Part 3 finance class summer 2010 forum nexus

Brian David Butler Professor of international finance and global entrepreneurship with Forum-Nexus Study Abroad. Guest lecturer with the IQS Business School of the Ramon Llull University in Barcelona, and the Catholic University of Milan . Previously, Brian taught finance, economics and global trade courses at Thunderbird’s Global MBA program in Miami, and worked as a research analyst with the Columbia Business School in New York City. Brian currently lives in Recife, Brazil where he is teaching classes at the university Faculdade Boa Viagem . A global citizen, Brian was born in Canada, raised in Switzerland (where he attended international British school), educated through university in the U.S., started his career with a Japanese company, moved to New York to work as an analyst, married a Brazilian, and has traveled extensively in Latin America, Asia, Europe and North America. [email_address] LinkedIn/briandbutler Skype: briandbutler

Brian Butler is a specialist in international economic analysis, and is founder of the prestigious “GloboTrends“ ( www.globotrends.com ) online economics site, which has been featured as syndicated content on Nouriel Roubini’s RGE Monitor, Emerginvest.com, Business Week Exchange, Wikinvest.com, and other leading news outlets. http:// globotrends.pbworks.com / , http:// blog.globotrends.com /

Lecture Schedule* * Does not include professional visits, *Subject to change, modification without warning ,[object Object],[object Object],[object Object],[object Object],[object Object]

Observations while in Spain… ,[object Object],[object Object],[object Object]

Spain & the Crisis: ,[object Object]

Spain Crisis, recovery, EU, Euro

Economist Intelligence Unit, Country Report, Spain, June 2010 Where are the major regions of Spain? - Industrial? Government? Tourism?

Economist Intelligence Unit, Country Report, Spain, June 2010 Next questions: 1. Which regions richest? Poorest? 2. Where is unemployment highest?

Spain review ,[object Object],[object Object]

Discussion on Spain… ,[object Object],[object Object],[object Object],[object Object]

Discussion on Spain… ,[object Object],[object Object],[object Object]

Discussion on Spain… ,[object Object],[object Object]

Discussion on Spain… ,[object Object]

Recent news… ,[object Object],[object Object],http://www.economist.com/displaystory.cfm?story_id=16216443

Key points to highlight… ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Dual Labor Market ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Economist.com, A special report on the euro area , Jun 11th 2009

Temp workers –during the boom ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Economist.com, A special report on the euro area , Jun 11th 2009

Temp workers - crisis ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Economist.com, A special report on the euro area , Jun 11th 2009

Dual Banking system – banks + Cajas ,[object Object],[object Object],The Economist, “Spanish banks, The mess in La Mancha” , Apr 2nd 2009

Cajas ,[object Object],[object Object],The Economist, “Spanish banks, The mess in La Mancha” , Apr 2nd 2009

Cajas & the crisis (housing) ,[object Object],[object Object],[object Object],[object Object],The Economist, “Spanish banks, The mess in La Mancha” , Apr 2nd 2009

Cajas & the crisis (housing) ,[object Object],The Economist, “Spanish banks, The mess in La Mancha” , Apr 2nd 2009

[object Object],[object Object],[object Object],[object Object],The Economist.com, “Spain's cajas, Unholy mess Spain’s troubled savings banks edge towards their day of reckoning, May 27th 2010

Cajas… ,[object Object],The Economist.com, “Spain's cajas, Unholy mess Spain’s troubled savings banks edge towards their day of reckoning, May 27th 2010

EU Banks ,[object Object],[object Object],[object Object]

Fears- Contagion ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Other countries – BIGGER Debts http://www.economist.com/world/europe/displayStory.cfm?story_id=16003661&source=most_commented

Hedging (to protect against risk)

Hedging foreign currency risk ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Hedging foreign currency risk ,[object Object],0 6 mo. US$ 1.25mm

Hedging foreign currency risk ,[object Object],[object Object],[object Object],[object Object],[object Object]

Hedging foreign currency risk ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],0 6 mo. US$ 1.25mm 0 6 mo. US$ 1.5mm

Terms you need to know…. ,[object Object],[object Object],[object Object],[object Object]

Terms you need to know…. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Terms you need to know…. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Exchange Rate Practices Dr. Kishore Dash, January 20, 2007 ,[object Object],[object Object]

Exchange Rate Options Official Dollarization Currency Board Free Float Peg More Flexible Less Flexible Crawling Peg Band Dirty Float Source: Rafael Barraza Dr. Kishore Dash, January 20, 2007

Review Concepts from last class

review ,[object Object],[object Object]

Review -- Series of Crises This is NOT the first one!!

quotes ,[object Object],[object Object],Martin Wolf

History of Crises (series) What happened around1945? What happened around1973?

http://mohammedfikri.files.wordpress.com/2010/02/bretton_woods_sign.jpg

Note timing ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Martin Wolf book, “Fixing Global Finance”

Series of Crises – 1990’s ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],http://globotrends.pbworks.com/history-of-economic-crisis-and-currency-devaluations

Fixed, Floating FX discussion…

Fixed vs. Flexible exchange rates ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Fixed vs. Flexible exchange rates ,[object Object],[object Object]

Brief History – Key points ,[object Object],[object Object],[object Object],Fixed Fixed Flexible Flexible The gold standard (~1850–1914) Fixed exchange rates during the 1920s Great Depression era Post WWII Bretton Woods / IMF system (1944–1971) 1970’s –today: since U.S. left the gold/dollar standard ?????

Brief History – Key points ,[object Object],[object Object],[object Object],Fixed Fixed Flexible Flexible The gold standard (~1850–1914) Fixed exchange rates during the 1920s Inter-war period Great Depression era Post WWII Bretton Woods / IMF system (1944–1971) 1970’s –today: since U.S. left the gold/dollar standard

Brief History – Key points ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

FIXED system… ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

FIXED system… ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Borrowing in Foreign Currencies…. Where would you prefer to borrow? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Part 3 finance class summer 2010 forum nexus

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Part 3 finance class summer 2010 forum nexus