Large emerging market companies, such as Tata Motors, are taking advantage of the recent global downturn (see Economist article). Such companies are finding they can take advantage of their relative positions in making low-cost production models, due in part to their inexpensive labor. Even without global demand, growth in developing companies is still increasing, even though it has slowed, allowing such companies to stay afloat due to local demand. Finally, there is less international pressure on companies that can make it domestically, since multi-national companies are focusing their investment at home, and becoming more inward looking. Such a development can allow a company making greener technologies, such as Tata, to gain a stronger position, while also allowing new companies more opportunity to get started without high initial competitive pressures.
Large Emerging Market Companies Taking Advantage of the Downturn
Posted by Bull Bear Trader | 3/30/2009 12:25:00 PM | Emerging Markets, Tata Motors | 0 comments »Some Banks Walking Away From Home Foreclosures
Posted by Bull Bear Trader | 3/30/2009 12:06:00 PM | Banks, Foreclosure, Home Ownership, Mortgages | 0 comments »As a result of both decreasing home values and increasing legal fees, some banks are deciding to not take possession of properties in foreclosure (see New York Times article). In addition to legal fees, homes in foreclosure are seeing increasing maintenance fees, due in part of vandalism and neglect. The problem is that once the bank walks away, the name of the homeowner is still on the title, making them responsible for maintaining the home. Even if the home is to the point of being demolished, the homeowner may be responsible for the cost of demolition and clean-up. It looks like the banks are indeed getting some of their problem loans off the balance sheet, but this may not be the way the Fed and Treasury had in mind.
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