Lectures on Financial Economics by Antonio Mele (Swiss Finance Institute)

Continuing the series of educational articles on Market Folly, today we present Lectures on Financial Economics by Antonio Mele. Published in March 2012, it comes from the University of Lugano and the Swiss Finance Institute.

In the publication, Mele addresses:

Part I "Foundations": Fundamental tools of analysis such as classical portfolio selection, dynamic consumption- and production- based asset pricing.

Part II "Applied asset pricing theory": Excess price volatility, countercyclical stock market volatility, and value premium.

Part III "Asset pricing and reality": Option pricing and trading, interest rate modeling, credit risk, and derivatives.

Embedded below is Antonio Mele's Lectures on Financial Economics (email readers click the link to come read it):



For more of our educational posts, head to:

- Notes from Seth Klarman's Margin of Safety

- The 3 sources of Alpha

- Common sense investing: collection of Ben Graham's papers

World's 50 Safest Banks: Global Finance World's Rankings

While this list was released back in March 0f 2009, we wanted to publish it up as we forgot to at the time. Global Finance World publishes a list of the World's 50 Safest Banks and they edited it mid-year which reflects the turmoil within the financial markets worldwide. Interesting tidbits regarding the list: Only 4 American banks make the list, none of which are in the top 10. The closest is Wells Fargo (WFC) at 21st. This will certainly draw much criticism as there are many skeptics out there regarding Wells Fargo's stability.

Another interesting fact is that all of the major Canadian banks are included in the top 50, which confirms what many strategists and prominent investors have been speaking of throughout the turmoil. They have said that if you want to own banks at all, then your best bet is a Canadian entity. Specifically, Dennis Gartman has often noted his preference of Canadian banks. In addition to a large amount of Canadian banks on the list, there is quite a cluster of Australian banks within the top 25. Lastly, we'd also like to highlight the large amount of German banks on the list, especially ranked within the top 10.

Embedded below is the publication. (RSS & Email readers will need to come to the blog to view the embedded document). Here is Global Finance World's 50 Safest Banks list:




Now, while rankings lists like these might be fine and dandy, we're inserting an asterisk next to this one. Why? Well, because upon examination of the criteria for ranking, we were a bit surprised. Global Finance World ranked the banks according to long-term credit ratings and total assets. They used ratings from Moody's, Standard and Poor's, and Fitch. And there is your red flag right there. They are compiling a list based on ratings from the ratings agencies... the same ratings agencies that have appalled many of us with their reactionary movements and downgrades. What good are the ratings agencies if they can't even provide accurate ratings to give us a barometer as to the health of various institutions? But, we digress. We've attached the list for your perusal (or comic relief) anyways.

As always, take things like this with a nice grain of salt.

Some Financial Freebies & Deals

Since we're going into the weekend, just thought I'd post up various freebies and deals I've come across over the past week or two that are finance/market related. Economy sucks right now, so some of these should be beneficial.

• Free Quicken Online - yep, entirely free. (They used to charge $35/yr). Worth checking out for all you savvy personal finance people out there. I wrote about this deal a week or two ago and just wanted to make sure everyone took advantage of it, I know I did.
  
• Free Stock Trades - If you want 10 free trades a month, even for retirement accounts, then check out Zecco. Its great for building core positions over the long-term. If you think about it, 10 trades a month at other brokers would normally cost you $40-70 per month in commissions, so you just saved that money. They recently had no commissions for the entire month of October, which I wrote about here.
  
• Get $100 bonus at ForexClub. Those of you who trade forex or are interested in getting into it, this is a pretty good deal. Just deposit $100 or more into a FXClub account and they give you $100; easy stuff.

Lastly, a few readers have been emailing me wondering what I've been doing with short-term cash in this environment. The crazy market volatility means I've reduced position sizes in the market and have much more cash on hand than I normally would. I've just parked some of that cash safely into FDIC insured online savings accounts. The yields aren't what they used to be (thank you Ben Bernanke), but you can still get some decent rates to park your cash safely in this environment and earn some interest. I've got accounts at both of these places:

• Earn 2.75% APY with ING Direct Online Savings Account. These guys have been around the online savings game for a long time. I've had an account with them forever it seems. Easy interface, no fees, no minimums, and FDIC insurance at ING Direct.
• 3.00% APY with HSBC Direct Online Savings. This is the other online savings account I've got. Slightly higher rate, but I personally like ING's setup a little bit better. The interest difference between the two doesn't add up to a whole lot anyways. But, HSBC Direct is definitely worth a look as they have no fees, no minimums, and FDIC insurance as well.
  

Bankers Versus Consultants

Great Stuff.