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Hidden Traps Make Bank Stocks a Bad Deal

Contrarian Profits — Tue, 06 Oct 2009 18:02:43 +0000

pBillionaire investor George Soros said yesterday (Monday) that the U.S. recovery would be a slow one because of all the “basically bankrupt” financial companies impeding it./p pU.S. Federal Reserve Chairman Ben S. Bernanke and Congress agreed Friday that the financial system – not the American taxpayer – should bear the costs of bank bailouts. a href="http://en.wikipedia.org/wiki/Sheila_C._Bair"Sheila Bair/a, head of the a href="http://www.google.com/finance?cid=14918074"Federal Deposit Insurance Corp/a. (FDIC), a href="http://www.moneymorning.com/2009/09/29/fdic-banks/"wants the banks to ante up $45 billion/a – three years’ worth of deposit-insurance premiums – to bail out the fund that insures bank deposits./p pWhen it comes to bank stocks, we all know that there were a number of strongema href="http://www.moneymorning.com" class="alinks_links"Money Morning/a/em/strong readers shrewd enough to buy Citigroup Inc. (NYSE: a href="http://www.google.com/finance?q=NYSE%3AC"C/a) shares when the foundering giant’s stock price was below#8230;/p

More on bank lending data

James Hamilton — Wed, 03 Jun 2009 02:01:19 +0000

Further evidence on the decline in bank lending.

Last week I highlighted the debate over the degree of the contraction in bank lending. Another issue that I neglected to mention is that the series on bank lending used by Chari, Christiano and Kehoe referred only to lending by commercial banks. When assets of failed thrifts are acquired by commercial banks, the result is that the measured loans by commercial banks go up even though aggregate lending may have gone down.

Zach Pandl of Nomura Securities calls my attention to their analysis which constructs a series that tries to correct for these reclassifications. Nomura found that these corrections eliminate the increase in bank lending that one would otherwise see in the original commercial bank lending data.

Source: Global Weekly Economic Monitor, courtesy of Nomura Research.

Technorati Tags: macroeconomics, economics, Federal Reserve, credit crunch

Plummeting Retail Sales in April Bury Economic “Green Shoots”

Don Miller — Thu, 14 May 2009 13:00:12 +0000

pThose elusive “green shoots” that economic optimists had been digging up lately were buried under disappointing data from the Commerce Department in Washington yesterday (Wednesday) when it was revealed that retail sales in the unexpectedly dropped in April. /p pSales at U.S. retailers dropped 0.4%, the eighth monthly decline in the last 10 months, following a revised 1.3% drop in March that was larger than previously estimated. Excluding auto dealers, sales fell 0.5%/p pEconomists had expected an increase of 0.5% to 1.0%. Since July, retail sales have shown increases only in January and February, and those were attributed to post-holiday sales./p pThe disappointing numbers indicate surging unemployment and the worst housing market in decades could temper consumers’ appetite for spending for years, analysts#8230;/p

Nomura Securties on UAE’s property sector

Jason G. Wulterkens — Fri, 20 Feb 2009 01:50:01 +0000

Property prices in the UAE will likely drop by another 15% (adding to the 25% decrease in the fourth quarter of 2008), according to a report issued by Nomura Securities, an investment bank. “The property sector is maturing at breakneck speed and a shakeout will see more casualties, with this year marked by [...]

Why the Federal Reserve Can’t Save the Dollar

Money Morning — Sat, 06 Dec 2008 18:56:43 +0000

Since Ben Bernanke touted the dollar’s muscle in 2002, the greenback has fallen 40% against world currencies. This free report reveals what’s next for the greenback and four ways you can... Money Morning is here to help investors profit ha...

Japanese Stock Indexes See Large Turnover

IndexUniverse Staff — Tue, 02 Dec 2008 02:13:33 +0000

State Street Global Advisors' SDPRs offer the only two Japanese equity ETFs based on this index series.

The annual rebalancing of the Russell/Nomura Japanese stock indexes just concluded, resulting in more than 30% turnover rates for each series in the benchmarking family.

The Russell/Nomura Total Value Index had 212 deletions and 176 additions, while the Russell/Nomura Total Growth Index had 270 deletions and 136 additions.

Those changes represented capitalization turnover ratios of 30.9% for value, and 33.3% for growth, among the highest-ever index rebalancing for the Russell Investments and Nomura Securities' Japanese equity benchmarks since their launch in 1981.

There are Japanese stock exchange-traded funds from Barclays Global Investors' iShares family, Northern Trust's NETS and from WisdomTree Investments.

However, State Street Global Advisors' SDPRs offers the only two Japanese equity ETFs based on this index series: the SPDR Russell/Nomura PRIME Japan ETF (NYSE Arca: JPP) and the Russell/Nomura Small Cap Japan ETF (NYSE Arca: JSC).

JPP and JSC are relatively small ETFs in terms of assets. JSC had close to $73 million in assets through last month while JPP had only $13.5 million.

Among all single-country international ETFs this year, those focused on Japan have held up relatively well in terms of performance. JPP was down 32.15% heading into Monday, while JSC had dropped 23.99% so far in 2008, according to Morningstar data.

That may not seem like impressive performance on the surface, but consider that the broad-based iShares MSCI EAFE Index (NYSE: EFA) for developed international markets has slid more than 45% this year.

The Russell/Nomura Prime Index, which is JPP's index, measures the performance of Japan's top 1,000 float-adjusted stocks. This year, 26 companies came into the Prime Index for the first time and its total market capitalization decreased from 201 trillion yen to 200 trillion yen (as of Oct. 15).

The turnover ratio of the index was 1.6%, which is relatively low compared to previous years, the companies said in a statement.

The number of stocks in the Russell/Nomura Small Cap Index, JSC's underlying index, dropped by 76 companies to 1,100. The small-cap index represents the top 85% and bottom 15% of the Russell/Nomura Japan Equity Index, on a market capitalization basis.

The decrease in JSC's index reflected the larger decline in the capitalization of small-cap companies relative to the overall market decrease.

Japan Officially Enters Recession as Exports Lose Steam

Money Morning — Mon, 17 Nov 2008 19:24:14 +0000

By Jason Simpkins Associate Editor Money Morning Japan, the world’s second largest economy, officially entered into a recession in the third quarter, as growth shrank at an ... Money Morning is here to help investors profit handsomely ...

How to Profit From the Emerging Markets Investment Banking Boom

Martin Hutchinson — Wed, 20 Aug 2008 22:00:00 +0000

By Martin Hutchinson Contributing Editor Emerging markets are the place for investment bankers to wheel and deal during the next couple of years, as bankers in Asia, the Middle East and Latin... Money Morning is here to help investors profit ha...