Weekend Picture Post

Commercial Property Bonds vs. Corporate Bonds. Which is better?

Many corporate bonds are offering high-yield returns right now, trading less than its face value while still relative stable. Commercial real estate starts to get hit hard while office and mall vacancy rate shooting to the roof and it is not going to get recovered in anytime soon. Which is relative better? Commercial Property Bond or Corporate Bond? Is Commercial Property Bond going to become junk bond and worth almost nothing just like residential?

According to CNBC:

"Commercial real estate—like its much bigger residential cousin—is starting to get hammered by the credit crisis and slumping economy. But for investors, the news isn't all bad.

Regional banks and some real estate investment trusts, or REITs, are likely to get hit hard as delinquencies on commercial real estate loans rise. But oddly, commercial mortgage-backed securities, or CMBS, are offering outsized gains with less risk than you might think.

Commercial-mortgage securities are in far better shape than their residential counterparts, even though they've been sold off as investors dump anything related to real estate. That's because the underwriting standards have typically been tighter for CMBS, especially in recent years when people could get residential mortgages with little or no documentation.

Roughly 80 percent of CMBS bonds are still rated Triple A. They're also structured so that investors are largely insulated from anything but large-scale defaults.

Another reason is that investors get much more information about the health of the commercial mortgages, allowing them to bypass the credit rating agencies."

Seven Deadly Sins of the Meltdown

From Big Picture: Seven Deadly Sins of the Meltdown

Weekend Picture Post

Rogers International Commodity Index

The Rogers International Commodity Index (RICI) (Yahoo Finance ^RCT) is a composite, U.S. dollar-based, total return index created by James Beeland Rogers, Jr. (“Rogers”) on July 31, 1998. The RICI was designed to meet the need for consistent investing in a broad based international vehicle; it represents the value of a basket of commodities consumed in the global economy, ranging from agricultural to energy to metal products. The value of this basket is tracked via futures contracts on 36 different exchange-traded physical commodities, quoted in four currencies, listed on eleven exchanges in five countries.

Below is a current list of the futures contracts comprising the RICI, together with their respective symbols, exchanges, currencies and initial weightings:

Contract	Exchange	Currency	Initial Weighting
Crude Oil	NYMEX	USD	21.00%
IPE Brent	ICE	USD	14.00%
Wheat	CBOT	USD	7.00%
Aluminum	LME	USD	4.00%
Copper	LME	USD	4.00%
Corn	CBOT	USD	4.75%
Heating Oil	NYMEX	USD	1.80%
IPE Gasoil	ICE	USD	1.20%
RBOB Gasoline	NYMEX	USD	3.00%
Natural Gas	NYMEX	USD	3.00%
Cotton	NYCE	USD	4.05%
Soybeans	CBOT	USD	3.25%
Gold	COMEX	USD	3.00%
Live Cattle	CME	USD	2.00%
Coffee	CSCE	USD	2.00%
Zinc	LME	USD	2.00%
Silver	COMEX	USD	2.00%
Lead	LME	USD	2.00%
Rice	CBOT	USD	0.50%
Soybean Oil	CBOT	USD	2.00%
Platinum	COMEX	USD	1.80%
Lean Hogs	CME	USD	1.00%
Sugar	CSCE	USD	2.00%
Azuki Beans	TGE	JPY	0.25%
Cocoa	CSCE	USD	1.00%
Nickel	LME	USD	1.00%
Tin	LME	USD	1.00%
Greasy Wool	SFE	AUS	0.25%
Rubber	TOCOM	JPY	1.00%
Lumber	CME	USD	1.00%
Barley	WCE	CAD	0.27%
Canola	WCE	CAD	0.67%
Orange Juice	NYCE	USD	0.66%
Oats	CBOT	USD	0.50%
Palladium	COMEX	USD	0.30%
Soybean Meal	CBOT	USD	0.75%

How to invest in RICI? Can it be invested in Mutual Fund?

CBS 60 Minutes - CDS

CBS 60 Minutes - Credit Default Swap

Weekend Picture Post

How Debt Bites Back

How Debt Bits Back

Click for larger image

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