HSBC

I've taken Junk Bonds idea about profitting from collateral damage into this post. HSBC has held up better than most big banks. Even when compared to the big international banks, it's 6 month return has been better than UBS, Barclay's, and Deutche Bank. They still have exposure to the American subprime market but its stock price has held up better than the American banks. Do the markets think that their exposure or risk is less?

I haven't followed HSBC closely, but they are one of the world's largest and has a significant presence in H.K. as well as China. They are diversified throughout 76 countries. Not many banks operate in H.K. China, U.K., U.S., Asia, and Latin America. It's current market cap is about $200 billion US.

They've got a position in three Chinese banks and about 15% or their latest year operating profit was from Hong Kong. I see they're in the news today because they're buying a distressed Taiwanese bank.

I think this is one to watch especially if there is more credit fallout.