A Build America ETF and Why New Zealand Can Speak Freely

Nov.13.09 | About: WisdomTree Australian (AUNZ)

New Zealand Prime Minister John Key was on CNBC Asia Friday morning giving a lengthy and very candid interview. He talked about the run up in the kiwi dollar and how it would be helpful for it to correct the other way. He spelled out specific opinions about economics in other countries in the region including the idea that it will not be a bad thing for various countries, including China, to let their currencies rise.

The interview was very refreshing because Key spoke plainly and directly to the questions asked, including tough ones about the currency and taxation. Compare this to when officials from the US or other big or medium sized countries speak.

I believe what allows Key to be so frank is that the country is so small, has so few moving parts and a sneeze by a kiwi official won't send all global markets reeling. While this could cause the occasional hiccup, it would seem to me that a country could be well served by not having to try to interpret what the meaning of is is, if you know what I mean.

On another note, PowerShares will be launching an ETF comprised of build America bonds. These are interesting issues. They are taxable municipal bonds with the feds kicking in to "make up the difference" to make the yields competitive with regular taxable paper. I find this segment to be very interesting, but any of the issues I have seen have been very long dated. Barron's has talked about yields in the sevens, which sounds pretty good, but in looking at Schwab's inventory I never saw any with that kind of yield. If those yields do exist then perhaps they will be captured in the ETF. It will have ticker symbol BAB and should be out on November 17th.

One last little item is that Australian retailer Kathmandu IPO'd on the Australian Stock Exchange Friday with ticker symbol KMD. At some point, maybe in a couple of months, it will be assigned a five letter designator for US trading. We were in a Kathmandu in Auckland a few years ago. It is kind of like an REI (the one in Auckland was enormous), and assuming the company is sound (can't vouch for that one way or the other) then it stands to be a decent proxy for discretionary spending in the antipodes.