The cold and wet weather last week was able to put myself completely KO, remove it, as well as what might be called an acceptable level of health, any push to update the Blog. Fortunately, a couple of days a questa parte, il sole si è degnato di onorarci nuovamente della sua presenza e con il caldo anche le forze sembrano essermi tornate. Non che si possa dire altrettanto dell'economia mondiale. Su quel versante il cielo rimane plumbeo e pesante, coperto da nuvoloni neri che non annunciano nulla di positivo. La scorsa settimana è stato il continuo precipitare delle borse mondiali a catturare l'attenzione generale. Sembrava quasi di essere tornati ad Ottobre scorso e sebbene l'entità complessiva del crollo sia stata meno marcata di allora è bastata a scatenare accesi dibattiti. Tutti si domandano quanto ancora manchi alla completa capitolazione e relativa fuga degli investitori dai mercati e quanto i vari listini distino realmente dal fondo.
The observed
special, called S & P 500, closed Friday at -24.33% compared with earlier this year, finding a support value to 666 (you can imagine how many jokes are turned on this fact) and recovered almost 2, 5% for the last half hour. Given the poor performance on Wall Street during the week, to successfully close the last trading day had special significance. Different people Friday during the final hours of trading, had invoked the intervention of the PPT, the divine providence of Cthulhu, or anyone else was able to reverse the decline in price lists. Apparently their prayers were answered and the indexes have had a good gallop final that brought them into positive territory.
One of the few encouraging signs in a week-long agony.
Four days ago, both the ECB and the BOE (the British central bank) cut to 0.5% the interest rate be raised to 1, 5% and 0.5%. The BOE also announced the adoption of measures of "quantitative easing", amounting to 75 billion pounds to use, over the next three months, to buy government bonds. A final attempt to increase liquidity in circulation. Many hoped that these two interventions have heartened the bags pushing them upward. The markets however, have not noticed the slightest sign of essersene.
Indeed, for As regards England, Graham Secker, strategic analyst at Morgan & Stanley, has suggested a future worse than the Great Depression by providing a 60% fall in profits - from its peak - during the years 2008-2009 , while the figure for the first 30 years settled down to a lower -57%. Last week, the profits of the S & P 500 have reached -61% from its peak, the worst result since 1871. Previous nefarious, since the term "Black Friday" refers to the September 24, 1869 (a Friday), when an angry mob attacked these banking institutions, as an extreme form of protest against the sudden increase in the price of gold caused by the fraudulent manipulation of a group of speculators and the bankers threatened to withdraw from its offices to hang onto the street of the city. An event that served as a forerunner to later depression spread between 1870 and 1873 from Europe to the USA and officially ended in the spring of 1879.
to produce negative results during the last week of trading has contributed several factors. The statements made by the independent auditors on dubious economic viability of GM, for example, have attracted some attention, re-opening prospects of bankruptcy for the giant of the auto industry, throwing into turmoil the lists. A growing number of Republican politicians Last has clamored that we face over allowing the appeal to General Motors "chapter 11," a "reorganization bankruptcy", from which they believe the company could come out sized, but more solid. The Democrats instead will oppose this course of action, convinced that GM does not have the resources to survive a Chapter 11 and that this could force the company into bankruptcy in a definitive way.
The company's situation remains fluid and uncertain of Detroit, after the leaders have persistently denied any possibility of bankruptcy.
Another blow to the morale of investors has come from bad data American employment, fell 8, 1% in February, the fourteenth consecutive month of contraction, with a total loss amounted to 651,000 jobs.
Even the FDIC, the U.S. agency that deals with winding up the failed banks (if you know English here you can see an interesting service for 60 minutes about how it operates), has discharged a nice bucket of water on ice to those who still hoped for a slow improvement in the situation, announcing that in his underpants. The private fund guarantee available to the institution and to which all banks are obliged to contribute by paying a small percentage for every dollar deposited with them, is being depleted. The responsibility is attributed to the wave of bankruptcies in recent months has hit the banking sector (17 this year alone, find the full list here). To overcome this problem the FIDC was forced to ask each institution to increase its share of contributions, triggering a small insurgency: the banking sector unimpressed. The money is short, and a maneuver similar impact on the world, especially smaller banks, taking them from 50% to 100% of revenues collected last year.
The FDIC had to surrender, giving up those gains and as always happens in these cases, had no choice but to go to beat box with the Government of the Member United, who, accustomed to shell out billions like rain, without thinking too much has graciously agreed to allocate up to 2010, $ 500 billion to the FDIC fund.
The event, however, more than any other that has terrorized the analysts was the downward spiral where you found the imprisoned General Electric. Two days away from a cut in dividends unprecedented, if not during the years of the Great Depression, the title of the industrial giant has fallen below $ 6, 11 less than the 17 that was trading just a couple of months ago . To observers worry is the condition of the financial arm of the company, GE Capital, arrived in recent years to ensure a regular, half of the revenues of the entire society and that many hide in his budgets have not been reported billions in losses ranging from 21 to 54 billion seconds Nicholas P. Heymann and Matthew Kelley, two analysts at Sterne Agee.
On Thursday, Keith Sherin, CFO of the company, denied the microphones in front of CNBC - TV channel owned by GE itself - each about potential economic problems from the company stating that the money that it has cash at hand, would amount to 45 billion dollars, enough to face any ordeal markets can throw at him. The title has risen slightly in the days following the exit della Sherin, superando venerdì i 7 dollari. Eppure, molti continuano a manifestare un certo scetticismo. Troppe volte hanno ascoltato assicurazioni televisive da parte di CEO e CFO sulla condizione di grandi società, poco prima che queste fallissero. I ricordi della Bear, della Lehman, dell'AIG bruciano ancora, come delle ferite aperte.
Tutti attendono che venga fatta un po' di chiarezza sulla situazione finanziaria della GE e confidano in una presentazione che i vertici dell'azienda hanno promesso di fare la settimana del 16 Marzo, per illustrare agli analisti con dati precisi, lo stato di salute del colosso industriale.
Intanto, secondo Karl Denninger , la GE assieme ad altre società tutto sommato sane, come la Berkshire Hathaway, sarebbero sotto attacco da parte degli speculatori. Questi ultimi, sfrutterebbero i CDS per scommettere al ribasso su determinate azioni, aggirando così, ogni controllo e supervisione esistente - i CDS sono degli strumenti non regolati. Un giochino che permetterebbe di colpire un qualunque titolo, scatenando una spirale discendente sul suo valore.
I CDS sono una forma di assicurazione finanziaria. Ufficialmente dovrebbero essere acquistati da qualcuno che ha intenzione di garantirsi contro la possibilità che una certa azienda (o stato), di cui possiede delle obbligazioni, fallisca, lasciandogli in mano dei pezzi di carta senza valore.
In realtà, non è necessario dimostrare di avere bonds in order to insure. In essence, you can bet freely on the possibility that any company fails. If the failure actually occurs, those who purchased CDS will receive payment in an amount equal to that for which it was insured. A little 'as if your neighbor was able to insure against the possibility that your house to catch on fire, something forbidden by traditional insurance because, well, not exactly encourages the conservation of real estate assets (as opposed to pyromania).
Who sells CDS - in exchange for a monthly premium that every buyer will pay - generally, to hedge against the risk that the company really in question fails, play the downward sul titolo di quest'ultima, in modo da trarne un guadagno nel caso il valore dovesse effettivamente calare. Dato che i CDS sono strumenti non regolati, non esiste nessun organo preposto al controllo della solvibilità delle società che li emettono. In soldoni, tramite essi si può scommettere al ribasso su un qualunque titolo senza dover presentare significative garanzie, correndo dei rischi molto limitati e producendo una perversa spirale fatta da: calo del valore delle azioni, diminuzione del capitale disponibile, declassamento del rating, aumento del valore dei CDS per poi cominciare di nuovo da capo con l'acquisto di altri CDS ecc.
Il costo dei CDS sulla GE e sulla Berkshire Hathaway è salito alle stelle nell'ultima settimana, facendo temere che le due grandi aziende possano perdere la propria immacolata tripla A di rating. (proprio oggi Warren Buffet, leggenda della finanza e capo della Berkshire, ha dichiarato che l'economia è crollata giù da un precipizio, paragonando la crisi economica ad una vera e propria guerra che ogni patriottico cittadino americano dovrebbe combattere).
Come se non bastasse, Bloomberg ha rivelato che anche quegli individui che hanno acquistato i CDS come forma di assicurazione, spesso si trovano a sperare che l'azienda di cui detengono le obbligazioni fallisca. Diverse corporation negli ultimi tempi hanno proposto ai propri obbligazionisti di convertire parte del debito esistente in azioni comuni, nel tentativo to increase their capitalization, are often faced with a flat refusal. Normally the survival of a company should be in the best interests of those who own the bonds. When you have even the CDS however, is often more convenient to let the companies fail, in order to cash payment in the sum for which you were insured.
You are doing a great talk and then, a reality that has always been under the noses of all: the CDS are too long for a monster left free to run uncontrollably for markets around the world. And the monster is not announcing anything good. If during the period of the failure of AIG and Lehman were 75 companies su cui veniva richiesto il pagamento di un anticipo, come condizione all'emissione dei CDS - per la maggior parte compagnie finanziarie - ora il loro numero è salito a 260.
Quando un'azienda è considerata particolarmente pericolante, oltre al premio mensile, chi vende dei CDS normalmente richiede in pagamento, come quota iniziale fissa, una percentuale della somma per cui ci si vuole assicurare. Per la GE, ad esempio, la scorsa settimana veniva richiesto come anticipo il 17,5%.
Nel grafico sotto si può vedere l'aumento che gli anticipi sui CDS hanno subito negli ultimi 6 mesi, separato per i differenti settori:
Per fortuna sembra che si is beginning to talk seriously about how to manage and regulate the CDS monster. Currently four companies are drawing up proposals for the development of an effective monitoring system at the request of U.S. regulators. My impression, unfortunately, is that everything seems to be moving too slowly given the severity of the situation.
If the U.S. went through a bad week, the rest of the world things are not going particularly well. For the first time since the war forward, the World Bank has provided that the global economy will suffer a setback. The largest contribution to the economic downturn will emerging Asia, Latin America and Eastern Europe. To overcome this problem, the World Bank President Robert Zoellick, is pushing the richer countries set aside 0.7% of the money spent on economic incentives and set up a solidarity fund for emerging nations.
Zoellick should explain, however, as to 0.7% of the stimuli provided up to now be able to compensate for the destruction - according to the Asian Development Bank - to 50 trillion in value on financial assets, almost equal to GDP of the entire planet (just over 65 trillion in 2007), which would destroy its Asia and Latin America among the main victims.
And besides, even the definition of rich country is becoming un impresa elusiva.
In Europa continua l'agonia di numerosi stati: la disoccupazione in Spagna ha toccato quasi il 15%, l'Irlanda come ha scritto un giornalista "è ad una testa spaccata di distanza dalla rivolta", lo spread dei CDS sull'Austria ha toccato i 250 punti base, lo stesso livello di quelli sulla pericolante Grecia, in Germania gli ordinativi delle industrie sono crollati del 42% in Gennaio. L'Unione Europea ha annunciato oggi, attraverso il Comitato per l'occupazione e per la protezione sociale che entro il 2010 si rischiano 6,5 milioni di disoccupati all'interno del territorio UE. Per scongiurare questa eventualità ha consigliato una serie di misure che trovo francamente risibili (leggetevi l'articolo if you're curious).
Also in Italy the situation is getting worse. Tremonti from time to time, by juggling with words, try to do this: on the one hand it is clear his desire to reassure the population and the other trying not to tell tall tales too sensational. At that Berlusconi thinks that the recovering economy minister as we do with students disobbedenti, he goes around to declare :
There is no need to comment on this allegation. Mr Berlusconi said today :
Quest'anno in tutto dovrebbero venir stanziati 10,8 miliardi per le grandi opere. Se siamo fortunati di esse, ne partiranno due o tre.
Le altre saranno postponed until a later date, but even if by some miracle leave at once, as I have said many times, this is in any case of ineffective assistance, which move large capital, but little labor. As demonstrated in Japan, such measures do not work during crises like the one we are experiencing.
Summers, Geithner's godfather, for its part launched today by the White House, an appeal to the G20, to commit itself in the revival of global demand. How this question should be re-launched it is not known with certainty. Summers seems to invoke the usual and general increase in public spending as a driver capable of producing the notorious increase in aggregate demand, but Jean-Claude Juncker at the head of the committee composed of EU finance ministers, has already responded with a resounding: no thanks . Also today, the godson of Summers Geithner and U.S. Treasury Secretary, as if ashamed to show his face in public, has once again postponed the submission of details of the action plan for the financial sector. In particular, would seem to be still far from the part that provides for the establishment of a public / private sector for the purchase of toxic assets in banks belly.
will undoubtedly my fault, but still I did not understand how interventions should work in progress and those announced or rather, I can not understand a small step. To resume the vignette at the beginning of this post, all projects submitted from now - let's call them Plan A - can be summarized in three distinct phases linked together:
If the U.S. went through a bad week, the rest of the world things are not going particularly well. For the first time since the war forward, the World Bank has provided that the global economy will suffer a setback. The largest contribution to the economic downturn will emerging Asia, Latin America and Eastern Europe. To overcome this problem, the World Bank President Robert Zoellick, is pushing the richer countries set aside 0.7% of the money spent on economic incentives and set up a solidarity fund for emerging nations.
Zoellick should explain, however, as to 0.7% of the stimuli provided up to now be able to compensate for the destruction - according to the Asian Development Bank - to 50 trillion in value on financial assets, almost equal to GDP of the entire planet (just over 65 trillion in 2007), which would destroy its Asia and Latin America among the main victims.
And besides, even the definition of rich country is becoming un impresa elusiva.
In Europa continua l'agonia di numerosi stati: la disoccupazione in Spagna ha toccato quasi il 15%, l'Irlanda come ha scritto un giornalista "è ad una testa spaccata di distanza dalla rivolta", lo spread dei CDS sull'Austria ha toccato i 250 punti base, lo stesso livello di quelli sulla pericolante Grecia, in Germania gli ordinativi delle industrie sono crollati del 42% in Gennaio. L'Unione Europea ha annunciato oggi, attraverso il Comitato per l'occupazione e per la protezione sociale che entro il 2010 si rischiano 6,5 milioni di disoccupati all'interno del territorio UE. Per scongiurare questa eventualità ha consigliato una serie di misure che trovo francamente risibili (leggetevi l'articolo if you're curious).
Also in Italy the situation is getting worse. Tremonti from time to time, by juggling with words, try to do this: on the one hand it is clear his desire to reassure the population and the other trying not to tell tall tales too sensational. At that Berlusconi thinks that the recovering economy minister as we do with students disobbedenti, he goes around to declare :
crisis "exists" but "she lived on average more dramatic than that is, "and a drop in grants is due to a handful of shares." And Rai is the only state television that the U.S. government in charge. " I think not
There is no need to comment on this allegation. Mr Berlusconi said today :
"There will be situations of poverty, acute crisis, the Government is to support people less fortunate."For once I fully ' agreement with the Prime Minister. The depth and extent of the crisis depends on our behavior and especially the actions that governments take on the entire planet. In Italy over a bearci per il fatto che le nostre banche sono meno esposte rispetto a quelle del resto dell'Unione (resta il grosso ? chiamato Unicredit), viene avanzata ancora una volta la mitologica trovata delle grandi opere. Sono stati annunciati stanziamenti per la costruzione del ponte sullo stretto di Messina, opera di cui si parla da che sono al mondo (ed ho la sgradevole sensazione che quando sarò sottoterra saranno ancora li a discuterne) ed è stato promesso il completamento della Salerno Reggio Calabria per il 2012-13 (se ci credete davvero ho una torre pendente da vendervi).
"The world has experienced other crises, but also all end up like this. This crisis seems to be particularly severe - he added - but its depth and its extension in time depend on our behavior"
Quest'anno in tutto dovrebbero venir stanziati 10,8 miliardi per le grandi opere. Se siamo fortunati di esse, ne partiranno due o tre.
Le altre saranno postponed until a later date, but even if by some miracle leave at once, as I have said many times, this is in any case of ineffective assistance, which move large capital, but little labor. As demonstrated in Japan, such measures do not work during crises like the one we are experiencing.
Summers, Geithner's godfather, for its part launched today by the White House, an appeal to the G20, to commit itself in the revival of global demand. How this question should be re-launched it is not known with certainty. Summers seems to invoke the usual and general increase in public spending as a driver capable of producing the notorious increase in aggregate demand, but Jean-Claude Juncker at the head of the committee composed of EU finance ministers, has already responded with a resounding: no thanks . Also today, the godson of Summers Geithner and U.S. Treasury Secretary, as if ashamed to show his face in public, has once again postponed the submission of details of the action plan for the financial sector. In particular, would seem to be still far from the part that provides for the establishment of a public / private sector for the purchase of toxic assets in banks belly.
will undoubtedly my fault, but still I did not understand how interventions should work in progress and those announced or rather, I can not understand a small step. To resume the vignette at the beginning of this post, all projects submitted from now - let's call them Plan A - can be summarized in three distinct phases linked together:
- ensure the solvency of banks and the financial system with all the money necessary (just avoid the word nationalization) and at the same time spend a lot of money that you do not really have, in public works of questionable utility or to support ailing companies. All of course indebted states (except in rare cases, such as Chinese)
- Then a miracle occurs
- As a result, people starts to spend and consume, to flow and credit companies to produce and take
I think someone should clarify the second pass. How do you get through the existing interventions, with a recovery of the economy escapes me as to elude me is the strategy to be adopted in respect of toxic assets to the banking system in the stomach. Maybe Geithner will succeed in squaring the circle, thanks to a magnificent plan still unknown and all of Europe's go back to emerge from this dark tunnel, but the precedents I have little confidence in this regard.
even more important. What exactly is the plan B? If all found
are insufficient and the entire planet plunged into a depression of several anni o in una stagnazione decennale simile a quella attraversata dal Giappone (cosa che Roubini sembra ritenere sempre più probabile man mano che il tempo passa) che si fa?
Il Giappone restò a galla a forza di svalutazione ed esportazioni, ma se tutto il mondo è messo nelle medesime condizioni verso chi dovremmo mai esportare?
Se esiste veramente un piano B, temo che esso preveda militari in assetto da combattimento che scorrazzano per le vie delle nostre città (e non mi riferisco alla trovata pubblicitaria dei 3000 uomini messi in campo da questo governo). Nel caso, spero di non essere mai costretto a scoprire per via diretta il contenuto di questo piano (anche se non mi dispiacerebbe mi fosse illustrato a parole).
In the meantime, I just wait patiently, trusting that there is somewhere a Minister of the Treasury, a central banker or an eminent economist who want to explain what happens during the second and critical step in the plan, after slightly ' more convincing than a simple "and then a miracle occurs."
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