Thursday, 18 October 2012 06:14

Greece Is To Pathogen As Cyprus Is To Contagion As Spain Is To Infected... Featured

CNBC reports Greece Austerity Strike Will Hurt GDP Further even as Cyprus Expects Bailout as S&P Cuts Ratings to Junk:

Cyprus said on Wednesday it expected talks to start with lenders on badly needed aid next week, as ratings agency Standard & Poor's pushed it deeper into junk territory, implying domestic political expediency lay behind a delay in clinching a deal. One of the smallest nations in the euro zone, Cyprus sought European Union (EU) and International Monetary Fund (IMF) aid in June after its two largest banks suffered huge losses due to a write-down of Greek debt.

Well, our Contagion Model showed clear paths of the knock on effects of Greek infection, and we haven't even gotten started with the economic pathogen party yet!

Of course, where there is a loser, there's always a winner as well - sometimes hidden beneath all of their spoils... On Friday, 04 May 2012 I penned The BoomBustBlog Pan-European Distressed Asset Acquisition Initiative, which clearly outlined the investment opportunities forthcoming in the tiny nation state known as Cyprus, as excerpted:

Asset sale by sovereigns is can be seen in the sale of stakes in government owned infrastructure assets and corporations. However, the approach adopted to dispose of these assets is to make partial sales in tranches in order to participate in any benefits of valuation recovery.

Professional and institutional subscribers should download the full version of this document (File Icon The BoomBustBlog Pan-European Distressed Asset Acquisition Initiative) which outlines investment opportunities in the following nation/banks: UK, Portugal, Italy, Cyprus, Greece, Ireland and Spain.  Our initiative runs the gamut from whole companies and equities, to real estate, infrastructure assets, rare earth and hard tangible assets to IP.

Dispositions by Europeans banks have consisted mostly of foreign assets outside of Europe. Most of these assets had the potential for high returns but are being offered at prices reflecting the perception that future investment performance would be robust. This is why there is so much interest in the private equity and asset management space in scanning for strong deals among those assets. However, the competition among these entities to buy quality assets at reasonable valuations has created a micro bubble of sorts, the type that make profitable vulture investing a very difficult proposition.

Over the next week I will lead readers and paid subscribers through a journey of distressed assets being disgorged by banks and sovereigns that are poised to give those who are perceptive enough out-sized returns. I find this research and foresight to be invaluable, and I believe many institutions, asset managers and UHNWers will as well. Of course, the potential winners may be those who aren't among the usual suspects, and I feel TPTB amongst the EU clan may feel downright intimidated.

Yes, Spain will contribute to this vulture-fest, as will those still hooked into Greece, et. al.

Stay tuned, and follow me!

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Last modified on Thursday, 18 October 2012 09:10

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