Three days ago an internal memo written by the CEO of Citigroup, Vikram Pandit, has mysteriously ended up in the hands of the press, making the public domain. The document riportava i dati preliminari per il primo quarto del 2009 evidenziando un netto miglioramento della situazione finanziaria dello storico istituto. Sulla base di essi, Pandit stesso, ha scritto di prevedere per la società, il risultato migliore dal 2007, nel corso dei primi 3 mesi di quest'anno.
La notizia ha infiammato gli investitori, facendo schizzare alle stelle il titolo della Citigroup salito dal 9 Marzo ad oggi di oltre il 60%. I primi a lanciarsi sulle azioni della banca pare siano stati alcuni pezzi grossi dell'istituto stesso, cosa che ha fatto avanzare ipotesi di insider trading . Non è stato però, solo titolo della vecchia C a salire come un razzo. L'intero mercato, quasi aspettasse un qualunque segnale positivo, per quanto labile o transitorio, si è riscosso lanciandosi in una lunga cavalcata al rialzo.
In effetti, era da alcuni giorni che un crescente numero di analisti prevedeva un rialzo delle borse. Quando anche dei rinomati pessimisti come Jeremy Grantham consigliano di acquistare azioni viene il concreto dubbio che il sentimento dei mercati si stia modificando.
Naturalmente risulta molto difficile dire se un fondo, anche solo temporaneo sia stato toccato. Le notizie che continuano ad arrivare da mezzo mondo non si possono certo definire positive, anche se alcuni dati risultano meno negativi di quanto gli analisti si aspettassero ed in tempi come questi, you do not throw anything away, this might be enough to cheer investors.
The rating of General Electric has recently been downgraded from AAA to AA + by Standard & Poor's and it seems that the financial arm of the group may revise downwards its estimates for the fourth year. Fitch cut its rating instead of the Berkshire Hathaway from AAA to AA. Now there are only 5 companies in the United States, not part of the financial sector to maintain the notorious triple such rating assigned by S & P, according to Michael Yoshikami, chief investment to YCMNet Advisors, soon there will remain only a "The triple-A in the final analysis, probably will be assigned only to the U.S. Treasury, when all is said and done, "says Yoshikami Bloomberg.
Moody's on the other hand, almost to want to forgive years of oversights on the ratings assigned to various companies and a range of financial products have proved after toxic, has updated his "list of death," a long list showing the names of those considered at risk of default. The companies added by Moody's to the list have been 126, bringing the total number of contacts to share 238 .
positive signals coming from the markets at the moment are fairly ambiguous. On the financial side, some banks flaunt safety. The Chairman of Citi, Richard Parson said in an interview that his group does not need further infusion of capital by the government and said it was also absolutely certain that no hypothesis of nationalization will be carried out against the bank. Ken Lewis, CEO of Bank of America, echoed the optimism of Parson revealing results in surplus in January and February and by providing for the institution, more than $ 100 billion in revenues and 50 billion in pure profit, excluding taxes, in 2009.
All these statements and positive data, such as the slowdown in the decline of retail sales in February - less than 0.1% instead of -0.4% expected - and a resumption Industrial production in China in the first two months of the year - increased by 11% only in February (although one must consider the increase in working days from the previous year due to timing issues) - thanks mainly to the economic stimulus government managed to balance the vertical collapse of exports (-25.7% in February), have heartened investors, prompting them to buy shares, especially those in the financial sector.
The real bomb, however, exploded in the U.S. yesterday, during a session of the Subcommittee on Financial Services of the room, whose agenda centered on the hypothesis to suspend or relax the rule of the budget call "mark to market", con l'obbiettivo di ridare fiato ai conti degli istituti finanziari ( qua potete guardarvi l'intera seduta se siete curiosi o siete dei nerd di queste cose come il sottoscritto). I politici del comitato a partire dal presidente Paul E. Kanjorski, hanno ascoltato una serie di rappresentati degli organi regolatori (SEC, FASB, Office of the Comptroller of the Currency) e di varie associazioni, nel tentativo di comporre un quadro più chiaro su come comportarsi nei confronti del "mark to market".
Questo sulla carta almeno. In realtà seguendo la seduta ci si rende conto velocemente, di quanto i politici del comitato sembrino odiare visceralmente il "mark to market" e di come incalzino i regolatori sulla necessità della sua sospensione. Diversi esponenti della SEC avevano in precedenza affermato di non ritenere necessario sospendere il "mark to market". Ieri il comitato della camera è stato brutalmente chiaro a riguardo, arrivando praticamente a minacciare i regolatori: "o vi muovete ed in fretta su questa questione, o vi obbligheremo noi a farlo" hanno intimato i politici.
Il "mark to market" è una regola che fu imposta in seguito al crack della Enron per evitare che altre aziende potessero ricorrere agli stessi trucchi utilizzati dall'ex gigante dell'energia, capace di portare alcune tecniche di aggiustamento dei bilanci, incentrate sull'attribuzione di valori fittizi a tutta una serie di asset, allo stato dell'arte. Sulla carta the accounts of Enron's health seemed to explode while in reality hid a tangle of losses.
"Never again!" many said after the failure of Enron. It was considered necessary to force companies to make certain budget instruments based on their market value.
companies complained a little at the set rate. During periods when the majority of assets are also appreciates the value of those accounts made salt in the same way. This helps to inflate the earnings of the company, under which are granted to management bonuses and stock options. All happy during the boom years, then: both managers and shareholders. The
problem, of course, was born when the market decided to collapse. With it fell the value of a number of pieces of paper, forcing de facto institutions to mark their losses in the budget. In this sense, the "mark to market" is defined as pro cyclical. During the expansionary phase is very popular and tends to reward excessive risk who often played with assets of dubious quality when the market is contracting tends to punish everyone, even those who do not deserve. One of the suggestions that are more mundane advanced to overcome this problem requires the adoption together with the "mark to market" of measures against cyclical. Basically, when everything goes up, it should set aside a certain amount of capital be used as a buffer in case the market fails.
a banality that Keynes also suggested to take to the states.
Unfortunately, history shows that when all goes well, most or all, spend and spreading by investing in the wrong way and when the situation falls, you go to mass at the front door of the states in search of assistance. The states on the other hand, certainly do not give a good example. They too rarely save limited, when a crisis occurs, increase their borrowing to finance various economic incentives (as long as people are continuing to lend them money at least).
Most of the problematic assets in the belly banks, then the old "Mark to model". All mortgages re-packaged for example in this category. Instruments that were traded on the market, but in the dark closet between two different subjects. Since there for them, a true market value of resorting to mathematical models to determine the price. Model that works more or less: "the assumption that house prices continue to rise, as the historical data available to us suggest, our model will give a pretty complicated piece of paper built on the calculator the value x".
When the housing market was no longer wanted to go down in dark little rooms to buy certain pieces of paper. Who created them and still had tons disposed of, then tried to sell on the market making them automatically "mark to market". The market gave them a value between ex x/20 / 3 (between 5 and 30 cents on the dollar). The panic. He shouted "stop! No longer sell that stuff."
The market value was considered too low, slashing. Nobody wanted to put the assets on the balance sheet at these prices. It was decided to pretend nothing has happened, they took most of the assets, they are transformed from a level two assets ("mark to model") in Level 3 assets, otherwise known as "mark to fantasy" and they began to budget to a set value "on the basis of non-observable. Basically everyone is inventing the price he preferred.
I problemi con gli asset di livello 3 nascono quando degli elementi osservabili fanno la loro comparsa. In altri termini quando qualcuno vende un certo tipo di assets sul mercato, rendendo palese quanto (poco) esso valga. Per poter mantenere la finzione di non aver incassato perdite a causa di questi assets, va quindi impedito che essi vengano valutati in base al "mark to market". Si sta insomma, cercando di bloccare in ogni maniera il "price discovery", una delle funzioni fondamentali del mercato perché "il price non sarebbe giusto".
Alcuni argomentano affermando che il "price discovery" non funzioni più, perché attualmente un vero mercato per certi assets non esisterebbe e come prova indicano i prezzi da liquidazione to which they are passed from hand to the past (the few times they were sold). I have always found that argument unconvincing.
The problem ultimately is that banks, hedge funds and the like, are filled with waste paper that can not and certainly do not want to assess the market price and are trying for months to obtain a suspension of "mark to market".
Looking at the debate held yesterday at the chamber of the United States, I had the impression that American politicians are planning the murder of the "mark to market" (not having done much to hide it). The form will probably remain, but will be allowed companies to ignore it whenever they consider that the price indicato dal mercato sia troppo basso. Una sottile legalizzazione del falso in bilancio.
Anche se si parla da diverso tempo di sospendere il "mark to market", fino ad ora l'ipotesi non aveva mai avuto veramente seguito. Questa volta però, i legislatori sembrano agguerriti, decisi ad agire in prima persona se i regolatori si rifiuteranno di farlo. L'intenzione pare essere, di arrivare ad una riscrittura delle regole in tempo per la chiusura del primo quarto (a fine mese), in modo da consentire a tutte le società finanziarie di "aggiustare" i bilanci e riportare risultati migliori delle aspettative.
Una manovra che sembra inserirsi perfettamente nella strategia della casa bianca di rimandare ogni intervento risolutivo il as long as possible, hoping that in the meantime there is a miracle can save us all. A coup that could bring the price lists and financial stocks touching new heights.
But the problem remains. The reality does not change the stroke of a pen, writing 100, 20 and should be written with reality, sooner or later, the accounts will be made once and for all.
La notizia ha infiammato gli investitori, facendo schizzare alle stelle il titolo della Citigroup salito dal 9 Marzo ad oggi di oltre il 60%. I primi a lanciarsi sulle azioni della banca pare siano stati alcuni pezzi grossi dell'istituto stesso, cosa che ha fatto avanzare ipotesi di insider trading . Non è stato però, solo titolo della vecchia C a salire come un razzo. L'intero mercato, quasi aspettasse un qualunque segnale positivo, per quanto labile o transitorio, si è riscosso lanciandosi in una lunga cavalcata al rialzo.
In effetti, era da alcuni giorni che un crescente numero di analisti prevedeva un rialzo delle borse. Quando anche dei rinomati pessimisti come Jeremy Grantham consigliano di acquistare azioni viene il concreto dubbio che il sentimento dei mercati si stia modificando.
Naturalmente risulta molto difficile dire se un fondo, anche solo temporaneo sia stato toccato. Le notizie che continuano ad arrivare da mezzo mondo non si possono certo definire positive, anche se alcuni dati risultano meno negativi di quanto gli analisti si aspettassero ed in tempi come questi, you do not throw anything away, this might be enough to cheer investors.
The rating of General Electric has recently been downgraded from AAA to AA + by Standard & Poor's and it seems that the financial arm of the group may revise downwards its estimates for the fourth year. Fitch cut its rating instead of the Berkshire Hathaway from AAA to AA. Now there are only 5 companies in the United States, not part of the financial sector to maintain the notorious triple such rating assigned by S & P, according to Michael Yoshikami, chief investment to YCMNet Advisors, soon there will remain only a "The triple-A in the final analysis, probably will be assigned only to the U.S. Treasury, when all is said and done, "says Yoshikami Bloomberg.
Moody's on the other hand, almost to want to forgive years of oversights on the ratings assigned to various companies and a range of financial products have proved after toxic, has updated his "list of death," a long list showing the names of those considered at risk of default. The companies added by Moody's to the list have been 126, bringing the total number of contacts to share 238 .
positive signals coming from the markets at the moment are fairly ambiguous. On the financial side, some banks flaunt safety. The Chairman of Citi, Richard Parson said in an interview that his group does not need further infusion of capital by the government and said it was also absolutely certain that no hypothesis of nationalization will be carried out against the bank. Ken Lewis, CEO of Bank of America, echoed the optimism of Parson revealing results in surplus in January and February and by providing for the institution, more than $ 100 billion in revenues and 50 billion in pure profit, excluding taxes, in 2009.
All these statements and positive data, such as the slowdown in the decline of retail sales in February - less than 0.1% instead of -0.4% expected - and a resumption Industrial production in China in the first two months of the year - increased by 11% only in February (although one must consider the increase in working days from the previous year due to timing issues) - thanks mainly to the economic stimulus government managed to balance the vertical collapse of exports (-25.7% in February), have heartened investors, prompting them to buy shares, especially those in the financial sector.
The real bomb, however, exploded in the U.S. yesterday, during a session of the Subcommittee on Financial Services of the room, whose agenda centered on the hypothesis to suspend or relax the rule of the budget call "mark to market", con l'obbiettivo di ridare fiato ai conti degli istituti finanziari ( qua potete guardarvi l'intera seduta se siete curiosi o siete dei nerd di queste cose come il sottoscritto). I politici del comitato a partire dal presidente Paul E. Kanjorski, hanno ascoltato una serie di rappresentati degli organi regolatori (SEC, FASB, Office of the Comptroller of the Currency) e di varie associazioni, nel tentativo di comporre un quadro più chiaro su come comportarsi nei confronti del "mark to market".
Questo sulla carta almeno. In realtà seguendo la seduta ci si rende conto velocemente, di quanto i politici del comitato sembrino odiare visceralmente il "mark to market" e di come incalzino i regolatori sulla necessità della sua sospensione. Diversi esponenti della SEC avevano in precedenza affermato di non ritenere necessario sospendere il "mark to market". Ieri il comitato della camera è stato brutalmente chiaro a riguardo, arrivando praticamente a minacciare i regolatori: "o vi muovete ed in fretta su questa questione, o vi obbligheremo noi a farlo" hanno intimato i politici.
Il "mark to market" è una regola che fu imposta in seguito al crack della Enron per evitare che altre aziende potessero ricorrere agli stessi trucchi utilizzati dall'ex gigante dell'energia, capace di portare alcune tecniche di aggiustamento dei bilanci, incentrate sull'attribuzione di valori fittizi a tutta una serie di asset, allo stato dell'arte. Sulla carta the accounts of Enron's health seemed to explode while in reality hid a tangle of losses.
"Never again!" many said after the failure of Enron. It was considered necessary to force companies to make certain budget instruments based on their market value.
companies complained a little at the set rate. During periods when the majority of assets are also appreciates the value of those accounts made salt in the same way. This helps to inflate the earnings of the company, under which are granted to management bonuses and stock options. All happy during the boom years, then: both managers and shareholders. The
problem, of course, was born when the market decided to collapse. With it fell the value of a number of pieces of paper, forcing de facto institutions to mark their losses in the budget. In this sense, the "mark to market" is defined as pro cyclical. During the expansionary phase is very popular and tends to reward excessive risk who often played with assets of dubious quality when the market is contracting tends to punish everyone, even those who do not deserve. One of the suggestions that are more mundane advanced to overcome this problem requires the adoption together with the "mark to market" of measures against cyclical. Basically, when everything goes up, it should set aside a certain amount of capital be used as a buffer in case the market fails.
a banality that Keynes also suggested to take to the states.
Unfortunately, history shows that when all goes well, most or all, spend and spreading by investing in the wrong way and when the situation falls, you go to mass at the front door of the states in search of assistance. The states on the other hand, certainly do not give a good example. They too rarely save limited, when a crisis occurs, increase their borrowing to finance various economic incentives (as long as people are continuing to lend them money at least).
Most of the problematic assets in the belly banks, then the old "Mark to model". All mortgages re-packaged for example in this category. Instruments that were traded on the market, but in the dark closet between two different subjects. Since there for them, a true market value of resorting to mathematical models to determine the price. Model that works more or less: "the assumption that house prices continue to rise, as the historical data available to us suggest, our model will give a pretty complicated piece of paper built on the calculator the value x".
When the housing market was no longer wanted to go down in dark little rooms to buy certain pieces of paper. Who created them and still had tons disposed of, then tried to sell on the market making them automatically "mark to market". The market gave them a value between ex x/20 / 3 (between 5 and 30 cents on the dollar). The panic. He shouted "stop! No longer sell that stuff."
The market value was considered too low, slashing. Nobody wanted to put the assets on the balance sheet at these prices. It was decided to pretend nothing has happened, they took most of the assets, they are transformed from a level two assets ("mark to model") in Level 3 assets, otherwise known as "mark to fantasy" and they began to budget to a set value "on the basis of non-observable. Basically everyone is inventing the price he preferred.
I problemi con gli asset di livello 3 nascono quando degli elementi osservabili fanno la loro comparsa. In altri termini quando qualcuno vende un certo tipo di assets sul mercato, rendendo palese quanto (poco) esso valga. Per poter mantenere la finzione di non aver incassato perdite a causa di questi assets, va quindi impedito che essi vengano valutati in base al "mark to market". Si sta insomma, cercando di bloccare in ogni maniera il "price discovery", una delle funzioni fondamentali del mercato perché "il price non sarebbe giusto".
Alcuni argomentano affermando che il "price discovery" non funzioni più, perché attualmente un vero mercato per certi assets non esisterebbe e come prova indicano i prezzi da liquidazione to which they are passed from hand to the past (the few times they were sold). I have always found that argument unconvincing.
The problem ultimately is that banks, hedge funds and the like, are filled with waste paper that can not and certainly do not want to assess the market price and are trying for months to obtain a suspension of "mark to market".
Looking at the debate held yesterday at the chamber of the United States, I had the impression that American politicians are planning the murder of the "mark to market" (not having done much to hide it). The form will probably remain, but will be allowed companies to ignore it whenever they consider that the price indicato dal mercato sia troppo basso. Una sottile legalizzazione del falso in bilancio.
Anche se si parla da diverso tempo di sospendere il "mark to market", fino ad ora l'ipotesi non aveva mai avuto veramente seguito. Questa volta però, i legislatori sembrano agguerriti, decisi ad agire in prima persona se i regolatori si rifiuteranno di farlo. L'intenzione pare essere, di arrivare ad una riscrittura delle regole in tempo per la chiusura del primo quarto (a fine mese), in modo da consentire a tutte le società finanziarie di "aggiustare" i bilanci e riportare risultati migliori delle aspettative.
Una manovra che sembra inserirsi perfettamente nella strategia della casa bianca di rimandare ogni intervento risolutivo il as long as possible, hoping that in the meantime there is a miracle can save us all. A coup that could bring the price lists and financial stocks touching new heights.
But the problem remains. The reality does not change the stroke of a pen, writing 100, 20 and should be written with reality, sooner or later, the accounts will be made once and for all.
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