Enterprising Investor Forum

Taleb on Unwinding Wednesday, July 15, 2009

Some classic Taleb – he always has very interesting views. Love him or hate him, you can’t argue with a lot of the basic facts he highlights to support his arguments:

Enjoy!

Mike Mayo is Back! Monday, April 6, 2009

Mike Mayo is back and he is still exposing the weaknesses of the banks and the troubles they are facing.

He  initiated coverage of 11 large banks and gave all of them “underperform” or “sell” ratings – here are some of his calls:

• Bank of America – underperform
• Citigroup Inc – underperform
• JPMorgan Chase – underperform
• Comerica Inc – underperform
• Wells Fargo & Co-  underperform
• BB&T Corp – sell
• Fifth Third Bancorp – sell
• KeyCorp – sell
• SunTrust Banks Inc – sell

As you can imagine, he is not very optimistic and focuses on his belief that loan losses will eventually be bigger than those we had at the time of the Great Depression.

With earning season coming up and what are definitely not going to be pretty numbers, investors should prepare themselves for some sideways trading ranges that could be pushed decisively lower on further bad news.

Eastern Europe about to go Bust? Tuesday, March 10, 2009

Some of this might be a bit controversial but all in all, it is quite interesting. As always, it is important to listen to different points of view…

Some key points:

• It appears that Eastern Europe has borrowed $1.7 trillion abroad, much on short-term maturities. It must repay or roll over $400bn this year, equal to a third of the region’s GDP… the credit window has slammed shut.
• In Poland, 60pc of mortgages are in Swiss francs. The zloty has just halved against the franc. Hungary, the Balkans, the Baltics, and Ukraine are all suffering variants of this story.
• Almost all East bloc debts are owed to West Europe, especially Austrian, Swedish, Greek, Italian, and Belgian banks. En plus, Europeans account for an astonishing 74pc of the entire $4.9 trillion portfolio of loans to emerging markets.
• They are five times more exposed to this latest bust than American or Japanese banks, and they are 50pc more leveraged (IMF data).
• and a lot more…

Enjoy!