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Dawn banks alive (?)

Yesterday in a speech before the U.S. Senate Banking Committee, which would report its plans for the banking sector, said the old Ben :

The Treasury will buy preferred shares of 19 largest U.S. banks if the stress test determineranno che esse hanno bisogno di maggiori capitali per affrontare una recessione che si è rivelata peggiore delle previsioni, ha detto Bernanke ai politici di Washington oggi. Le azioni privilegiate saranno convertite in azioni normali solo se delle perdite straordinarie si materializzeranno, ha detto.

"Non vedo nessuna ragione di distruggere il valore di un istituto o di produrre le grandi incertezze legali che farebbero seguito alla nazionalizzazione formale di una banca quando questo non è necessario" ha detto Bernanke ad una seduta del Comitato Bancario del senato.

Le azioni privilegiate sono una specie di ibrido tra obbligazioni e azioni comuni. Generalmente I do not guarantee voting power, but expect to pay a fixed dividend, which was agreed between the company and who will buy the shares in question (similar to the performance of bonds for instance) and in case of liquidation of the company who owns this type of action has priority over payment with respect to common shareholders (but after bondholders is).

For these reasons, many governments use this tool when they need to recapitalize banks. The formal institutions remain under private control, on the value of joint actions is not diluted (to the delight of shareholders). At the same time the state can tell around it did not just give money without getting anything in return (given that a dividend is paid) and if necessary, by agreement between the parties, preference shares can be converted into common shares.

I could say a lot about the statements Bernanke and nothing particularly pretty, but in this case I prefer to let the speak Nobel laureate Paul Krugman that summed up well in an article entitled mysterious plans, programs the impression that Ben has left many (including myself):

I'm trying to be open towards various plans, or items of plans to help banks, but still not be able to understand or what are the plans or because they think they can work. And do not think it's my fault.

Apparently, the latter involves the conversion of preference shares into common shares in the hands of the government, perhaps. James Kwak has a good explanation of this whole thing. It is not clear what you will be able to get by following this path ...

... What the Treasury now seems to propose is to convert some of the actions in action blue green (this refers to a diagram in his article ed ) - Convert the preferred into common. It 's true that the preferred shares have certain qualities typical of the debt - required the payment of dividends, etc. .. But does anyone think that the reason why banks are shabby and found their hands tied by obligations to preferred shareholders, rather than simply from having too much debt?

really do not know. The depressing feeling that the administration's plan is to make the orchestra continue to play and hope that in the meantime, melt the iceberg itself, becoming stronger.

What I'm talking Krugman can not help but evoke the demands made by ' AIG in recent days. Monday the former global insurance giant, 80% in the hands of the U.S. government, announced a quarterly loss of $ 60 billion. The largest in a single quarter, the history of the United States. This comes after the ' AIG had suck $ 150 billion to the American taxpayer in various forms. Where are gone these 60 billion is not known. Some call into question losses on products that depend on non-residential real estate market, Bloomberg (before removing that part of the article) was about 18.7 billion in swap whose biggest share would be paid to Societe General SA , Goldman Sachs Group Inc, Deutsche Bank AG , Calyon Securities and Merrill Lynch & Co.

Wherever they got the money, the ' AIG , unstoppable zombie like any self-respecting, came back hungry for money from the U.S. government. The promise he made in September to sell pieces of the company to repay the state of the money received was apparently forgotten. Not that many people are surprised at this. The only surprising thing are the current requirements of ' AIG . This would please the state consented to the conversion of its preferred shares into common shares. There is talk of $ 40 billion.

The treasure of the United States finds itself in antipathy situation. Can not increase its share of joint actions, because going beyond the limit of 80% of properties that are self-imposed to keep up the charade of non- nationalization. At the same time, for some reason - probably related to the mass of cds that ' AIG has issued in recent years - the U.S. government seems to be willing to do anything because the company is not dying fail . Among AIG , government agencies and rating dense discussions are underway to find a solution that would allow it to stay alive without suffering a further cut of rating - an event that would compel it to recall other capital to guarantee their solvency.

Apparently, the story dell' AIG ha fornito a Bernanke l'infelice idea che acquistare azioni privilegiate - in quantità indefinita - sia lo strumento migliore per ricapitalizzare il settore bancario. Devo concludere che Ben sia un grande fan di Romero visto che sta cercando in tutti i modi di creare un esercito di zombie. Cosa si aspetti di ottenere continuando a fornire denaro alle banche, senza fare chiarezza una volta per tutte sulla loro condizione e senza che ne vengano efficacemente ripuliti i bilanci, mi sfugge. E' come se stesse gridando a pieni polmoni: " lost decade, arriviamo!".

Non dobbiamo preoccuparci però. Il capo the Fed yesterday also launched some reassurance to the market :

But, he said ( Bernanke ed), assuming that economic action to take foot "there is reasonable perspective that the current recession will end in 2009 and that 2010 will be the year of recovery. "

This said by the same individual over a year ago went around telling:

"Right now... The impact on the wider economy and financial markets of the problems in the market for subprime seems likely, be content "

Now I feel more comfortable.

To be sure, Bernanke also said that the recovery of 2010 will be limited and that the first 2-3 years the economy will not start in a sustained manner.

Wall Street apparently still seems to believe the Fed chief . Following his speech yesterday, the index rose sharply, gaining between 3 % and 4%. Shareholders is certainly good to know that banks will not be nationalized and that the government will continue to lavish aid but will not require them for the loss of its prerogatives. Those who had bets on the downside, open to the major banks, has been forced to buy shares to close their position ( a classic short squeeze ), fearing that the statements of Ben produced an increase in stock prices.

At a stroke the old Ben has managed to ignore market data on property values, which fell to -18.7% compared to December last year, a record low and the data on consumer confidence, too 'it fell to historic lows, settling at 25 points while analysts were expecting a level of 35. Below you can see in graphical form the trend of both indices:

He almost paradoxical that the proposed Bernanke of Zombified to indefinitely the whole banking sector, there seems to be accepted by so much excitement. I hope this is just a technical rebound. If anyone really think that going all the way Japanese is a good idea, I do not know what to say. It would almost want to drink to forget. In Italy at least, where it still seems to be fashionable. In the U.S. however, the consumption of alcohol has undergone an unprecedented collapse - as can be seen by observing the red line in the chart below:

Perhaps Americans have decided to appeal directly to something stronger. Or maybe you prefer to keep transparencies, if anything were to be attacked by a banker Zombified voracious quest for money. In such cases we must have the reflexes: using as bait the portfolio, run away, and while we pounced on the banker, to escape in a hurry trying to bring along more savings possible. Today should speak

Geithner and we will see other major surprises in store for us. Although Bernanke is expected to return to the bar, but da quel che ha detto ieri, il capo della FED sembra essere intenzionato a regalarci un film dell'orrore. Qualcosa che non potrà essere definito recessione o depressione. Qualcosa che i giapponesi conoscono bene e che in passato ho definito come: "una lunga e agonizzante Decessione ".

Spero abbiate tutti molta pazienza. Questo film pare destinato a durare ancora a lungo.

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Quiet Chaos

L'attenzione del mondo economico USA la scorsa settimana è stata monopolizzata da due avvenimenti di natura differente.

Il primo è stato lo sfogo in diretta televisiva di Rick Santelli sulla CNBC, that many have already dubbed as "the outburst of the year." Santelli from Chicago Stock Exchange, has launched a series of lively analysis of the plan announced by the Obama administration, designed to help borrowers in trouble, highlighting how it ultimately reduces to a forced withdrawal of money from the pockets of responsible persons, who have not thrown in bold investments during the years of the housing bubble, to bring them into the hands of individuals who have proved just as cautious and judicious.

At the end of his outburst Santelli, has announced its intention to organize a "tea party" in Chicago during the summer. An explicit incitement to rebellion against the government.

When an American speaks of "tea party" does not refer to a village fair with some tasting tea included, but Boston Tea Party of 1773, during which, as an extreme act of rebellion against the English Crown, the exasperated people said the attack on the ships of the East India Company, discharge into the sea carrying the load of tea. The explosion

Live Santelli has made the rounds of blogs and social networks, entering with arrogance even in traditional media circuit. So was the echo that it has produced, even to force the White House spokesman Robert Gibbs in responding to this. Gibbs has done, discrediting Santelli: advising him to drink decaffeinated coffee and a good reputation as it become clear, by the sentences handed down by it his ignorance about the law in question. In fact

Santelli is absolutely right. Even if someone can be considered an indispensable help with public money those who take out mortgages they can no longer pay, the nature of the transaction does not change. This is a huge redistribution of money taken in sensible people - who should instead be rewarded for his foresight - and given to those cicadas who preferred to risk, often lying about their financial condition, to buy homes beyond their reach. The other

event of some significance was the affair which involved Allen Stanford, a Texan billionaire cricket fans accused by the SEC to have organized a gigantic Ponzi scheme 8 billion dollars. Stanford last week has literally disappeared, forcing the bailiffs to turn up and down the U.S. territory to be able to notify him of the charges. Eventually he was caught in Virginia, but it all worked out without any arrests, that left several people puzzled. To thicken the mystery, there has been a voice that would give Stanford a direct contact with Mexican drug lords and the discovery that the financial authorities tenessero eye on for some time, the Texan billionaire, but at the moment of action have been blocked by another U.S. government agency.

Dennis Kuchinich, USA and parliamentary candidate in the recent primary for the Democrats, decided get to the bottom of the matter , explicitly asking the SEC to disclose the name of the agency would have interposed between you and Stanford. The whole story seems to take on shades of film: a billionaire, a giant Ponzi scheme, Mexican drug lords, government agencies (CIA? FBI?) Acting with ulterior motives are clear. I would not be surprised to read a morning newspaper that Stanford was found dangling from a rope under the Bridge of monks blacks.

These two events, media very tasty, have overshadowed the ongoing conflict between the U.S. and Switzerland, which he sees as an object of contention UBS. This last Wednesday, had chosen to adapt to the requirements of the IRS (the Internal Revenue Service USA), requests that involve the payment by UBS, with $ 780 million in fines and surrender to the competent authorities of names of 250 customers of U.S. citizen accused of having used the Swiss bank to evade taxes. To put a spoke in the wheel in this agreement have occurred to the Swiss authorities, concerned about the impact that the breach of banking secrecy might have on the main industry del paese. L'UBS si trova ora in una terribile situazione. Può decidere di infrangere la legge USA rifiutandosi di consegnare i nomi richiesti all'IRS e rischiando così, il ritiro della licenza per operare sul territorio americano o può decidere di violare le leggi Svizzere accentandone le inevitabili ripercussioni.

I rappresentanti del colosso bancario sono arrivati a minacciare/supplicare le autorità americane dicendo: se insistete su questa linea saremo costretti a chiudere i battenti.

Nel frattempo il partito di maggioranza Svizzero, l'SVP ha già minacciato una serie di ritorsioni nei confronti degli USA, in caso rifiutino di bloccare la loro crociata anti evasori. Alcune delle proposte prevedono: il ritiro delle riserve auree depositate in america, il blocco di ogni fondo proveniente dagli USA, il rifiuto di rappresentare gli Stati Uniti in quelle nazioni in cui essi non hanno una sede diplomatica al contrario della Svizzera (come accade a volte).

Personalmente spero che la spunti l'IRS ed i nomi vengano resi pubblici. Del resto, la pretesa Svizzera di proteggere gli evas... pardon, i propri clienti, non si inquadra particolarmente bene neppure con le dichiarazioni uscite a Berlino, dalla riunione preparatoria del G20 ed in particolar modo con quelle del ministro delle finanze inglese Allister Darling:

Il ministro delle Finanze britannico Alistair Darling, ha attaccato il segreto bancario degli istituti svizzeri, sottolineando che non si può più tollerare l'evasione fiscale, in un intervento pubblicato oggi dall'edizione domenicale di The Observer.

Darling ha sottolineato che le autorità elvetiche dovrebbero riformare le leggi fiscali e bancarie del paese per allinearsi a quelle in vigore in Europa. "Penso sia importante che ci sia la trasparenza. Nessuno sa cosa accade. Non va bene, infatti la metà dei problemi derivano dal fatto che non si sa cosa succede", ha dichiarato il ministro, citato dal quotidiano.

"E' una delle cose che la Svizzera deve regolamentare. Se intende fare parte della comunità internazionale, dovrà essere aperta", ha proseguito. "Il segreto che premette alle persone di proteggere la loro fortuna senza pagare tasse come dovrebbero, non si può più tollerare", ha insistito Darling.

I Leader del G20 se la sono anche presa con gli Hedge Funds ed i paradisi fiscali affermando di avere allo studio delle proposte per la loro regolamentazione.

Sarebbe anche ora.

Sono curioso di vedere come la prenderanno gli inglesi, che han fatto della city di Londra il veicolo preferenziale di certe entità (come gli Hedge Funds), anche grazie ad una serie di paradisi fiscali che ricadono sotto il controllo della corona (Cayman ed Isole Vergini ad esempio).

Un argomento che a Berlino non è stato affrontato neppure superficialmente - se si esclude un generico appello a raddoppiare funds available to the IMF - is the situation in Eastern Europe. The Government of Latvia is just collapsed as a direct result of the precarious financial situation of the country. The Polish currency has given some signs of recovery after the country's central bank announced an intent to intervene in the interest rate (probably Wednesday). Goldman Sachs said it had closed the lower position on the Polish and czech currency, in an announcement that sounds like translated: "We expect the situation in Eastern Europe will continue to worsen, though the current and future WordShuffle cards in the game. Since it is no longer bet on falling as shoot a corpse, there call out. "

Great volatility then, but few see a real horizon stabilization block east.

In all this mess, the ECB seems to literally not know how to get on . Trinchet did understand different ways of not being willing to act further on rates. Series measures of "quantitative easing" at the same time, are not easy to take in Europe. As you said Yves Mersch, a member of the board of the ECB at the end of January, The European Central Bank could also consider buying bonds of individual states, "but what exactly?." Another board member, George Provopoulos, 16 February showed that none all'interno della BCE avesse, a quella data, discusso della possibilità di acquistare i bond sul mercato secondario (quindi non direttamente dagli stati), cosa che secondo molti sarebbe nelle piene facoltà della banca centrale Europea.

Juergen Micheles, capo economista alla Citigroup di Londra ha riassunto bene la situazione alla BCE dicendo: "Il problema è che essi stessi non sanno esattamente cosa dovranno fare in futuro".

A quanto pare, oltre alle autorità politiche anche quelle economiche della UE non sanno bene come comportarsi. Al momento, del resto, gran parte dell'attenzione dei singoli stati rischia di venir pienamente assorbita dai problemi interni. La Germania ha da poco approvato una legge che consente la nazionalizzazione delle banche, il tutto in vista di una probabile nazionalizzazione della Hypo. In Inghilterra Gordon Brown starebbe per tentare il tutto per tutto secondo il Telegraph. Martedì il primo ministro Inglese dovrebbe annunciare l'istituzione di una "bad bank" da 500 miliardi di sterline che si faccia carico della spazzatura in pancia alle banche. Il futuro di Brown e del suo partito sono già compromessi. L'eventuale fallimento di questa ennesima scommessa rischierebbe di essere il colpo di grazia, consacrando la fine di entrambi e lasciando un unica via percorribile all'Inghilterra: la completa nazionalizzazione degli istituti bancari.

Nazionalizzazione che si rivelerebbe estremamente costosa. Alcuni analisti governativi have recently reclassified the RBS and Lloyd as public corporations, making increased the country's public debt of 1.5 trillion pounds, taking it suddenly, the significant level of 150% of GDP. It would almost want to wait for British politicians shouting from outside parliament and the cue: "PIGS who is now". Easy retaliation aside, it is clear the reason behind the almost unanimous revulsion for politicians, especially the Anglo-Saxons, have towards the end of nationalization while every economist of note the calls in a loud voice (Krugman, Roubini, Stiglitz, Wolf, etc. Rogoff ).

Who, would be forced to explain a sudden doubling of public debt to the people.

Another man who speaks explicitly of nationalization is Paul Volcker. Economic Advisor to Obama, Volcker that echoed the Soros, has raised the possibility last week that the current crisis proves worse than the Great Depression . One of the measures that would impose Volcker, provides for the separation of banks depending on the features. In other words, the second Volcker, banks should do the banks: lend money to businesses, provide silent, etc., instead of launching into speculations with mysterious financial instruments. If they had the intention should nevertheless must break into two separate institutions: one that makes a commercial bank and another in a position to speculate freely without being able to count on any government support in case of problems. Volker essentially invoke the re-establishment of the Glass Steagall Act, which provided 30 years of similar measures and that was abolished in the late 90's from such a Larry Summers (head of the National Economic Council Geithner and godfather of the 'Current Treasury Secretary). Unfortunately

Volcker's ideas appear to be in the minority within the Obama administration. Geithner and Summers are the masters and not to deny their past, bankers and lobbyists, are doing everything to save their old buddies and marginalize Volcker. Chris Dodd, U.S. Senator and head of the committee del senato su banche, edilizia e questioni urbane ha dichiarato qualche giorno fa che la nazionalizzazione di alcune banche potrebbe essere inevitabile per un breve periodo. Il governo USA è dovuto subito correre ai ripari smentendo indirettamente Dodd e affermando che: "mantenere le banche private sia la corretta via da seguire".

A questo proposito vi consiglio di leggere un interessante post di Yves Smith, la quale alla fine di un lungo ragionamento arriva a concludere: la nazionalizzazione delle banche è il minore dei mali. Operazioni come quella della "bad bank" di Gordon Brown sono molto costose, non fanno chiarezza sui bilanci degli istituti e garantisco poco controllo sull'utilizzo che the banking system will make the money received. Although as a result of nationalization, the states would see a temporary rocketing its debt, through it, it could quickly clean up balance sheets, throw light on the condition of the various banks and be assured that public money does not end completely sucked in by those potholes blacks that some of them have become.

Fast action and clarity is what the market would need.

Instead we continue to keep alive the zombie without decisive action on the problem. A good example is Citi. Apparently the moribund giant, is in discussions with politicians about the possibility that il governo, in un disperato tentativo di ricapitalizzare l'istituto, arrivi a farsi carico del 40% delle sue quote azionarie . Il tutto dovrebbe avvenire attraverso la conversione delle azioni privilegiate in azioni normali, in concomitanza con un aumento di capitale da parte di Citi, attraverso un offerta pubblica di azioni, fermo restando una quota pari al 40% in mano del governo. Si tratterebbe quindi di una semi nazionalizzazione, un ennesima farsa che spero verrà rigettata da Obama.

Che le nazionalizzassero una volta per tutte e la facessero finita.

Mentre i politici tentennano incerti sul da farsi, l'economia non sta certo ferma ad aspettarli.

Mario Draghi ha lanciato un suo personale warning:

The effects on employment are not yet fully known, the indicators available for more recent months prejudge deteriorated markedly. "" The fall in demand could hit with particular intensity in the weaker and less protected, the temporary workers, young people, families with low incomes. "

on alert in the number of Bank of Italy comes a remote replication Tremonti. What a conference in Aspen says that" the government has long maintained that the terms could and should issue: a few days ago we signed an important agreement with the Regions on social safety nets, we believe we have seen the phenomena in time and managed to have them in the best way. "

Even Dragons finally noticed it. As I said in the forecast beginning of the year in September and October we will begin to really realize how heavy the crisis. Tremonti security flaunts its part, also of strong ' approval by the European Commission of its "bond Tremonti." It is € 10 billion that the state is willing to grant to Italian banks, in exchange for bonds whose returns vary depending on the duration of the latter. The main suspects in the exploitation of this option are obviously Unicredit and Intesa. especially the first, given the high exposure that it holds against the countries of Eastern Europe. When asked to regard, the head dell'Unicredit Alessandro Profumo said:

I 'Tremonti bond' "is an opportunity." So said, the day after the go-ahead from the European Commission, is the CEO of Unicredit, Alessandro Profumo. "For the government is a bell'investimento. For us - Profumo said on the sidelines of Forex - is insurance. It must however be seen as an 'salvabanche' but are used to provide capital to grow the jobs."

Asked whether UniCredit intends to use these tools, Profumo replied: "We must look to the composition of our group. We have a significant risk group at Bank Austria. We must valutare l'intervento dell'Austria e poi dove c'è un rischio percepito...".

Tanti giri di parole, ma salvo miracoli, l'Unicredit finirà col ricorrere a questi bond.

Tornando infine agli Stati Uniti, Hilary Clinton, nuovo ministro degli esteri ha effettuato la scorsa settimana la sua prima visita di stato, scegliendo come meta la Cina. Dopo una lunga chiacchierata con i politici del paese, interrogata da un giornalista riguardo all'acquisto da parte del paese asiatico dei buoni del tesoro americani, la Clinton è arrivata quasi a supplicare i Cinesi di continuare a farne incetta. I politici del paese avevano già detto pubblicamente di non aver intenzione di modificare la propria politica about it, but it is just to be become a problem for the U.S.. China in recent times seems to have a single objective with regard to its investment in pieces of paper: security. The Asian country has steadily snubbed all the products that are perceived as risky, to focus on short-term debt of the United States. At the expense has been the long-term U.S. debt securities and the two GSEs: Fannie Mae and Freddie Mac The latter in particular would suffer for a flight mass of investors. How

said Hideo Shimomura, head of investment at the Tokyo Mitsubishi UFJ Asset Management Co, the risk that there would be investing in the GSEs, would too big without an explicit guarantee of the U.S. government. In essence, the market, from China is pushing for nationalization of the GSEs clear. Do not you trust more half measures. We'll see how the U.S. will react. In case there is a formal (informally already are) the nationalization of Fannie and Freddie, it would be the largest such event ever occurred since the war on (as far as I know anyway).

For the moment, therefore, China would be willing to support the U.S. public debt and the rest as he said a Chinese economist at a conference in the U.S.: we hate you, but we have no choice. The change in the composition of the purchases, however, shows a distinct lack of trust from the Chinese on the future of the U.S. economy.

addition to avoiding risky products, China is also trying to secure a steady supply of raw materials for the near future. The Chinalco, the Chinese aluminum giant, has acquired Australia's Rio Tinto, the third global mining company and it seems that the China Investment Corporation and China Shenhua Energy want to do the same with another mining company in the country, Fortescue Metals. Acquisitions in this aggression has caused several complaints from the Australian population, but faced with the collapse of global demand for raw materials, these companies appear to have few options available in addition to selling to the highest bidder.

The big one though, the Eastern country has done by signing an agreement with Russia by 25 billion dollars in exchange for a steady supply of oil. A wedding is almost inevitable for economic reasons and geographical proximity. As the Financial Times wrote: "China has what Russia wants: the masses of dollars. Russia has what China wants: power." A similar agreement for 10 billion dollars was signed with Brazil's Petrobras.

Ultimately, the Chinese are making low-cost shopping around the planet, while the U.S. pledged to give money to those institutions of its zombies, begging at the same time - through a political che porta lo stesso cognome di un tizio che con la Cina faceva la voce grossa - il paese orientale perché continui ad acquistare buoni del tesoro statunitensi.

"Karma is a bitch!" direbbero in inglese.

Non che la Cina stia bene, per carità. Tutt'altro, ma i cinesi almeno hanno a disposizione del denaro vero e lo stanno usando con un minimo di giudizio.

Intanto negli ultimi giorni, alcuni analisti sembrano aver tratto conforto dal fatto che l'est Europa non sia ancora collassato e dal dato positivo sull'inflazione americana - +0,4% nell'ultimo mese - che di positivo non ha nulla in realtà (i dati sulle materie prime e sui semilavorati indicano deflazione. In sostanza le aziende stanno aumentando il final price of products in an attempt to increase their margins, the exact opposite of what happened last summer while galloping inflation), as if they felt that the absence of a significant collapse is proof of the strength of the economic system and effectiveness of certain government actions.

seems to me that things are moving, and much faster than it appears at first sight. The events of recent weeks are like so many "small" earthquakes, and I doubt they are settling. The impression is of a great chaos. Calm on the surface, because of the lack of a traumatic event can catalyze, but deep down hatching something a little funny. In the middle ad esso si muovono politici ed economisti che sembrano non comprendere, quanto questa apparente calma possa essere ingannevole e fuorviante.

Si danno appuntamento per decidere il da farsi con comodo, ad Aprile durante il G20, con il rischio che finisca come l'ultimo G20 che venne ribattezzato: "la riunione che stabilì un'altra riunione". Quando agiscono invece, adottano delle misure che non posso che definire insufficienti, come la "bad bank" di Gordon Brown.

Mi auguro seriamente che questo caos sia molto più calmo di quel che penso e che tutto il tempo che sembrano perdere i suddetti politici porti loro consiglio.

In caso contrario...beh, meglio non pensarci.

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A small clue

The debate about Europe's future is beginning to monopolize the attention of a growing number of analysts and commentators. As has been said many times in this blog, all born from the shaky condition of the European banking system and its exposure to the republics of the Soviet Union.

Yesterday the two main lists Russians were suspended for excess downwards. The event occurred after the sudden collapse of oil prices (the share of crude fell below $ 35 a barrel) and the worsening weather on the country's economic future. Also yesterday, the Polish government finally announced its intention to intervene in support of the local currency . The thing was in the air for some time. A worry is the debt to the Polish authorities that the private sector in the country in recent years has contracted in foreign currency. Not so much of families, which although showing exposed in this way, in their small managed to preserve some moderation in borrowing money, as that of the corporate sector. Polish companies were not as cautious and diversity are at risk of failure in the event of a further weakening of the zloty , the Polish currency, which yesterday arrived at the slightest touch from 5 years to this part against dell'euro.

Ciò che però, ha spaventato gli investitori di mezzo mondo ed ha prodotto il crollo delle borse Europee, colpendo con particolare violenza quella Austriaca (-8,62% ieri), è stato il rilascio da parte di Moody 's (e successivamente di uno simile della Standard & Poor 's) di un rapporto che annunciava un probabile futuro downgrading di quegli istituti bancari Europei che vantano un alta esposizione verso i malmessi paesi del blocco est. L'avvertimento di Moody 's ha scatenato il panico, facendo fuggire gli investitori dalle borse del vecchio continente and that the euro has decreased by 1, 5% against the dollar. The

compromised situation in Europe is also reflecting on the value of gold. Tuesday it has broken several times the highest against the euro. The reasons for these increases are very different from those that brought the yellow metal to touch $ 1,030 an ounce last summer. If at the time its value went hand in hand with that of other raw materials, now it seems to have fully released leading a race of its own. In essence, the hunt for gold is born of bubbles, speculation or the demand for those who really need the precious metal (jewelry, etc.). The increases would be the product a wave of purchases by investors seeking a safe haven in a time of great economic uncertainty, in which the strength of Europe and the euro currency, which many believed to be a viable alternative to the dollar, are seriously put into question . They WOULD BE of gold like so many shipwrecked sailors clinging to a buoy.

Meanwhile politicians of European countries living in conditions worse than they are trying to calm people in every way. The Irish finance minister has warned investors from drawing hasty conclusions about the soundness of the country based on the value of cds (whose value has reached the 386 basis points Tuesday, the highest in Europe) . That English has vehemently denied that there is any possibility that his country declared default and the Greek Minister for the Treasury said annoyed, a few days ago that recent increases demanded by the market rate of interest paid by bonds of Greece would completely unjustified.

statements that seem to convince a few. The situation seems to be quite worrying to have finally pushed a politician of great importance, as the German Finance Minister Peer Steinbrueck to discuss . Steinbrueck acknowledged the difficulties some of which cross 16 Euro zone countries and especially those in Ireland that he thinks "would be in a very difficult situation." Breaking a taboo that comes from the Maastricht Treaty that it would be forbidden, as never fails to remind the ECB , any possibility of saving a state from the rest of the union, the German minister said that "In reality, other states will rush to rescue those who find it difficult to find."

For most economists the possibility of a disintegration of the euro does not seem even to be taken into account. From an article by Bloomberg :

"There will necessarily be some kind of package of support for some of the smaller economies in order to avoid tensions and speculation about a possible break-up," said Ken Wattret, economist at the old course BNP Paribas SA in London . "The great national governments will say this is not our problem. But when the nodes will be laid on the need to provide some kind of financial support"

According Juergen Michels, an economist at Citigroup Inc . di Londra "Gli stati membri stanno lavorando duramente ad un preventivo "salvataggio di fatto" per cercare di evitare di testare la regola del "nessun salvataggio" imposta da Maastricht.

Le dichiarazioni di Steinbrueck sembrano andare in questa direzione e rappresentano il primo piccolo indizio sulla strada che la Germania ha intenzione di imboccare, per affrontare la spinosa questione di un eventuale salvataggio degli stati che in Europa, versano in gravi condizioni finanziarie. I tedeschi parrebbero quindi manifestare la disponibilità a pagare un certo prezzo per il mantenimento della stabilità dell'intera Unione ed alcune timide indicazioni in this sense WOULD BE starting to come also from France.

Intentions aside, many questions remain unanswered. As rescue and Eastern European states like Ireland, Spain, Greece come to cost? And as France and Germany can realistically afford to pay for this?

All questions that probably will be answered very soon, if the situation does not improve significantly.

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In good hands (italian version)

air of Davos a funny thing. From the beautiful Swiss city in which each year hosts the long-awaited summit of bigwigs of politics and the world economy, Pritchard, the financial journalist's leading Telegraph, he wrote ten days ago, an article that seemed unusually optimistic ventilate a possible resumption, entitled: " Glimmers of hope (glimmers of hope ). His players do not recognize more than usual, went on a rampage, and loudly demanded to know what they did smoke (or drink) in Davos . Pritchard had to justify himself and did so revealing as the positive tone of his article did not reflect his own opinion, but on this occasion had been forced to wear his "hat as a reporter and felt reassured by their readers: "no hope of economic recovery is on the horizon."

recent articles he has written, brutally illustrate this vision.

Pritchard has never been a lover or a pro-European. What emerges clearly from his writings. Yet, considering what they have read your articles in detail the development of events on the landscape of the global economy, not paying attention to what he writes would be unwise. In his latest piece, the reporter of the Telegraph , returns on European issues. The title is emblematic: " fail to save the Eastern Europe will collapse world." I wrote

diverse volte di quanto la situazione dei paesi dell'est Europa sia fondamentale per il futuro dell'Unione stessa e dell'area Euro in particolare.

La scorsa settimana il ministro delle finanze Austriaco cercò freneticamente di mettere insieme un pacchetto di aiuto economico da 150 miliardi di euro, per i paesi dell'est . L'obbiettivo dichiarato non era tanto il salvataggio di quei paesi, quanto la sopravvivenza dell'Austria stessa, dato che le banche del paese hanno investito nell'est Europa una cifra compresa tra il 70% e l'80% del PIL Austriaco, pari a circa 290 miliardi di euro e rischierebbero seriamente la bancarotta in caso di fallimento delle repubbliche ex sovietiche. Si parla dei maggiori istituti della nazione. La Erste Bank, Raiffeisen and also the largest bank of all: the ' Unicredit.

The last quarter Austria, because of a drop in exports, earned the first contraction in GDP of 8 years now. For the moment, it is estimated that the country's GDP will contract by a modest 0.5% in 2009, but am willing to bet that the forecasts will be revised downwards, whereas the export boom that hit the country in biennium 2006-2007: direct exports to third in Germany and another 20% in emerging countries of Eastern Europe. Now Germany has reduced dramatically both production and imports, while the eastern countries are simply collapsing.

Austrian politicians to try to plug the loopholes in the financial sector in recent months have repeatedly announced its intention to grant up to EUR 100 billion of obligations of banks. A final agreement, however, was never reached because of squeamishness the banks themselves who would impose unrealistic conditions the Austrian government. The situation in Austria is becoming increasingly tense. Any form of assistance to the banking sector will impact severely the country's indebtedness. According to a report of the Cabinet Committee on the debt, the bank rescue would come at cost to Austria that triple-A rating of which enabled the last decade, to finance its debt by paying an amount in line with that paid out by the German state.

The funny thing is that the Austrians seem confident that Germany will run to their aid financially, given the close historical and economic ties linking the two countries. The Germans for their part are surprised that the Austrians nurture this belief. It does not seem, however, be only Austria to wait for the big arrival Svolacchia Germany to the rescue, wearing a ridiculous blue tights and red cape. A Article of Times Online casts dark shadows on the Irish situation. loans issued by Irish banks amounted to 11 times the size of its economy. The cost of cds 5 years, a financial instrument that provides an indication of the country risk, has tripled in the last week and touched the 350 basis points last Friday (the highest in Europe). The market short , always seen as more likely a future default Ireland and also in this case, the Times , invoked as the savior of the situation, Germany. It should be charged according to the British newspaper, part of the debt of Ireland, by purchasing treasury bills, through a bear fund (currently studying) set up by the ECB .

Apparently in the old continent, everyone seems to expect the Germans saved the entire Union.

In this regard, the article in the Telegraph says

L 'Europe is already in more serious problems than the ECB or leadears of 'EU had expected. The German economy is contracted at an annual rate of 8, 4% in the fourth quarter. If

Deutsche Bank right the economy will shrink by about 9% before the end of this year. The kind of level that would ignite a popular revolt.

The implications are obvious. Berlin will not save Ireland, Spain, Greece and Portugal, while the collapse of the credit bubble leads to an explosion of defaults , Italy or the EU for accepting the plans of " bond of union ' if the debt market were to take the terrifying trajectory of rising Italian government debt (which 'll have 112% of GDP next year, according to the latest forecasts, up by 101% - a huge change) and not save Austria from Habsburg's adventurism.

In essence, they will most likely (as it should be), our cavolacci .

Eastern Europe is imploding.

In Ukraine it is expected that GDP will fall by 12% during the year, the Latvian economy has been declared clinically dead by the central bank governor after a decline of 10.5%, the Hungarian government officially provides a contraction in GDP of 1% per year in corso, ma diversi analisti ritengono più probabile che essa si assesti tra un -2%/-5% e in generale sull'intero blocco est grava quella spada di Damocle dell'indebitamento contratto in valuta straniera. Il 60% della popolazione polacca, ad esempio, si è indebitato in franchi svizzeri. Ogni traumatico indebolimento delle valute locali, produrrà un aumento in termini reali dell'entità del debito ed un aggravarsi delle condizioni economiche generali.

Dato che l'Italia è particolarmente esposta ad un tracollo dell'est Europa, tramite il suo settore bancario - si parla in particolar modo dell' Unicredit - sarebbe molto interessante conoscere la linea di azione che il governo intends to adopt in case of possible problems.

This kind of question has been asked to Davos, by a British journalist to our Finance Minister. A music video made the rounds of the network shows a Tremonti that in response, gets up and walks away angrily without uttering a single word , leaving BBC journalist completely astonished with the microphone in half 'air. The poor man was not accustomed to Italian politicians. Shines from his eyes to the wonder that behavior would be considered obviously abroad incredible (if by chance you have not already done so beware The video ).

Nobody can force another person to answer a question, but there are different ways of behaving. It would be enough to say: "I prefer not to deal with the subject" or dodge the question by saying "we have prepared the appropriate measures, but I'd rather not discuss this bla bla bla . The question was entirely legitimate and I think it would be nice to know if Tremonti did to us poor people, how it will behave in case of significant banking problems.

If the block East collapses el ' Unicredit is to beat cash from mom was that you?

The money we give the example of American? The nationalized institution? The semi-nationalization as they have done with the British Royal Bank of Scotland ?

guess that the answer will a surprise for when the event occurs, but the reaction annoyed Tremonti raises fears that a real plan of action simply does not exist.

The real gem though, our Minister at Davos had already made in 2006 and against an old friend of this blog: Nuriel Roubini .

Both were were invited to a public debate about the future of Europe. The topics to be addressed were numerous: the risk that the current crisis could break up the Union, which countries were most likely to exit from the EU, the consequences of a possible dissolution, etc.. After a bit 'in relation to these digressions, from politicians to the present discussion, Roubini took the floor and starts, in his academic style, to give an overview of the situation in the countries of the continent, until it comes to describing that Italian, comparing the slope that the "beautiful country" has taken to that which characterized the Argentine collapse.

A comparison that I should jump in the eyes of every sensible person who knows at least half the events that led Argentina to the failure.

At that point between the general consternation, Tremonti interrupted considerations Roubini arguing with an incontrovertible "go back in Turkey."

First, we must say that Roubini has never been afraid to say what he thinks, even when his claims were found in contrast with the predictions of the entire economic establishment. Second, although born in Turkey , Roubini has lived 20 years in Italy and graduated from the bites. When he speaks of this country makes him a reason.

response Tremonti sums up the attitude of the classic Italian politicians, with a subtle irony that attitude seems reminiscent of that held by their namesakes Argentina during the period that preceded the collapse of the South American country. The

not responding to anyone, and that presumption quell'arroganza in ways that seem to arise from a sense of superiority ed intoccabilità, la completa mancanza di un reale dibattito su certi temi, le continue distrazioni su questioni secondarie, sono tutte indice di un degrado che in questo paese sembra aggravarsi ogni giorno che passa. Gli scenari che Roubini illustrò al dibattito, prevedevano per l' Italia solo due possibili futuri: cambiare velocemente o uscire dall'Unione Europea dichiarando default sul proprio debito (in sostanza il fallimento). L'UE a suo dire sarebbe conveniente, ma solo per i paesi disposti a riformarsi seriamente, non per i paesi intenzionati a mantenere lo status quo.

Osservando l'Italia ancora oggi, non vedo nessuna reale volontà politica di riformare il paese. Il Pd continues to speak of "great reforms" (whatever they are, will surely be my fault, but I have not understood what they mean) a bit 'as Linus spoke of the "Great Pumpkin" and how in the case of Linus seems to be willing to wait for these reforms, the n a pumpkin patch with his thumb in his mouth and a blanket close to his chest (actually in the English version Linus waiting for "the great pumpkin "but let the beat).

The majority seems to deal with Tutt 'else. Every now Berlusconi shoot a number, on some possibile intervento economico, cifra che sembra cambiare di volta in volta quasi ad assecondare considerazioni a noi ignote come variazioni dell'umidità atmosferica. Per ora, a parte fregnacce come la social card, e gli aiuti per comperarsi la lavatrice o un altra auto non si è visto nulla di significativo. Se hanno intenzione di intervenire in qualche maniera per mitigare l'impatto della crisi, sarà anche il caso che comincino a farlo seriamente e che ci facciano anche sapere cosa intendano fare. Se preferiscono non intervenire allo stesso modo sarebbe carino saperlo. Dire tutto ed il contrario di tutto non aiuta certo a costruire la fiducia.

La mia sensazione è che la politica italiana abbia rinunciato da tempo a cercare di sistemare questa nazione (se mai ci abbia seriamente provato) e che si occupi semplicemente di amministrare lo status quo, cercando nel frattempo di estrarre più ricchezza possibile dal sistema. Un film già visto e dal pessimo finale.

Le riforme di cui parla Roubini sarebbero ben altre e bene o male le conosciamo tutti. Ridurre l'eccessivo peso economico della politica e della burocrazia, aprire l'accesso e creare una vera concorrenza in certe professioni, arrivare a premiare le persone in base ai loro meriti e non alle conoscenze che possono vantare, riformare la giustizia (riformarla davvero, non legarle le mani per paura che i propri crimini vengano scoperti, il costo economico di una giustizia che non funziona è altissimo), riconvertire la base industriale del paese su un altro tipo di produzioni (tradotto: non metterti a fare concorrenza alla cina su produzioni di basso livello) ecc ecc.

Banalità se vogliamo, che sentiamo ripetere da...beh, da che mi ricordo francamente, ma che non ho mai visto affrontare seriamente. Ed il tempo, grazie anche a questa crisi sta per scadere.

In una bella intervista rilasciata alla PBS , il canale pubblico americano, l'ex capo economista dell' FMI , Simon johnson, discouraged compares the U.S. situation to that which has been observed in some third world countries during the occurrence of economic crisis. He sees the nation in the hands of a group of oligarchs, in league with government circles that prefer to adopt measures that go for their own benefit rather than benefit the whole country (it always has been part of the United States, the crisis has simply made the visible problem in the eyes of most observers distracted).

The Italian situation appears similar to that described by Johnson only 20 times worse.

Many consider it probably the shot that made Tremonti nei confronti di Roubini una sciocchezza senza importanza. Del resto se ne sentono tante ogni giorno. Eppure mi pare emblematica di una deriva che avvolge l'intera nazione e che si riflette nei modi e nel linguaggio della politica e quando si scontra con il resto del mondo si rivela nella sua drammaticità. A volte una semplice frase o un atteggiamento nel contesto giusto (o sbagliato se preferite), riesce ad essere più chiarificatrice di mille parole. Quello che le uscite a Davos , di Tremonti , sembrano mettere in luce, è una politica in completa negazione della realtà, priva di una concreta strategia per il futuro e totalmente refrattaria ad ogni serious debate on it.

In the past I have called the U.S. into the wrong hands, to describe the Italian situation I'm frankly running out of adjectives.

Electroshock Alzheimer's

Turbulent Union

Tuesday, while waiting full of curiosity that the American Secretary of the Treasury sorprendesse the world by pulling out of the hat an effective plan for the rescue of U.S. banks, another news broke on economic stage International shaking knees more than one analyst.

A Japanese newspaper, Nikkei, reported the sensational statements by Anatoly Aksakov the head of the Russian Association of Regional Banks. Anatoly stated that Russian banks were in talks with international creditors to restructure $ 400 billion in debt. Reading the article in the Nikkei, which seemed even the Russian state could be at risk of Default. Quick as lightning came the contradicted by the Kremlin:

The Russian government has denied it to be considering a plan to restructure the debt on the private sector and to be treating this issue with foreign banks. Indiscretion, which this morning has put pressure on the euro.

"The Government of the Russian Federation has no plans to consider the issue of corporate debt restructuring of banks and Russian companies, "he assured today the Minister of Finance Alexei Kudrin." There are no Government plans of this type. The news about negotiations with foreign banks on a restructuring plan (of course) do not reflect reality, "he said shortly before the spokesman Dmitry Peskov.

Even the Association of Regional Banks has denied that he had asked the Russian government to renegotiate the debt by $ 400 billion with international banks. Furthermore, the situation of the Russian financial system remains very uncertain. The banks have already got 50 billion dollars in aid from the government through the VEB (the Russian Development Bank) to refinance debt maturing in 2008.

The Russia despite official denials remains a watchlist. Many of the international lenders seem willing to press for the government itself is to act as guarantor for the debt of Russian banks. Russia is going through a difficult period because of international crisis and the collapse of oil prices, which has deprived the country of his primary source of revenue. The deficit for 2009 was revised upwards and it is estimated will reach to touch 9% of GDP. Capital flight has now bled the economy plunging value of the ruble. Initially, the country's political, from the top third of the world's currency reserves (600 billion dollars), did not bother too much about what was happening, considering have enough firepower on hand to meet the situation. After consuming one third of the available reserves in a vain attempt to shore up the ruble, have had to surrender. They decided to allow the devaluation of the Russian currency up to a maximum of 10% threshold above which the government and the country's banks have agreed to intervene.

Following the news released by the Nikkei, the euro has fallen against other currencies. The problem is, as usual, by heavy exposure to the Euro area banks have towards Russia and around the block east. In the chart below you can see how the banks of every European nation will be stuck with the countries of the East:

Austria, Italia, Germania, Francia, Belgio sono gli stati maggiormente esposti. Ogni scossone del blocco est si rifletterà inevitabilmente su di essi ed impatterà sul valore della moneta unica. Non sono un grande fan dell'Europa (per come è stata costituita almeno), ma mi rendo conto come nella situazione odierna sia indispensabile mantenere la compattezza dell'intera Unione. Gli screzi invece sembrano moltiplicarsi. Dopo le proteste degli operai Inglesi nei confronti di quelli Italiani e Portoghesi assunti dalla Total in seguito alla vittoria, da parte di quest'ultima, di un appalto per una raffineria in territorio inglese, ci si è messo anche Sarkozy ad alimentare le tensioni with a series of attacks some Eastern European countries:

Prague have just swallowed the latest expressions of Nicolas Sarkozy that the French industries that produce cars in the Czech Republic will then sell them in France should be "relocated ". Build factories in India to sell to the Indians, said Sarkozy would be "justified, but works in the Czech Republic to sell in France," much less. From Prague replied piqued, branding the last exit of the French president as a not so veiled attempt to enact protectionist measures.

Prime Minister Topolanek, the difficult diplomatic position of having to drive the Union europea fino alla fine di giugno, si è detto “stupito” delle parole di Sarkozy, tirando anche in ballo Lisbona. “Se qualcuno voleva rallentare il processo di ratifica non avrebbe potuto scegliere un momento e un’occasione migliori”. Il riferimento è al processo di ratifica del trattato, al momento fermo al Parlamento ceco che, dopo numerosi ritardi, dovrebbe esprimersi con un voto il 17 febbraio.

E' interessante notare come per Sarkozy sia meglio delocalizzare in India invece di farlo all'interno dell'Unione Europea (come se le auto costruite in India non potessero essere poi esportate in Europa). La ragione delle sparate del presidente francese va ricercata nel prossimo aid package that France will launch to support its auto companies, Renault and Peugeot

The package of support for the French auto industry has come under the lens European Antitrust, prompting vehement criticism by the Czech prime minister and president end of June, Mirek Topolanek. The European Commission has written to France asking for "clarifications" on the 6.5 billion aid plan for Renault and Peugeot-Citroen. This was announced by EU Antitrust spokesman Jonathan Todd. "If the French measures are not compatible with the rules on aid, then it would violate EU rules," he added. In particular, Todd said that "the obligation of recipients to invest only in France or to purchase components from suppliers in France is not compatible "with European standards.

However, "we have not reached any conclusion on the French measures. We are concerned about what we read in the press. " One point on which he insisted the President of the European Union Mirek Topolanek, who accused the government of Sarkozy of "betraying the euro project" and violate "EU rules in their statements and their actions practice . Even the President of the EU has called into question the future existence of the euro, "If member states - he said - still prefer to conduct guided by the individualistic and protectionism, while continuing to violate the principles laid down by the 'Stability and development', there is great danger that the whole project of the European single currency could sink. "

Czech Prime Minister, I think, has come even to threaten his country's rejection by the Treaty of Lisbon. An empty threat, of course, that is immediately returned as soon as tempers have calmed down. Now Topolanek, it is said to have convinced his the full support of Mr Sarkozy. If

within Europe and anti-immigration protectionist pressures seem to accumulate on purely financial side of bonds is a strange thing happens. Yesterday, an auction of German bunds with a maturity of 10 years, amounting to € 6 billion, not enough demand met: 20% of vouchers has remained unsold. It 's the second time in a row that such an event occurs, then it is not an isolated case. The first time it happened, last month, the 10-year bund offered a 3% yield, a 3.28% yesterday.

By contrast, Greece, one of the most run-down EU countries financially, on Monday posted without problems 7 billion of treasury bills, the Netherlands on Tuesday sold 6.5 billion in a good 10 years and Italy recently , ha spacciato senza problemi 12 miliardi in debito a breve termine.

Gli investitori insomma, starebbero snobbando i sicuri bund tedeschi alla ricerca di rendimenti più alti, senza curarsi di un eventuale fallimento degli stati Europei più malconci. Evidentemente ritengono estremamente improbabile che un paese all'interno dell'area Euro possa fallire veramente. Tutta questa sicurezza potrebbe nascere dalla convinzione che il resto dell'Europa, Germania in primis, interverrebbe in caso di necessità fornendo assistenza economica agli stati in difficoltà.

In un articolo sul Telegraph del 9 Febbraio, il solito Pritchard rivela un retroscena interessante:

I ministri delle finanze EU to discuss, at a breakfast in Brussels, the proposal to create some form of "agency debt" or a mechanism for the bond issue at EU level, a move seen by many diplomats as an attempt to ambush the against Germany, to force her to share some responsibility on the debt of EU countries - a real anathema to Berlin.

If Germany were to be, somehow, also called into question with regard to the indebtedness Irish, English, Greek or Italian would become perfect sense to invest in those bonds which offer a performance at the European level greater than the German bund. Merkel has always tried to avoid this possibility. He does not want to foot the bill for the other EU states. We'll see how it will be able to resist, especially when it reappeared on the horizon the specter of insolvency for the European banking sector.

Yesterday the Telegraph, has revealed the existence of a confidential report of the European Commission that would cover the toxic assets these banks' balance sheets of the old continent. The article gave figures up until yesterday, but apparently someone decided to edit it for reasons I do not know. May have been wrong or someone figures might be considered wiser not to give precise. The first article of the amendment said that the total assets of toxic in pancia alle banche Europee ammonterebbe a 16,3 trilioni di sterline (si non avete letto male). Più del PIL Europeo che nel 2008 si è aggirato intorno ai 15 trilioni di dollari. A bilancio le banche dell'Unione terrebbero complessivamente 41,2 trilioni di euro di assets (36,9 trilioni di sterline).

In sostanza quasi la metà degli assets in loro possesso risulterebbe tossica. Quante perdite si annidino realmente in questi assets non è dato sapere, ma si parla potenzialmente di centinaia di miliardi. A riguardo l'articolo del telegraph si limita a dire:

"La stima delle perdite totali su questi assets, suggerisce che le spese di budget - attuali e contingenti - per il sostegno alle banche, potrebbero essere molto elevate in termini assoluti in relazione al PIL degli stati membri" avverte il documento della commmissione Europa, visionato dal The Daily Telegraph.

L'articolo aggiunge:

Lo scenario descritto dalla commissione è significativo a causa del ruolo che gli ufficiali della UE giocheranno nel disegnare le regole per valutare gli assets "tossici" in possesso delle banche, verso la fine di questo mese. Nuove manovre per salvare le banche saranno discusse ad un summit di emergenza alla fine di Febbraio. L'UE è profondamente preoccupata dall'aumentare dello spread sui bonds venduti dai differenti paesi Europei.

Anche se non si parla (ancora) o non si vuole parlare di cifre, tutto fa pensare che la festa in Europa sia appena cominciata.

Spero siate tutti pronti per i "festeggiamenti" futuri.


PS: Di seguito riporto i passi salienti (quelli con le cifre per intenderci) presenti nell'articolo del Telegraph prima che esso fosse modificato. Prendeteli dal verso che preferite:

European Commission officials have estimated that “impaired assets” may amount to 44pc of EU bank balance sheets. The Commission estimates that so-called financial instruments in the ‘trading book’ total £12.3 trillion (13.7 trillion euros), equivalent to about 33pc of EU bank balance sheets.

In addition, so-called 'available for sale instruments' worth £4trillion (4.5 trillion euros), or 11pc of balance sheets, are also added by the Commission to arrive at the headline figure of £16.3 trillion.

Banks account for their assets in different ways. Assets put into the “trading book” have to be marked to current market values, while those in the “banking book” are loans and other assets which the institution believes it can hold to maturity. Other assets are classified as “available for sale”, which are also marked to market values.

Legal To Drive With Narcolepsy

In good hands (again)

Ogni persona aspetta qualcosa. C'è chi attende da anni che 6 numeri escano al super enalotto, chi waits with his nose glued to the window that finally stops raining, people who can not wait for someone to sit on a bench next to tell the story of his life.

The only significant event that I was waiting for today was the unveiling by Timothy Geithner, U.S. Treasury Secretary, details on economic action plan aimed at saving the U.S. banking sector. At 11 am, American, as promised Geithner took the pulpit, opened his mouth in front of a long string of microphones and in the few minutes after the ether has been able to issue a giant cloud of nothing. Everything you said you knew that already. He had spoken to the New York example Times in an article subsequently taken up and commented on by several economic bloggers. Let me point out the right post from Mish and Yves in this regard. Just in the latter end of his article quoted an e-mail to Robert Radano.

In this mail, Radano advancing his personal conviction that there is no floor.

last week of representatives of the Treasury have been presented before the Senate Banking Committee to explain the alleged plan, the same should then reveal that Geithner Tuesday, the planet itself. At the Senate committee has not been shown any draft, written proposal or document of any kind. Just the same fine talk that the world was able to enjoy today. Radano drew the necessary conclusions, "or for unknown reasons did not want to inform the Committee of their intentions or a real plan does not exist."

grants seem to have particularly appreciated the content (?) Geithner's speech. As I write Wall Street is losing more than 4%. Let's see what

exactly Geithner said:

Banks with over $ 100 billion in assets will be required to undergo a full stress test "to ensure its ability to continue to lend during a phase of severe slowdown. The government will provide "capital support for schools that need it." Geithner said that the investments of the government are designed to be a "bridge to private capital," and added that the government injections (capital ed) will lead to a greater flow of bank loans than there would be without them . The government investments made through this program will be put into a separate entity - the Financial Stability Trust - that will be created to administer the government's investment in financial institutions in the United States.

Meanwhile, it would be very interesting to know the details about how the "stress test" evoked by Geithner will be executed. If a large bank were to fail the test and ask for a outrageous amount of capital what? Would be the gift without asking anything in return as seems to be going to Geithner, dust off the toys are made with Citigroup and Bank of America again inventing a state guarantee for any future losses or just let it go? Unfortunately, when the "details" seems to have become a paraloccia or otherwise of a particular secondary importance. We should therefore wait patiently for the U.S. Treasury Department decides it wants to do (because I doubt that has made a final decision) before we make a more precise idea. Beyond this, if we stick to today's announcement, the intention seems to be to return to the infusions of cash without asking for anything od ottenere in cambio.

Pratica che ha funzionato egregiamente in passato (ironia).

Come Geithner pensi di poter indurre le banche a erogare nuovamente del credito mentre l'economia continua a precipitare, mi sfugge completamente. Gli si regala del denaro e poi si spera come abbiamo fatto negli ultimi 18 mesi che gli istituti, per una qualche forma di riconoscenza accettino di correre rischi elargendo credito a destra e a manca?

Un altro caposaldo del piano di Geithner riguarda gli assets tossici:

Il governo, tramite FDIC e la Federal Reserve, in partnership con il settore privato, cercherà di far ripartire un mercato per i pericolanti assets legati al mercato property that weigh on banks' balance sheets. Geithner said the mixed fund, public-private partnerships, which would use government funds to provide the leverage to private capital, it would take to buy toxic assets at 500 billion initially, and may increase its spending to about 1 trillion dollars.

"By providing funding that markets are now able to ensure, to help start a market for assets that are based on real center of the current crisis," said Geithner. "Our goal is to use private capital and private managers, to try to provide the market with a mechanism for the assessment of assets." He added that the structure of this program and still study.

there a term for a person who continues to adopt the same strategy again and again, hoping that sooner or later it will lead to an outcome different from that obtained in previous attempts. I'm in a good mood, so I will not explicitly write the definition. What seems to want Geithner has taken the same approach that was so dear to the old Paulson. Former Treasury Secretary Hank Paulson tried several times to make someone buy the junk in his belly to U.S. banks. We tried first with the MLEC a fund that would be created with capital investment by major U.S. banks. In it the various banks could unload with comodo tutti i titoli tossici, cambiandogli nome, per poi attendere speranzose che gli investitori privati, obnubilati dalla fumosità dell'operazione e dimentichi della reale natura di questi assest, si accalcassero numerosi davanti alle porte dell' MLEC con l'intenzione di acquistarne grandi quantità.

L'idea risultò talmente ridicola agli occhi stessi delle banche che l'MLEC non vide mai la luce. Paulson ci riprovò quasi un anno dopo con il TARP. Se risultava ridicolo pensare che i privati potessero comperare degli assets tossici, perché non lasciare che ci pensasse lo stato? Lo scoglio su cui si infransero le belle speranze di Paulson fu il prezzo. Quando denaro avrebbe dovuto scucire il governo USA per questi assets tossici? If it was just money the banks would not have taken sufficient benefit, if it was too much, spending would have appeared in the public eye and the political world as unjustifiable. In the end, unable to untangle this knot, Paulson had to resign, but merely to give more than 350 billion to the banking sector.

Geithner Now we try again. We all'MLEC 3.0 as he is known. The problem as usual is that the banks do not want to sell the toxic assets at market prices because we would lose too much money (and many are already basically insolvent). Individuals obviously do not want them to buy at prices above market levels. The conclusion that the political world (quantomeno Geithner e Paulson) ne ha tratto è stata: "il mercato sbaglia nel valutare questi assets". E per convincerlo del suo errore, Geithner vorrebbe concedere tramite soldi pubblici ad alcuni selezionati privati, abbastanza leverage per speculare su questi assets tossici, nella relativa certezza che eventuali perdite se le ingoierebbe lo stato.

Nella mente di Geithner, di fronte ai lauti guadagni che questi selezionati soggetti incasserebbero, il resto del mercato, dopo essersi rosicchiato le mani, si lancerebbe anch'esso nell'acquisto dei suddetti asset, facendone lievitare istantaneamente il valore. Si compirebbe quindi il miracolo. A fronte di una limitata spesa e garanzia da parte dello stato si verrebbe a creare un mercato per the trash. Everything for the consumption of banks that could finally do a spring clean by releasing their own budgets.

If much of the responsibility in creating the current crisis is attributable to the excessive leverage used to speculate on the dubious assets, it can actually be more sensible to offer leverage and other speculation?

Frankly, I think that Geithner would need a financial analyst and do not like that. Waiting eagerly runs out to study the structure of this new program. There will be fun, unless they surrender as he did before he and Paulson on the same obstacles.

The last major intervention Geithner announced regards to consumer credit

The government will use approximately $ 1 trillion to support lending to consumers and small businesses through an expansion of the Term Loan Facility Asset-Backed Securities (TALF). There will be an increase in the portion of loans guaranteed by the Small Business Administration and a concomitant speeding up the approval process (loan note).

Does the fact that the Government extends loans to small businesses and discuss it, the idea of \u200b\u200bextending credit to consumers simply did not make sense. With the economy is cooing with the term Depression we really want people to continue to borrow consumare? Che ne dite di cominciare a spendere soldi realmente disponibili invece di continuare a vampirizzare il futuro a forza di debiti? Magari Geithner troverebbe il concetto bizzarro, ma un tentativo in questo direzione sarebbe anche ora di farlo.

Il ministro del tesoro USA ha anche accennato alla questione dei mutui:

Geithner ha anche promesso un "esaustivo piano" che affronti la crisi dei mutui abbassando l'entità delle rate ed il tasso di interesse. Ha detto che i dettagli su questo progetto verranno sviluppati nelle prossime settimane.

Anche qua nulla di nuovo e nulla di particolarmente preciso. I tentativi fatti dalla precedente amministrazione per consentire people to renegotiate their loans or to lower the amounts have not proved particularly effective. Or the banks will not agree to reschedule or applicants did not meet the necessary requirements to obtain one with or without state support. Only a fraction of the needy has been able to benefit from state assistance on this front. Not enough to significantly affect the problem.

interest rates would, in theory, the central bank's scope, but should now be clear that there is no more independence between it and the government. Recently, the long-term interest rates, which are linked most of the loans, are rising sharply. Bernanke has threatened several times in recent months, to purchase long-term good, but never actually do it. The attempt was to be able to keep rates low to force conversation. Lately it seems that the market has sensed the bluff. He does not want more stories, wants action. If the Fed will not start, and quickly, to buy good long-term interest rates will be doomed to rise, impacting on the cost of new mortgages.

All in all, I feel I can define the pseudo plan Geithner, a colossal piece of crap. In an old movie Tom Hanks always said: "Life is like a box of chocolates, you never know what can happen." Whatever the box of chocolates da cui vengono estratti i ministri del tesoro USA, la mia impressione è che essa sia scaduta ormai da parecchio tempo.

Sarebbe forse ora di cambiarla.