Partial retreat from globalisation

RBS's shift towards its home market is a microcosm of what most banks are doing all over the world.

And as banks do their patriotic duty and direct their increasingly precious and scare capital resources towards their domestic markets, the amount of credit available in the world as a whole is being compressed.

What's going on can be seen as a partial retreat from globalisation in the financial economy.

The scale and longevity of that retreat in this new year will determine all our economic fortunes, wherever we may be in the world.

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2009/01/british_banks_have_to_lend_mor.html#top

Survey of Taxi Drivers on SMS booking

http://www.surveymonkey.com/s.aspx?sm=NvyTAfd_2faaNY1x3YRfEsWA_3d_3d

The mortgage crisis explained

http://clusterstock.alleyinsider.com/2009/1/the-mortgage-crisis-explained

Thought for the Day: study of history

Contributed by Ho Cheow Seng

"The study of history is a powerful antidote to contemporary arrogance. It is humbling to discover how many of our glib assumptions, which seem to us novel and plausible, have been tested before, not once but many times and in innumerable guises; and discovered to be, at great human cost, wholly false."
- Paul Johnson

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Market price understates the value of the shares

I invested in a REIT a few months ago at a dividend yield of 6%. The price has dropped by 50% during the past few months, due to the global financial crisis. The REIT now yields 12%.

During the economic recession, the rentals may fall. If it drops 50%, the REIT will still yield 3% based on my purchase price or 6% based on its current price for a new investor.

Eventually, the economy will recover and the rentals will go up. The price of the REIT will also go up.

There is little risk that the REIT will go bust, as it comprise of a few good, well managed properties. The borrowings are capped at a certain percentage (maybe 30%) of the value of the assets.

The current price represents the price that a distressed holder has to sell the shares and the lack of buyers. The price is low, compared to the intrinsic value of the assets and the rental income. According to the experts, the "valuation is attractive".

For a long term investor, the current prices are attractive. When the economy recovers, the price will run up rapidly and many investors will not be able to catch the low prices.

DJ:HK Regulator: Investigating All Minibond Distributors

31 Dec 2008
HONG KONG (Dow Jones)--Hong Kong's securities regulator said Wednesday it is investigating all distributors of the structured products, known as minibonds, that were backed by Lehman Brothers Holdings Inc. (LEH).

This is the first mention of an investigation by the Securities and Futures Commission into all distributors of the minibonds. Previously, it said it would investigate distributors of the products that it had received complaints against for mis-selling.

When Lehman filed for bankruptcy protection in September, thousands of Hong Kong investors in the minibonds, who thought their money would be safe, found out they faced huge losses.

A person familiar with the situation said the SFC's investigation now involves more than 20 local financial institutions.

An SFC spokesman, who asked not to be named, declined to comment, saying any comment may prejudice the integrity of the investigation or any action that may follow.