Sailesh Radha

Research analyst, portfolio strategy, macro
Sailesh Radha
Research analyst, portfolio strategy, macro
Contributor since: 2012
Company: Intermarket Research & Analytics LLC
@Eaglesnest: Two-tier architecture as referred to in the article is splitting Eurozone in to two currency zones - one containing the core and the other containing periphery.
@valueplay98 - You are right Eurozone needs to be bifurcated in to two currency zones - one containing the core and the other the periphery. My article few days alluded to this architecture.
http://seekingalpha.co...
@Eaglesnest: Other things apart, I would advise you to read the article once again, as you have missed some nuances. If you look at the article, I have prognosticated a bifurcation of the monetary union - one made of the economic powerhouses and the other from the periphery including Spain, Portugal, Ireland and Greece. I've also mentioned that Italy would fall in to the first group for various other reasons. What I have stated is that ECB pumping money does not alleviate the fundamental problems of the countries in the periphery - ECB help is just a temporary patch, but in the long-run, the market will force EU to go into a two-tier architecture.
Thanks @Zenith Strategies.
@Eaglesnest.. I would appreciate if you would read my disclosure, I do not own any of the tickers listed in the article. What you are seeing with EWP is reversion to mean, but I would like to caution that now-a-days equity market's performance is on a risk-on/risk-off mode and not anymore a function of the country's economic fundamentals.
It would be nice if you take away sarcasm and jabs from this forum, so that we all can have meaningful discussion.
@airlarr. Sorry for the delay. Getting into real estate on the coast could be lucrative now - as the government is promoting investors to buy up homes on the coastal regions
@Aquater, @rob1221,@vsilakov: Thank you folks. For the months May to October, I am working on modelling a portfolio with some select securities. I'll publish them when I am ready with. This article was too lengthy and that's why I decided put that detail portion in a different article. I don't think it's necessary that we have to exclude equities - we could look at other indices. The key here is beating this benchmark -as discussed in the article - "In the last fifty or odd years, portfolio 1 returned an average of 0.6% per annum, and for the last 15 years, it has averaged -0.5% per annum (see table 3)."
@Eric Peterson - Thanks. I'm getting ready to put out a study for the time-period 1960-2012.
Thank you folks.
@BankimPatel: -42.8% is an effect from change in income tax brackets at the lowest levels.. We need to monitor that chart for the years to come (ceteris paribus) to assess the impact on re-balancing.. Using technology was fun.
Thanks baddude. Let me answer your points:
1. I had a paragraph in there about the bailout, which I pulled out from the article at the last minute, thinking the article was long. Here's what I had in there -
The regional fiscal woes, in addition to the ongoing second recession in Spain in three years, the banking crisis from non-performing property loans, and the heavy debt burden of the central government, are for all-purpose going to force Madrid to seek full-blown financial help sooner or later from the permanent Eurozone’s permanent bailout fund, the European Stability Mechanism (ESM), in addition to the bank recapitalization package of € 100 billion from ESM that was unveiled in June. The full-blown conditional Eurozone bail-out of the Spanish government, called the Precautionary Conditioned Credit Line (PPCL) package, will enable it to borrow at sustainable rates when the ECB makes unlimited yield-lowering purchases of the sovereign bonds in the secondary bond market - the Outright Monetary Transactions (OMT).
2. True. I should have used "few"-. On fiscal devolution packages, there has been talk among regions having a package that exists for Navarra and Basque and has been quoted in sources. Catalonia is the only one that demanded in the open.
3. The autonomous regions behind the Spanish State in publishing the fiscal data. I tried all resources to get the current, and I could not get hold of them. If you know of data resources that keep up with the current fiscal scenarios, I would be happy to have them..
@Charlie Price: You points well-taken. I agree with you on point 1, but on point 2 - I proposed counter-cyclical policies at all points of a cycle, and that means, now when Spain is having a down-cycle, austerity is not the solution, and when Spain had a boom, fiscal spending should not have gone up in sync with increased revenues. So what I was proposing per say was - automatic stabilizers - decreasing spending during booms, and increase spending during the bust cycles, all with in the norms of a good financial management principles.
Thanks everyone.
@Bankimpatel: Sometimes in the near future, I'm definitely going to study some countries that have put countercylical fiscal policies and succeeded.
Bankim: Thx. Your points well taken - But, let us not discount the following facts that could be undertaken by the Chinese policy makers in the years to come -
1. 65% of the Chinese population live in rural areas, Consumption is going to depend on the rate of urbanization, which in turn depends on how fast China labor market makes a progress up the value-chain from low-skilled jobs to higher-paying higher-skilled jobs.
2. Social safety-net reforms in terms of pension and expansion of a pragmatic and progressive public health care insurance.
3. Financial sector reforms - allowing free market principles govern the inter-play between savers and lenders, thereby increasing the cost of capital for investment projects. This would increase availability of credit for owning houses and consumption in the urban areas.
Thanks Freddy, Ben Gee & mh001.
mh001: Apparently, my sub-title under the chart title at the top concurs with your take that they are YTD values, but if you look carefully, they are year-over-year basis though.