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