnel by a fifth following a 70% slide in its core equity market of Russia over the past two months.br /br /The 40 jobs cuts from East Capital's overall headcount of 225 indicate how the financial crisis in Russia is spreading from investment banks to the buyside. br /br /The Stockholm-based manager said 20 jobs in Sweden would be affected and the remainder in its international offices in Moscow and elsewhere in the CIS. br /br /A statement from East Capital said: "Like many others in these turbulent times, we are carrying out an organisational review…We need to adapt to the new reality."br /br /Hedge funds operating throughout Russia and the CIS are cutting their headcounts and slashing costs following sharp falls in equity prices and increases ...

You’ve seen hundreds of subprime lenders bite the dust, with New Century Financial and Countrywide leading the way … You’ve seen giant banks like Washington Mutual and Wachovia suffer a similar fate. You’ve watched in horror as major investment banks like Bear Stearns, Lehman Brothers and even the giant Merrill Lynch were bailed out, bought out or simply wiped out. Perhaps most shocking of all, you’ve seen the abject failure of the two biggest, supposedly “safest and soundest” mortgage companies on Earth — Fannie Mae and Freddie Mac. Each time news broke on these shocking failures, stock markets crashed — not just here in the U.S., but around the world. Investors lost trillions of dollars. Entire countries took another step closer to the edge of the abyss. Strangely, however, the crisis ...

There is so much chaff floating around about the roles of Fannie and Freddie and of the Community Reinvestment Act in the current crisis, despite the best efforts of economists like Jim Hamilton [0] [1], Mark Thoma and Janet Yellen, that it seems worthwhile to once again go through some of the arguments that have been forwarded.

From David Goldstein and Kevin G. Hall, "Private sector loans, not Fannie or Freddie, triggered crisis":

Federal Reserve Board data show that:

More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions. Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year. Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics. From David Goldstein and Kevin ...