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Caiman Valores  

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  • Banco Santander: Paying The Price For Its Association With Spain [View article]
    There are a lot of factors to play out before we even see Italian bonds yielding anywhere near that level, despite the problems being faced by Spain sovereign bond yields were not facing that type of yield. In addition, I don't think it is accurate to use Bear Sterns as an example of the worst case scenario that Banco Santander could face, the circumstances, risks, likelihoods and impacts are substantially different. In addition, we have already seen the effect that a big European bank nearing collapse has had on Banco Santander, in fact it was the entire banking system of one country albeit over the short-term. But even over the medium term the effect will be muted as the key issue over that time period is the lost profitability from markets such as Spain due to their economic situation. While I am certainly bullish on Banco Santander it is every investors prerogative to conduct their own due diligence and form their own view in accordance with their risk appetite. I am just trying to assist in making that an informed decision.
    Jun 16, 2012. 10:59 AM | Likes Like |Link to Comment
  • Banco Santander: Paying The Price For Its Association With Spain [View article]
    Deepvalue thank you for the compliment. I would be interested in understanding the counter party risk to which you refer? The overall risk, as I understand it, and as a result of Banco Santander's exposure to European sovereign debt is the risk of the issuing country, which is also the counter party, defaulting partially or totally. Any hedging position is carried as a cost to managing that exposure.
    Jun 16, 2012. 10:38 AM | Likes Like |Link to Comment
  • Banco Santander: Paying The Price For Its Association With Spain [View article]
    DeepValue I have set out Banco Santander's exposure to European sovereign debt in the article. I would also point out that the Spanish banking crisis is very different to the sub-prime crisis that affected the companies to which you refer. If anything Banco Santander's sovereign debt exposure in light of the issues currently being played out in Europe is concerning. But it is certainly manageable particularly when it is considered that its exposure to Greek sovereign debt, which is the country most likely to default is minor and there is a substantial way to go before we even start contemplating a Spanish or Italian default.
    Jun 16, 2012. 10:23 AM | Likes Like |Link to Comment
  • Banco Santander: Paying The Price For Its Association With Spain [View article]
    Deepvalue I don't believe that Pepe is referring to anything on that scale. Besides that it would seem somewhat incredulous and alarmist to argue that Banco Santander is another Enron or Madoff investment scheme. It is predominantly a retail bank that operates in a number of heavily regulated banking markets and to date has successfully met all of its regulatory requirements including capital requirements. It also was one of the very few Spanish banks along with BBVA and Caixabank that was found by the independent auditors to not require any of the Spanish banking bailout funds. If you refer to jedku's comment above you will find the link to that article. Overall Banco Santander is exceptional well positioned and my only concern is that the profitability of its Spanish and other European operations will be affected for sometime yet by the ongoing European financial crisis. Interestingly other banking regulators, including the notoriously hard to please U.K FSA, have also not found any problems with Banco Santander.
    Jun 15, 2012. 08:34 PM | 2 Likes Like |Link to Comment
  • Voluntarily Entering The (Iron) Maiden Lane [View instapost]
    I certainly smirked when I read this, nice instablog. I agree it seems as if destiny is set to repeat itself. However, if the underlying assets are of the appropriate quality and correct credit risk and other risk management principles have been adhered to and correctly executed when assessing the loans and the quality of the underlying assets then there shouldn't be a problem. But as the sub-prime crisis showed risk management and quality control are the last thing on a banker's mind when there are sales to be made.
    Jun 15, 2012. 07:48 PM | Likes Like |Link to Comment
  • Banco Santander: Paying The Price For Its Association With Spain [View article]
    Pepe can you confim and provide evidence that they are specifically investigating Banco Santander and if so on what basis and the extent of the allegations? While I appreciate the additional insight that you have brought to the discussion it is significantly different from the other information that is available and the views of the majority of other analysts. Furthermore, if such clear cut evidence exists I am certain that it would have already been uncovered and reported publicly by the financial media. Therefore, at this time what you are presenting is little more than private speculation. However, both myself and my readers would be quite interested to read any further concrete information that you can provide on these allegations and suppositions.
    Jun 15, 2012. 09:03 AM | Likes Like |Link to Comment
  • Banco Santander: Paying The Price For Its Association With Spain [View article]
    Pepe thank you for the link. However, I haven't found any evidence at this time that Banco Santander has hidden the true extent of their exposure to toxic property loans as have some of the other Spanish banks. Furthermore, the article while raising some interesting and worrying points is also fast and loose with the facts and doesn't present any evidence that Banco Santander or any other Spanish bank has incorrectly reported their financial state.
    Jun 15, 2012. 07:43 AM | Likes Like |Link to Comment
  • The Stock Market And Chess: How The Game Works And Who Is Moving The Pieces [View article]
    Thank you Husky I should have perhaps added more context to my comment. In light of your analysis I thought it was quite a good analogy using chess as a means of explaining how financial markets work. Obviously there are far more parameters, influences, inputs and outputs that govern, create and lead the behavior of participants in the market. But in it was a nice summary regardless. With regard to Black Swan events I was working within risk management in a global financial institution when two of them occurred. In both cases despite protestations from management we were able to wind down exposure to high risk assets as a number of indicators, while not letting us predict the exact magnitude of the event or its exact date of occurrence led us to believe that these events were on the horizon. Also when looking at what are defined as Black Swan events in history there were a serious of events or occurrences before hand. Many of which were minor but were catalysts nonetheless that created the likelihood of the so called 'BSE' occurring. Nothing occurs randomly, there is always cause and effect it is just that it is not clear to many as they are blinded by the surrounding noise or through choice or ignorance are not willing to look. As Isaac Newton said “If I have been able to see further, it was only because I stood on the shoulders of giants.”
    Jun 15, 2012. 01:19 AM | 1 Like Like |Link to Comment
  • The Stock Market And Chess: How The Game Works And Who Is Moving The Pieces [View article]
    I find the whole notion of 'black swan' events somewhat simplistic and the rationale behind the theory highly flawed. There is always a causal relationship between actions, events and impact, although sometimes it is not always clear to observers. This is particularly the case when risks, their likelihood and impacts are observed. If anything the 'black swan' argument and particularly its application in financial markets reminds me of how more primitive societies labeled events that they could not understand with supernatural or religious labels.
    Jun 14, 2012. 08:39 PM | Likes Like |Link to Comment
  • Beat The BRICs: Invest In Colombia, Latin America's Hidden Investment Gem [View article]
    le gallic thank you for the comments and additional insight. The policies that have been put in place by the Santos government concerning foreign investment and the protection of property rights are some of the strongest in Latin America. This combined with the liberal economic approach taken by the government has made it a very favorable country for foreign investment. It seems that Colombia's credit rating maybe upgraded shortly,which is something that S&P have alluded to for sometime. I am a little perplexed by the IMD rating Colombia as the second safest Latam country for personal safety, having lived in a number of South American countries I have found that personal safety in Colombia is still an issue, though not in the scale it was pre-Uribe. It is also moving in the right direction and hopefully the spike in violent crime in Medellin subsides soon.
    Jun 14, 2012. 07:59 PM | Likes Like |Link to Comment
  • Banco Santander: Paying The Price For Its Association With Spain [View article]
    jedku thank you for comments and insight. While there are significant risks in the operating environment, which you have pointed out, I believe their likelihood and impact in the context of Santander is over-stated by some commentators. I have also considered these in the article and Santander is in a stronger position than its peers to manage those events. But that said no one can accurately predict the future and the European financial crisis and the Spanish economic crisis still have a long way play out until we start to see light at the end of the tunnel. I think the biggest risk for investors when we consider the operating environment will be the current financial crisis and austerity measures significantly impacting Santander's revenues for a lengthy period affecting profitability and inevitably mean a dividend cut and/or create further potential for Santander to sell down its holdings in its more profitable Latam operations in Chile and Brazil or in Mexico after it IPOs. With regard to healthy Spanish banks being forced by the government to buyout insolvent or crippled banks this process has already been completed and with the bailout package in place I doubt that the Spanish government will look to further consolidation of the banking sector as a means to remedy the solvency problem. But good points and certainly should be kept in mind by investors when considering Santander.
    Jun 14, 2012. 02:13 AM | 1 Like Like |Link to Comment
  • The Stock Market And Chess: How The Game Works And Who Is Moving The Pieces [View article]
    Great article, very enjoyable and interesting reading! A new follower and looking forward to more.
    Jun 11, 2012. 07:33 PM | Likes Like |Link to Comment
  • The Real Fallout From Argentina's Nationalization Of YPF Sociedad Anonima [View article]
    Arg64 that is a good point and something that I believe investors should keep in mind. While in Argentina I think the problems run deeper due to government interference and at times erratic behavior resource companies should be abiding by the same environmental protections that regulate their operations in countries such as the U.S. I believe a good example of what you are referring to is Peru with the gold, copper and silver mining.
    Jun 8, 2012. 08:29 PM | Likes Like |Link to Comment
  • Banco Santander: Paying The Price For Its Association With Spain [View article]
    Ray thank you for the comments. That is something that I have covered off in my article and the dividend yield quoted is a forward yield based on the commitment made by Banco Santander to maintain the dividend. However, if you are only chasing dividend yield there are a whole number of factors you need to consider and I am certainly not recommending that investors buy Banco Santander for the dividend yield alone, that is only a small part of the story.
    Jun 8, 2012. 10:58 AM | 2 Likes Like |Link to Comment
  • Petrobras' Stock Bounce Possible, But Long-Term Prospects Shaky [View article]
    EC and PBR are very different companies with different growth trajectories and risk and reward profiles for investors. PBR is essentially a play on oil and Brazil. I doubt there will be much upside in PBR until the Brazilian government changes its protectionist economic policies and stops using the company as an economic policy tool and a bank to fund its developmental programs. In addition, the forced devaluation of the real by the Brazilian government is having a significant impact on Brazilian companies with U.S ADRs and dollar denominated debt. All said I like PBR and see massive potential in the company, but it needs to be disconnected from the Brazilian government before value can be released. My preference is EC, but here investors are taking a bet on whether it can build its reserves, that the security situation in Colombia will remain stable and infrastructure will improve. However, EC is reaping the rewards of minimal to no government interference and strong management with the company operating in a very liberalized economic environment. If anything I would see them as complimentary investments for the long-term investor.
    Jun 7, 2012. 08:10 PM | 1 Like Like |Link to Comment