We thought we had it all figured out before this week started.
We were wrong.
The top minds in the investment business offered some novel analysis, broke conventional wisdom, and even opened our eyes to some misperceptions.
This particular week, we learned there may be a simple explanation why the Baltic Dry Index is getting crushed, 2013 may be the real year to be worried about, and that one fact refutes the idea of a Chinese real estate bubble.
What follows are excerpts from such stories this week. All of the important stuff you might have missed this week, right here.
Fast food may be the best way to play the Chinese infrastructure boom
"US Global Investors CEO Frank Holmes made the case that the huge beneficiaries of China's infrastructure boom would be the various retailers and restaurants that popped up alongside. As he noted, Dairy Queen was a creation of the US highway spending boom. So in China, countries like Yum, Starbucks, and McDonald's could be big winners."
The Baltic Dry Index is impacted by more than the macro economy
"Market guru Ed Yardeni recently addressed this with The Globe And Mail's David Parkinson. A few years ago, there was a big shortage of these large ships, and the [Baltic Dry] Index soared...The response to the soaring freight prices was for shipping companies to order new vessels from shipbuilders – orders that were placed before the 2008-09 recession that hammered shipping rates. But because of the lengthy manufacturing cycle for large freighters, many of those ships are only now being delivered. Now, we have a glut of capacity for these commodities."
European banks may soon have to write down $100 billion worth of bad shipping loans
"...Basil Karatzas, the chief executive of Karatzas Marine Advisors, a ship brokerage and finance advisory firm in Manhattan, estimated that European banks hold about $500 billion in shipping loans on their books and face nearly $100 billion in losses to restructure them..."
See the rest of the story at Business Insider
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See Also:
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