Ross Naylor +48 (22) 389 65 70 (w) +48 512 275 706 (m)

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A Lighthearted Explanation of Subprime Due to unforeseen circumstances, the past week has been particularly fraught. As a result, this week's lead article comes not from my own fair hand, but from the clever guys at Casey's Daily Dispatch. It is a super, albeit lighthearted, explanation of how the subprime crisis evolved. Enjoy. "Heidi is the proprietor of a bar in Detroit. She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar. To solve this problem, she comes up with a new marketing plan that allows her customers to drink now, but pay later. Heidi keeps track of the drinks consumed on a ledger (thereby granting the customers' loans). Word gets around about Heidi's "drink now, pay later" marketing strategy and, as a result, increasing numbers of

Words from the wise

"If something cannot go on forever, it will stop." - Herbert Stein

Art (for lack of a better word) Imitating Life

In the original Wall Street movie from 1987 the lead character (Charlie Sheen) struggles to pay the rent on a 100 square metre apartment. In the new version the young star (Shia LaBeouf) lives in a condo that is worth well over a million dollars. Is there a correlation between

customers f lood into Heidi's bar. Soon she has the largest sales volume for any bar in Detroit. By providing her customers freedom from immediate payment demands, Heidi gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages. Consequently, Heidi's gross sales volume increases massively...." The rest of the story can be found here.

Food for Thought

These are some of the articles that have caught my attention in the last few days. I hope that you f ind them interesting too. 1. A video interview in the FT with Christopher Wyke, commodities product manager for Schroders, on why it is still a good idea to invest in gold, despite its recent rise. He offers a pretty good explanation of how to gain exposure to gold as well as some reasons for why it can still go higher. Watch it here. 2. Suspicious Minds - There has been a marked difference between the ways the French and British have reacted to pension change/reform. This article looks at the differences as well as discussing the uncertainty facing many people with UK pensions. Article here. 3. The decisions you make just before retirement can have big consequences for your financial future. This is an interview with financial planner Stuart Ritter who talks about some common mistakes that people make on the verge of retirement. Watch it here. 4. A simple way of deciphering glossy financial brochures. See here.

this and the real life housing bubble, where people purchased property way outwith their means?

Did you know?

50 years ago, Ghana and South Korea were economic equals. South Korea's economy is now 25 times the size of its sub-Saharan counterpart's. It churns out hundreds of billions of dollars worth of Samsung televisions and Hyundai cars and is now the world's 15th largest economy. The question to ask is, where is going to be the next South Korea?

My New Website

My new website has just had it's soft launch. The full launch will be next week. Feel free to have a browse in the meantime. Any feedback (positive or negative) is more than welcome.

Disclaimer

The views expressed here are my own.

They are not necessarily shared by

AES International. They are subject to

change at any time based on market

and other conditions. This is not an

That's all for today

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offer or solicitation for the purchase or

sale of any security and should not be

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intended to be, and should not be

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