Monday, October 25, 2010

Howard Gold, Toronto Money Show 2010

Howard Gold, the executive editor of the Money Show was the next speaker. What he talked about was the winners and losers of the recent financial crisis. He felt our current crisis ended one and one half years ago, but that we are still felling the aftershocks of it and we will continue to feels aftershocks for a while. Because of this crisis, some countries will thrive and some will sink. Winners had low leverage and sound banking systems. The winners tended to be in Asia and South America.

He said that the biggest winner was Singapore, which is expected to grow 15% this year. In #2 spot was Malaysia and Indonesia, which were hit hard, but made a strong recovery. In #3 spot was Latin America’s Columbia, Chili and Peru. In the #4 spot was the Nordic countries of Scandinavia, which are not so socialist anymore. These countries are Sweden, Denmark and Norway. In #5 spot is Canada and Australia. What they have in common is a huge area and small populations. They also are rich in natural resources and had solid, risk-adverse banks.

He went on to talk about the losers. In #1 spot was Iceland that is tiny, but had banks with very big plans. The next loser, in #2 spot was Ireland, which went from a Celtic Tiger to a pussycat. In #3 spot for losers was Greece and #4 was Club Med of Spain, Portugal and Italy. The #5 spot was held by Austria and Hungary.

The main point is that winners had strong banks and losers had weak banks and massive debt. The lessons from this crisis seemed to be that you should get over a crisis early so you fix your system before others so. Other lessons were that leverage kills and no one is immune. The last point is that it is a good thing to have China as a partner and then pray that China’s real estate bubble does not pop.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.

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