iShares S&P Latin America 40 Index (ILF)

All Comments on ILF

  • commenter
    mangy cat
    Jun 24 09:00 PM
    Are We Facing a New Wave of Sovereign Bond Defaults? [view article]
    adding to dedalo
    and also as a holder of indexed argies of almost all durations -well almost all from pr11 at barely 1.1 yrs duration to parp at 15 yrs, and even cuap indirectly at my afjp account-
    look at the extreme convexity of the yield curve

    what the market seems to say is:
    pick up 14 % ytm now on most traded 2.5/5 duration segment (pre9, nf18) and break even with "official" 9/10% cpi now, to recoup with hefty gains later when indec returns to normal

    otherwise instead of ytm on longer bonds dropping to 10%
    "realist" default expectations would push the yield curve parabolical

    where i do agree with rogoff quoted is on:
    "governments do not usually cheat holders of only one type of debt"
    as proven by like treatment for globals and (domestic) bontes in 2002
    the paradox is the approx 10% pricing gap between otherwise identical domestic and foreign usd bonds (para/pary; dica/dicy; tvpa/tvpy)
    but that may be reflecting fear of exchange rate controls (differential payback) rather than of default     Reply
  • commenter
    dedalo
    Jun 24 07:27 PM
    Are We Facing a New Wave of Sovereign Bond Defaults? [view article]
    I personally hold Argentine inflation index bonds and, although I am aware of the inflation numbers being manipulated, it all comes down to how much the bonds are yielding, and at the current ultra discount prices, these bonds are returning over 20%, even when the official inflation is around 10%. What is being priced here is the (totally unrealistic) risk of default. Argentina is indeed, like Brazil, a commodities powerhouse. Unlike what happened in the 90s, when commodities where low, the country is now benefiting massively from the current commodities supercycle (which will not end any time soon), and has had a trade surplus for the last six years, export dollars flooding the country, and its currency getting stronger (in the last month it´s gained 5% against the dollar). Anyhow, thanks to delirious articles like the one on the WSJ and all the default-paranoia, it is now possible to buy these bonds at such a discount and get a great yield, plus the currency valuation.

     Reply
  • commenter
    buyitcheap
    Jun 24 06:59 PM
    Are We Facing a New Wave of Sovereign Bond Defaults? [view article]
    Wait until the entities with VRDOs hit their standby facilities... goodbye banks... Reply
  • commenter
    ganc
    Jun 24 06:11 PM
    Are We Facing a New Wave of Sovereign Bond Defaults? [view article]
    _And default is a state of affairs, not a state of mind: you can't say that Argentina is in default just because it is deliberately manipulating its statistics._

    If the manipulation is real, the bondholder in effect is being paid a lower coupon rate. than the contractual coupon rate.
    In essence there is a restructuring of the bond which I think is a default. And it is the state of affairs.
    Reply
  • commenter
    Chris White
    Jun 24 03:56 PM
    Are We Facing a New Wave of Sovereign Bond Defaults? [view article]
    Thank you for these thoughts. The preservation of value is an interesting question. It might be interesting to compare the U.S. present circumstance with other Third World precedents. Would not the application of the medicine the US and international institutions insisted was necessary to restructure third world debtors be an option for the US's international lenders now? It might be, for example, that the current US situation could usefully be compared with Mexico in 1982 from the standpoint of capital flight, currency over-valuation, endebtedness. The ratios of values in Mexico before and after the devaluation and restructuring of 1982 might provide a better indicator of what's ahead than comparisons with the stag-flation of the 1970's when the US economy was very different than it is now. Reply
  • commenter
    Reinko
    Jun 24 03:28 PM
    Are We Facing a New Wave of Sovereign Bond Defaults? [view article]
    The author asks himself the following question, quote:

    Well, are levels of domestic debt rising? In real terms?

    Unquote.

    Comment: See this detail from the FED Z1 release, look in the first column and scroll down, link:

    www.federalreserve.gov...

    Lets look at non financial debt only:

    2007 Q4:31249.3
    2008 Q1:31758.4 billions of US$.

    So in one quarter has this part of the US picked up over 500 billion more debt, for the year this will mean about 2000 billion or 2 trillion.

    That is a size of about 15% of the yearly gross domestic product in more debt and this is only a segment of US society.

    Conclusion: Debt growth is still a multiple of gross domestic product growth. The law of exponentials still says the biggest exponent wins and thus total debt will grow on and on...

    As a comparison:
    Suppose company 'Blink it Blue' has a market cap of 100 million and every 2 to 3 years they sell bonds in 100 million US$ bundels.
    Would you invest in the long run in that company?
    Reply
  • commenter
    huangjin
    Jun 24 03:03 PM
    Are We Facing a New Wave of Sovereign Bond Defaults? [view article]
    I read their paper and it is worth checking out. You can view it here:
    www.publicpolicy.umd.e...

    The title of their paper should give you some indication of their thesis: This Time is Different: A Panoramic View of Eight Centuries of Financial Crises.

    What does it matter to the investor if a country recognizes it cannot pay its debt and defaults, versus a country that refuses to default and prints its way out? The underlying economic factors are the same and will lead to financial crisis. And yes, consumer credit is growing in Brazil.

    "Like private-sector banks in Brazil, Banco do Brasil has benefited from increasing demand for consumer credit, which has been expanding at a steady pace as the economy grows and as domestic interest rates remain near historic lows.

    Banco do Brasil's credit portfolio surged 23.1 percent in the first quarter from a year earlier, reaching 172.76 billion reais. In 2008, it expects its loan portfolio to expand 25 percent."
    www.reuters.com/articl...

    Also see this:
    "The shortest distance between a U.S. shopper and the product he or she craves: credit, preferably of the card variety.

    For many Latin American consumers hoping to get their hands on a personal computer, the barrier is the same — or more precisely, it's the lack of credit.

    "Really, nobody but a couple companies will finance consumers," said Peter Weigandt, head of Dell Inc.'s business in Latin America.

    Dell and other computer makers are developing novel ways to tap into the rapid growth in Latin America and other emerging markets. In Mexico, Dell and Telmex launched a program five years ago that allows consumers to buy a PC, then pay for it in installments on their monthly phone bills. Because Telmex controls nearly all the phone lines in Mexico, Weigandt says, the program has had a very low default rate.

    Those and similar programs are key for Dell, Hewlett-Packard Co. and other major computer makers as they look to offset slowing growth in mature markets with the boom in several developing countries."
    www.statesman.com/busi...     Reply
  • commenter
    TopForeignSt
    ocks
    Jun 09 07:47 PM
    My Website
    Do Northern Trust's NETS Pose a Genuine Challenge to iShares? [view article]
    NETS Etfs will survive but it will take a while before they can get any where closer to ishares. Reply
  • commenter
    helsi
    Jun 09 11:15 AM
    Broad Emerging Market ETFs [view article]
    Anyone have any info on stocks/etf's on Peru and/or Chile? Reply
  • commenter
    User 207335
    Jun 09 09:39 AM
    Do Northern Trust's NETS Pose a Genuine Challenge to iShares? [view article]
    Don Dion is offering a free video conference this Wednesday on his outlook for the 2nd half of the year! Go to www.dionmm.com/video/p... to register! Reply
  • commenter
    David Fry
    Jun 05 10:48 PM
    Thursday Outlook: Commodities, Emerging Markets [view article]
    Sometimes the only wisdom is the tape. Reply
  • commenter
    Msrpaul
    Jun 05 07:02 PM
    Thursday Outlook: Commodities, Emerging Markets [view article]
    David,

    I always love your posts. I got out of commodities before the last final and rewarding run, and keep waiting to get back in. I am aghast at the markets' willingness to digest bad news, but then again, with the coffers of the Fed in their minds as a backstop, risk is the only way to go. The consumer lending market has ground to a halt, and lots of people are on the brink. I know, as I work in the financial industry and see them. There is huge overcapacity in the financial system, which is yet to be dealt with. And today, the Ambac's got downgraded, and the market RALLIED!!!! What's missing from this picture? In the end, we are experimenting with a great game, using assetts instead of income to try to maintain"wealth&q... i.e. borrowing to keep the debt spiral running. The housing market is deflating. Moreover, today, the market rallies on high oil. I just can't figure the twisted logic. And gold falls on a weaker dollar.     Reply
  • commenter
    buyitcheap
    Jun 04 09:47 AM
    The U.S. Credit Crisis: Major Paradigm Shift [view article]
    What wealth transfer? Don't you mean debt/IOU transfer? They're sending cash back to us for paper & promises.

    Excellent posts all.     Reply
  • commenter
    zooey
    Jun 01 08:37 PM
    The U.S. Credit Crisis: Major Paradigm Shift [view article]
    Provokingly kind and gentle, but why skirt the main point as most replies have done? The USA is broke, bankrupt,and likely to further complicate the problems with more monetary insanity. I agree:foods, fertilizers, commodities, gold, silver- and for a while, but only a while - bonds are the places to hide out during the storm. What we have not said is what kind of a society will these events spawn. Too early to be precise, but a very different society in the long run. We should be deeply concerned as should the world. No one wins on this round of events. Reply
  • commenter
    User 202626
    May 30 07:08 PM
    General Discussion on ILF
    If you mean short, then I think not. If you mean get out of a long position then maybe, Depends on what your doing. Personally I'm looking for an entry point which I'm hoping will happen over the next few days.

    Does anyone have info or links to analysis of valuation for the L.A. indexes. My take is that the valuations seem high, but they are growing markets and so higher valuations may be justified.     Reply
Loading...
Symbols:
Authors:
Quick Links: