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Avoid Regional Domestic Banks

zacksman — Mon, 30 Nov 2009 20:59:07 +0000

By Dirk Van Dijk
November 27, 2009

Commercial real estate is in big trouble, with rising vacancy rates leading to lower effective rents. On top of that, the Cap rate, which is sort of like the P/E ratio for stocks (or to be more precise, like the E/P or earnings yield for stocks), has been rising, meaning that investors are willing to pay less for each dollar of operating earnings.

Moody’s recently estimated that commercial real estate values are now 43% below peak levels. This has weighed heavily on the real estate-related industries, and the Zacks Industry Ranks reflect those troubles.

Out of 206 industries that we follow, Real Estate Operations now rank 180, with an average Zacks Rank of its constituents of 3.31. The ranks range from 1-5; Zacks #1 Rank stocks indicate a strong buy, which is assigned to the 5% of stocks which are most timely. Stocks which are in the 6th through 20th percentile earn a 2, with similar rules for the 5’s and 4’s.

Almost as badly viewed by the industry rank are the mortgage REITs, which are in 178th place with an average rank of 3.30. Equity REITs fare better, but not by much, sitting in 165th place with an average rank of 3.27. Individual stocks with the dreaded #5 scores in those three related industries include: Capital Trust (CT), Investco Mortgage (IVR), Ramco-Gershensn Properties (RPT) and Glincher Realty (GRT).

Generally, commercial mortgages are for much shorter terms than the 30 years associated with most residential mortgages. Five years is the standard. That means that the owners of the properties are going to have to go to the banks and try to roll over the mortgage. For the banks, this presents a problem, since they do not want to lend out more than the collateral is worth.

Owners of commercial properties are far more likely to ruthlessly default than are homeowners — after all, it’s not like their kids are going to hate them for forcing them to move away from all their friends if they just let the banks take over the property. Most banks, particularly small to mid-sized banks are far more exposed to commercial real estate than they are to residential real estate and mortgages. Even if they make a residential mortgage, they are likely to package it up and sell it off to Fannie (FNM) or Freddie (FRE ) rather than hold it in their portfolio.

As a result, the Zacks Ranks for the regional banks look even worse than the ranks for the real estate companies themselves. The 206 total industries have seven related to the regional banks, with five regional industries plus one for the major regional banks that cover several different regions. With the exception of the major regionals and the banks in the Northeast — both of which are neutral and tied for 104th place with average scores of 3.00 — the banks all look downright ugly.

The worst of the bunch, by a hair, are the Western Regional banks in 198th place with an average score of 3.64, followed by the Midwest in 197th place and a score of 3.51, the Southeast (180th place, 3.31) and the Southwest (177th, 3.29). I don’t think the differences between them are all that significant — just stay away from them all. Some of the larger names among the banks with Zacks Rank #5 scores include: Private Bancorp (PVTB), Sterling Bancshares TX (SBIB) and Peoples Bancorp of Ohio (PEBO). None of them will be mistaken for J.P Morgan (JPM) or Bank of America (BAC).

If you need to have a bank in your portfolio, it would be a good idea to look overseas. In very distinct contrast to their domestic cousins, the Foreign Bank industry is in 15th place, with an average score of 2.27. Some of the banks showing up with coveted 1 scores include major institutions like Credit Suisse (CS) and Deutsche Bank (DB). If you want a more Latin, emerging market flavor for your bank investments, consider Banco Santander (SAN) of Chile or Banco Bradesco (BBD) of Brazil.

A case to watch 09-cv-8784 S.D.N.Y.: Deutsche Bank, AG v Bank of America; Complaint Showing that there's No Honor Among Thieves (aka--in the absence of Fresh Carrion, The Vultures are starting to Feed on Each Other!)

charleslincoln3 — Mon, 30 Nov 2009 20:44:46 +0000

Printable version attached: DEUTSCHE BANK, AG, Plaintiff, v. BANK OF AMERICA, N.A. Defendant UNITED

Amazon.com Revolutionized Internet Commerce

Eric G. Young — Mon, 30 Nov 2009 14:34:07 +0000

We are knee-deep in 2009’s “Cyber Monday.” Today, tens of millions of Americans w

Chứng khoán thế giới đồng loạt tăng

vietnamgold — Sun, 29 Nov 2009 10:10:48 +0000

(GiaVang.com.vn – Giá vàng Việt Nam và Thế Giới) – Sau phiên điều chỉnh giảm nhẹ hôm 21.9, thị trường chứng khoán Mỹ đã tăng nhẹ trở lại trong phiên ngày 22.9 (kết thúc rạng sáng nay 23.9, giờ VN), góp phần giúp chứng khoán thế giới có phiên tăng điểm trọn vẹn.

Chỉ số công nghiệp Dow Jones tiếp cận gần hơn mốc 10.000 điểm đã bị bỏ quên lâu nay.

Chứng khoán thế giới mở đầu phiên giao dịch ngày 22.9 bằng một thông tin khả quan từ ngân hàng Phát triển châu Á (ADB). Theo ADB, tăng trưởng kinh tế trong năm 2009 của khu vực châu Á (ngoại trừ Nhật Bản) sẽ vào khoảng 3,9%, trong đó, các nước có kinh tế phát triển khá nhất trong năm nay sẽ là Trung Quốc, Ấn Độ và Indonesia.

Tại Mỹ, Cục Dự trữ Liên bang Mỹ (Fed) đang xem xét việc có tiếp tục duy trì lãi suất cơ bản ở mức thấp kỷ lục như hiện nay hay không. Khảo sát của Bloomberg Newscho thấy, hầu hết các nhà kinh tế học đều mong muốn và dự đoán Fed sẽ giữ nguyên mức lãi suất này (từ 0 đến 0,25%) thêm một thời gian nữa nhằm định rõ đà phục hồi kinh tế.

Trên Phố Wall, cổ phiếu của hầu hết các ngành từ ngân hàng – tài chính, công nghệ, bán lẻ tới các công ty sản xuất nguyên liệu thô đều tăng giá. Có thể kể tới như cổ phiếu JPMorgan Chase, Bank of America và Goldman Sachs lần lượt tăng ở mức 4,3%, 2,1% và 1,7%.

cổ phiếu Newmont, hãng sản xuất vàng lớn nhất nước Mỹ, tăng 1,8%; cổ phiếu Exxon Mobil tăng 0,4%; cổ phiếu Peabody Energy Corp, nhà sản xuất than lớn nhất Mỹ, tăng 5,3%; cổ phiếu U.S. Steel Corp cũng tăng 4,6%.

Tổng kết phiên, S&P 500 tăng 0,7% lên mức 1.071,66 điểm; chỉ số Dow Jones Industrial tăng 51,01 điểm, tương đương 0,5%, lên thành 9.829,87 điểm; chỉ số Nasdaq Composite tăng 0,4%, lên 2.146,3 điểm. thị trường Chứng khoán Mỹ góp phần giúp chỉ số MSCI World tăng 1,1%.

Tại châu Âu, FTSE 100 của Anh tăng 0,16% lên thành 5.142,6 điểm; CAC 40 (Pháp) và DAX (Đức) lần lượt tăng 0,3 và 0,7% lên mức 3.823,52 điểm và 5.709,38 điểm. Chỉ số HSI của Hồng Kông trong phiên cùng ngày (kết thúc chiều qua theo giờ VN) cũng tăng tới 228,29 điểm, tương đương 1,06%, đạt 21.701,14 điểm.

* Sáng nay, giá dầu thô tại New York (Mỹ) có xu hướng giảm sau khi Viện Dầu mỏ Mỹ (API) công bố báo cáo cho thấy dự trữ dầu thô tại quốc gia tiêu thụ dầu mỏ hàng đầu thế giới này đã tăng thêm 276.000 thùng trong tuần qua, lên mức 337,2 triệu thùng, lượng xăng dự trữ cũng tăng thêm 3,8 triệu thùng.

Nhưng bù lại, đồng dollar Mỹ trượt giá mạnh so với EUro khiến cho giới đầu tư quay sang chú tâm tới dầu, vàng; do đó, mức độ giảm của giá dầu không quá lớn và vẫn giữ được trên mức 71 USD/thùng.

Giá dầu thô giao tháng 11 tại Sở giao dịch hàng hóa New York (NYMEX) được giao ở mức 71,61 USD/thùng, ghi nhận lúc 12 giờ trưa nay (giờ VN); mức chốt phiên ngày 22.9 của dầu này là 71,76 USD/thùng. giá dầu giao tháng 10 chốt phiên giao dịch cuối cùng (22.9) ở mức 71,55 USD/thùng.

giá dầu Brent giao tháng 11 tại London (Anh) sáng nay cũng giảm 0,9% xuống còn 69,9 USD/thùng. Giá chốt phiên ngày 22.9 của dầu này là 70,53 USD/thùng, tăng 1,84 USD/thùng, tương đương 2,68% so với phiên trước đó.

* thị trường giao dịch vàng tại New York tiếp tục chuỗi ngày sôi động khi giá vàng lại được đẩy lên cao khi dollar Mỹ trượt giá. Tính tới 13 giờ 4 phút chiều nay (23.9, giờ VN), vàng giao tháng 12 tại NYMEX của phiên ngày 23.9 dao động từ 1.014,3 đến 1.020,4 USD/ounce. Giá chốt phiên ngày 22.9 của vàng này là 1.015,5 USD/ounce, tăng 10,6 USD/ounce, tương đương 1,05% so với phiên trước đó.

* Đồng dollar Mỹ tuột xuống mức thấp nhất trong vòng một năm qua so với EUro. Tỷ giá trao đổi giữa hai đồng tiền này trên thị trường New York vào lúc 13 giờ 24 phút chiều nay (giờ VN) ở mức 1 EUR đổi 1,4804 USD, nghiêng hơn về phía EURo so với mức 1,4790 USD/1 EUR vào cuối ngày 22.9. Cùng thời điểm trên, 1 USD đổi được 90,76 JPY.

Source: Chứng khoán thế giới đồng loạt tăng

Chứng khoán thế giới đồng loạt tăng

giavang — Sun, 29 Nov 2009 10:10:06 +0000

Chỉ số công nghiệp Dow Jones tiếp cận gần hơn mốc 10.000 điểm đã bị bỏ quên lâu nay.

Source: Chứng khoán thế giới đồng loạt tăng

Phố Wall lấy lại đà tăng điểm

vietnamgold — Sat, 28 Nov 2009 12:30:12 +0000

(GiaVang.com.vn – Giá vàng Việt Nam và Thế Giới) – Ngày 22/9, chứng khoán Mỹ đã tăng điểm trở lại trong khi nhà đầu tư vẫn thận trọng chờ quyết định của FED.

Thị trường cổ phiếu được hỗ trợ tích cực bởi thông tin Bộ tài chính Mỹ đã huy động thành công 43 tỷ USD trái phiếu kỳ hạn 2 năm, trái tức 1,034%, với khối lượng đặt mua gấp 3,23 lần số lượng chào bán – mức cao nhất kể từ tháng 9/2007.

Dow Jones hướng tới ngưỡng 10.000 điểm

Các chỉ số Chứng khoán chính của Mỹ đã tăng xấp xỉ 0,5% khi mở cửa ngày giao dịch trước bối cảnh thị trường Chứng khoán châu Á và châu Âu cùng khởi sắc.

Thị trường phiên này tiếp tục chạy trong biên độ dao động hẹp do nhà đầu tư vẫn đang thận trọng chờ kết quả cuộc họp về chính sách tiền tệ của Cục Dự trữ Liên bang Mỹ (FED). Dự kiến vào lúc 2h15 chiều ngày 23/9 theo giờ địa phương, FED sẽ chính thức công bố quyết định về hướng điều hành chính sách tiền tệ.

Sau phiên điều chỉnh một ngày trước đó, sức cầu tỏ ra khá vững chắc trong phiên này khi chỉ có một lần duy nhất Dow Jones xuống dưới ngưỡng giá trị phiên trước, nhưng sau đó đã nhanh chóng lấy lại đà tăng và duy trì mạch tăng đến hết ngày giao dịch.

Với phiên tăng điểm này, chỉ số S&P 500 đã phục hồi 58,4% so với thời điểm thị trường xuống thấp nhất trong vòng 12 năm được thiếp lập ngày 9/3/2009. Trong khi đó, Dow Jones chỉ cách ngưỡng 10.000 điểm có 170,13 điểm, tương đương 1,73%.

Cổ phiếu của 10 ngành trong chỉ số S&P 500 hôm thứ Ba đều tăng điểm, trong đó mức hồi phục mạnh nhất thuộc về cổ phiếu ngành tài chính, công nghiệp và công nghệ.

Chỉ số S&P tài chính đã tăng 2,3%, trong đó cổ phiếu Bank of America lên 2,1%, cổ phiếu Citigroup tăng 4,97%, cổ phiếu Wells Fargo nhích 3,9%, cổ phiếu AIG tiến thêm 5,4%. Cổ phiếu blue-chip khối công nghiệp, khai mỏ thuộc chỉ số Dow Jones như Caterpillar, Alcoa có mức tăng lần lượt là 3,6% và 2,3%.

Biểu đồ diễn biến của ba chỉ số Chứng khoán Mỹ ngày 22/9 – Nguồn: G.Finance.

Điểm qua kết quả giao dịch ngày 22/9: chỉ số Dow Jones tăng 51,01 điểm, tương đương 0,52%, chốt ở mức 9.829,87.

Chỉ số Nasdaq lên 8,26 điểm, tương đương 0,39%, chốt ở mức 2.146,3.

Cuối cùng, chỉ số S&P 500 tiến thêm 7 điểm, tương ứng 0,66%, đóng cửa ở mức 1.071,66.

Khối lượng giao dịch trên sàn New York đạt 1,27 tỷ cổ phiếu, thị trường cứ có 5 cổ phiếu lên điểm thì có 2 cổ phiếu giảm điểm. Trên sàn Nasdaq, khối lượng khớp lệnh thành công đạt 2,51 tỷ cổ phiếu, thị trường cứ có 5 cổ phiếu tăng điểm thì có 4 cổ phiếu giảm điểm.

Những thông tin đáng chú ý trong tuần:

Thứ Tư: FED sẽ công bố quyết định về chính sách tiền tệ, lãi suất cơ bản.

Thứ Năm: Công bố số liệu về số người nộp đơn xin trợ cấp thất nghiệp lần đầu; hội nghị G20 sẽ khai mạc; công bố số liệu về doanh số nhà đã qua sử dụng chờ bán; đấu giá trái phiếu kỳ hạn 7 năm.

Thứ Sáu: Công bố số liệu về đơn đặt hàng lâu bền; doanh số nhà mới chờ bán; kết quả kinh doanh của KB Home.

Chứng khoán châu Á chuyển biến tích cực hơn

Ngày 22/9, nhiều thị trường chứng khoán châu Á đã tăng điểm trở lại nhưng thị trường Trung Quốc vẫn giảm điểm với biên độ khá lớn.

Diễn biến của thị trường chứng khoán khu vực đã tốt hơn phiên trước đó khi có tới 3 thị trường tăng điểm với biên độ trên 1%. Thị trường chứng khoán Nhật vẫn nghỉ giao dịch nhân ngày lễ, còn thị trường chứng khoán Trung Quốc lại lạc hướng với nhiều thị trường khác khi giảm trên 2%.

Chỉ số MSCI châu Á – Thái Bình Dương (ngoại trừ Nhật) phiên này đã tăng 1% lên 393,23 điểm. Như vậy chỉ số này đã tăng được 68% so với thời điểm thị trường xuống thấp nhất trong năm được thiết lập ngày 9/3/2009.

Điểm đáng chú ý trong phiên này chính là sự sụt giảm của thị trường chứng khoán Trung Quốc trước lo ngại nguồn cung cổ phiếu mới sẽ tạo sức ép đối với thị trường. Trong nhiều tháng qua, các công ty của Trung Quốc đã chào bán lần đầu ra công chúng lượng cổ phiếu trị giá 96,1 tỷ Nhân dân tệ.

Các cổ phiếu có sức ảnh hưởng tới thị trường đều giảm khá mạnh, trong đó cổ phiếu PetroChina hạ 2,2%, cổ phiếu Pudong Development Bank mất 4%, cổ phiếu Guoyuan Securities xuống 6,7%, cổ phiếu Tangshan Iron & Steel sụt giảm 7,55%,…

Kết thúc ngày giao dịch, chỉ số Shanghai Composite giảm 2,3%, chốt ở mức 2.897,55 – mức thấp nhất kể từ ngày 7/9/2009. Như vậy, chỉ số này đã phục hồi được 59% so với đầu năm 2009. Theo số liệu của Bloomberg, hiện giá cổ phiếu trong chỉ số này đang được giao dịch gấp 32,05 lần so với mức thu nhập được công bố.

Điểm qua các thị trường khác: chỉ số Taiwan Weighted của Đài Loan hạ 0,45%. Chỉ số VN-Index của Việt Nam tiến thêm 0,84%. Chỉ số ASX của Australia mất 0,28%. Chỉ số Hang Seng của Hồng Kông lên 1,06%. Chỉ số BSE 30 của Ấn Độ tăng 0,87%. Chỉ số KOSPI của Hàn Quốc lên 1,38%. Chỉ số Straits Times của Singapore lên 1,42%.

* Thị trường chứng khoán Nhật nghỉ giao dịch nhân ngày lễ.

Thị trường	Chỉ số	Phiên trước	Đóng cửa	Tăng / giảm (điểm)	Tăng / giảm (%)
Mỹ	Dow Jones	9.778,86	9.829,87	51,01	0,52
	Nasdaq	2.138,04	2.146,30	8,26	0,39
	S&P 500	1.064,66	1.071,66	7,00	0,66
Anh	FTSE 100	5.134,36	5.142,60	8,24	0,16
Đức	DAX	5.668,65	5.709,38	40,73	0,72
Pháp	CAC 40	3.812,16	3.823,52	11,36	0,30
Đài Loan	Taiwan Weighted	7.502,46	7.469,03	33,43	0,45
Nhật	Nikkei 225	10.370,50	N/A	N/A	N/A
Hồng Kông	Hang Seng	21.472,85	21.701,14	228,29	1,06
Hàn Quốc	KOSPI Composite	1.695,50	1.718,88	23,38	1,38
Singapore	Straits Times	2.647,91	2.685,63	37,72	1,42
Trung Quốc	Shanghai Composite	2.967,01	2.897,55	69,46	2,34
Ấn Độ	BSE	16.741,30	16.886,43	145,13	0,87
Australia	ASX	4.684,10	4.671,10	13,00	0,28
Việt Nam	VN-Index	577,97	582,85	4,88	0,84
Nguồn: CNBC, Thomson Reuters, Bloomberg

Source: Phố Wall lấy lại đà tăng điểm

Phố Wall lấy lại đà tăng điểm

giavang — Sat, 28 Nov 2009 12:30:04 +0000

Dow Jones hướng tới ngưỡng 10.000 điểm

Biểu đồ diễn biến của ba chỉ số Chứng khoán Mỹ ngày 22/9 – Nguồn: G.Finance.

Điểm qua kết quả giao dịch ngày 22/9: chỉ số Dow Jones tăng 51,01 điểm, tương đương 0,52%, chốt ở mức 9.829,87.

Chỉ số Nasdaq lên 8,26 điểm, tương đương 0,39%, chốt ở mức 2.146,3.

Cuối cùng, chỉ số S&P 500 tiến thêm 7 điểm, tương ứng 0,66%, đóng cửa ở mức 1.071,66.

Những thông tin đáng chú ý trong tuần:

Thứ Tư: FED sẽ công bố quyết định về chính sách tiền tệ, lãi suất cơ bản.

Thứ Sáu: Công bố số liệu về đơn đặt hàng lâu bền; doanh số nhà mới chờ bán; kết quả kinh doanh của KB Home.

Chứng khoán châu Á chuyển biến tích cực hơn

Ngày 22/9, nhiều thị trường chứng khoán châu Á đã tăng điểm trở lại nhưng thị trường Trung Quốc vẫn giảm điểm với biên độ khá lớn.

* Thị trường chứng khoán Nhật nghỉ giao dịch nhân ngày lễ.

Thị trường	Chỉ số	Phiên trước	Đóng cửa	Tăng / giảm (điểm)	Tăng / giảm (%)
Mỹ	Dow Jones	9.778,86	9.829,87	51,01	0,52
	Nasdaq	2.138,04	2.146,30	8,26	0,39
	S&P 500	1.064,66	1.071,66	7,00	0,66
Anh	FTSE 100	5.134,36	5.142,60	8,24	0,16
Đức	DAX	5.668,65	5.709,38	40,73	0,72
Pháp	CAC 40	3.812,16	3.823,52	11,36	0,30
Đài Loan	Taiwan Weighted	7.502,46	7.469,03	33,43	0,45
Nhật	Nikkei 225	10.370,50	N/A	N/A	N/A
Hồng Kông	Hang Seng	21.472,85	21.701,14	228,29	1,06
Hàn Quốc	KOSPI Composite	1.695,50	1.718,88	23,38	1,38
Singapore	Straits Times	2.647,91	2.685,63	37,72	1,42
Trung Quốc	Shanghai Composite	2.967,01	2.897,55	69,46	2,34
Ấn Độ	BSE	16.741,30	16.886,43	145,13	0,87
Australia	ASX	4.684,10	4.671,10	13,00	0,28
Việt Nam	VN-Index	577,97	582,85	4,88	0,84
Nguồn: CNBC, Thomson Reuters, Bloomberg

Source: Phố Wall lấy lại đà tăng điểm

L'emirato ora fa paura. Il passivo può aumentare

FG — Sat, 28 Nov 2009 12:23:40 +0000

Da Il Riformista del 28 novembre 2009

Dopo il crack di Lehman Brothers, Dubai. Questo è quello che temono gli investitori. L’indice Nikkei di giovedì ha chiuso in perdita di 3,22 punti percentuali, sull’onda delle flessioni delle borse europee. Ieri il Dow Jones ha perso l’1,48 per cento. Era partita peggio, poi anche grazie al Black Friday, l’inizio dello shopping natalizio, ha contenuto le perdite. Contrariamente alle attese degli investitori, hanno guadagnato gli indici europei: Francoforte, Londra, Milano e Parigi hanno dato un segnale di fiducia verso il sistema bancario Ue. Resta un interrogativo sulla reale passività delle società controllate da Dubai World, dato che molte di essere devono ancora essere consolidate nei bilanci. E proprio su questo punto Bank of America ha rilasciato una nota in cui spiega che «potrebbe trattarsi del più grande fallimento statale della storia».
Cause. La Dubai World è una holding pubblica che controlla tutte le principali società dell’emirato, dagli immobili alla finanza strutturata. Gli asset della società sono quantificabili in poco più di 500 miliardi di dollari. Nel complesso, i bilanci hanno avuto una revisione negativa pari a 59 miliardi di dollari. Queste passività derivano in parte anche dal portafoglio titoli della società, che contemplavano cartolarizzazioni legate ai mutui subprime statunitensi. Il resto del rosso arriva dai debiti contratti per la progettazione delle maxi opere come The Palm e The World, che hanno poi venduto meno rispetto le previsioni degli analisti. A pesare c’è però il debito contratto dalla controllata Nakheel Properties, pari a 3,52 miliardi di dollari e in scadenza il 14 dicembre prossimo. Il presidente del Consiglio supremo dell’economia, Ahmed bin Saeed al-Maktoum, ha nuovamente cercato di rassicurare i mercati affermando che «sarà presa un’azione decisiva per sostenere il sistema». L’atteggiamento non è servito però a ridurre i timori sul fallimento della società pubblica. Secondo due analisti di Bank of America, Benoit Anne e Daniel Tenengauzer, non c’è la «trasparenza necessaria per comprendere a pieno l’entità del rischio di fallimento di Dubai». Per i due economisti «si sta profilando l’aumento esponenziale del rischio sistemico», capace di «bloccare improvvisamente il flusso di capitali verso i mercati emergenti a causa dell’esposizione del settore bancario europeo e statunitense».
Esposizione Usa. Sul fronte statunitense non ci sono ancora cifre precise. Le sofferenze di bilancio patite dagli istituti di credito americani a seguito della bancarotta di Lehman Brothers sono state tante e hanno destabilizzato gli investitori. In una fase di ripresa parziale dei mercati finanziari, i grandi player bancari statunitensi hanno deciso di attendere che si consolidino tutte le perdite dei Dubai World prima di comunicare dati parziali sulla loro esposizione. I mercati finanziari hanno patito meno perdite di altri. Sull’onda degli sconti commerciali del Black Friday, giorno che segna l’avvio delle spese natalizie, il Dow Jones e il Nasdaq hanno chiuso le sedute con perdite intorno all’1 per cento. Meno rispetto le attese degli analisti di Standard & Poor’s, che ieri mattina avevano ipotizzato un ripercussione pesante per i titoli bancari americani. Il timore ora è che lunedì mattina possano aprirsi le contrattazioni con elevate passività. Molto dipende dall’andamento dei futures sugli indici e sui derivati strutturati provenienti da Dubai.
Esposizione Ue. Diverso il discorso per l’Europa, che ha comunicato immediatamente di avere toxic asset dell’emirato per circa 40 miliardi di euro. A essere più colpito c’è il sistema bancario britannico, con Hsbc, Barclays, Royal Bank of Scotland e Lloyds che da sole superano i 25 miliardi. Sul fronte svizzero, colpiscono le dichiarazioni di Saud Masud, analista immobiliare del colosso bancario elvetico Ubs. «Dubito che le cifre diramate da Dubai World siano quelle veritiere», ha detto Masud. «Sono convinto che, consolidando tutte le società veicolo atte a vendere cartolarizzazioni di proprietà della holding statale, si possano raggiungere numeri ben superiori a 80 o 90 miliardi di dollari di perdite», ha ricordato l’analista a Bloomberg.
Rischi. I Credit default swap (Cds) sul debito sovrano di Dubai sono aumentati di svariati punti base nell’arco delle ultime due giornate. Secondo gli indici MarkIt, che registrano l’andamento di questo tipo di strumenti finanziari, il quadro è preoccupante nel breve termine. I Cds sul fallimento dell’intero emirato di Dubai sono aumentati del 50 per cento nell’arco di una settimana, passando da 314 punti a 645. In altre parole, non ci sono margini di assicurazione – i Cds servono a questo – per i titoli di stato emessi. Alla luce di questo, aumentano gli investitori che ipotizzano l’imminenza della bancarotta di Dubai. Il rischio d’insolvenza dell’emirato è considerato importante anche dalle società di rating, affrettatesi a ridurre il giudizio di merito. Più grave il discorso societario, in cui la holding DP World ha visto i propri Cds raggiungere quota 776, in aumento di 168 punti base su base giornaliera. E anche Dubai Holding ha raggiunto picchi d’esposizione, con un valore di 1155 punti base, in crescita di 290 punti in 24 ore. Non c’è pero solo Dubai. Anche Abu Dhabi e il Bahrein hanno visto aumentare il proprio rischio d’insolvenza, anche se non a livelli così estesi. Non a caso, gli investitori temono che l’ipotesi di un rischio sistemico possa verificarsi. E l’indice Vix, che misura la volatilità dei titoli sul mercato, ha ieri subito un aumento superiore al 4 per cento.

Đồng Yên sẽ giảm giá vào cuối năm

vietnamgold — Sat, 28 Nov 2009 10:40:08 +0000

(GiaVang.com.vn – Giá vàng Việt Nam và Thế Giới) – Mặc dù bộ trưởng tài chính mới của Nhật Hirohisa Fuiji, cho biết quan điểm không ủng hộ một đồng tiền nội địa có giá thấp, song các ngân hàng lớn trên thế giới lại cho rằng ông Fuiji sẽ phải chấp nhận điều mà ông không thích.

Trong khi đồng Yên tăng giá so với hầu hết 16 đồng tiền được chấp nhận trong giao thương quốc tế kể từ chiến thắng vang dội của Đảng Dân chủ Nhật Bản trong cuộc bầu cử hồi tháng 8, các ngân hàng lớn lại dự đoán rằng đồng Yên sẽ giảm 5,1% so với USD và 0,8% so với Euro vào cuối năm nay.

Theo khảo sát dựa trên 40 đánh giá trung gian của Bloomberg, nền kinh tế hiện tại của Nhật Bản quá yếu để có thể duy trì được một tỷ giá mạnh. Khảo sát này cho thấy, Nhật Bản có thể là nước duy nhất trong nhóm G-10 sẽ không nâng giá mua đồng Yên trong năm 2010 và duy trì tỷ lệ lãi suất thấp hơn 0,1%.

Cũng theo các đánh giá trung gian, nền kinh tế sẽ tăng trưởng 0,8% vào năm 2010, khiến các tài sản tại Nhật Bản có lợi thế hơn so với các nước có giá mua đồng tiền cao hơn.
Trong khi Goldman Sachs đánh giá đồng Yên sẽ giảm từ 92,03 Yên/USD xuống còn 98 Yên/USD và từ 124,88 Yên/Euro xuống 142 Yên/Euro, các ngân hàng khác như Bank of America, HSBC còn có những dự đoán tồi tệ hơn.

Source: Đồng Yên sẽ giảm giá vào cuối năm

Đồng Yên sẽ giảm giá vào cuối năm

giavang — Sat, 28 Nov 2009 10:40:04 +0000

Source: Đồng Yên sẽ giảm giá vào cuối năm

Dubai’s $59 billion default sends tremor through global financial system

iswekon — Sat, 28 Nov 2009 06:09:01 +0000

By Alex Messenger
28 November 2009

http://www.wsws.org/articles/2009/nov2009/duba-n28.shtml

Dubai’s announcement on Wednesday that it would be delaying by “at least” six months the maturity date of $59 billion in bonds issued by the city-state’s largest state-owned company, Dubai World, has sent global shares tumbling. The market reaction to Dubai’s massive debt default is partly explained by the exposure of European and Asian banks to DP World and its tourism subsidiary, Nakheel.

The real reason for the falls, however, is that Dubai’s apparent insolvency confirms that default by hyper-indebted government borrowers is now a real risk right across the globe, especially in the Middle East and Eastern Europe.

Such a default would not only mean an immediate worsening of the already brutal post-crash conditions suffered by millions of workers in defaulting countries, but would usher in a second, and probably worse, phase in the global financial crisis.

A note published by Bank of America strategists warned of the possibility of a major sovereign default. “One cannot rule out—as a tail risk—a case where this would escalate into a major sovereign default problem, which would then resonate across global emerging markets in the same way that Argentina did in the early 2000s or Russia in the late 1990s,” the note said.

An editorial in today’s Financial Times noted that while markets were not expected to return to the panic of September 2008, because the financial sector had state backstops, “fearful investors have started to worry about how safe sovereign debt is,” citing Ireland and Greece as two examples.

The Dubai meltdown represents only a small sum in terms of total global indebtedness. Nevertheless it indicates that despite talk of global economic recovery, the world remains on a knife-edge. Attempts at reassurance by British prime minister Gordon Brown indicate that financial and government elites are already fearful. Brown this morning acknowledged the risk that Dubai posed to the global economy but, with careful understatement, told reporters “I think we will find this is not on the scale of the previous problems we have dealt with.”

Market falls on news of the Dubai crisis were sharpest in Japan, where a number of banks (including Mitsubishi UFJ and Semitoro Mitsui) are directly or indirectly exposed. Japanese shares plummeted 3.2 percent yesterday—the market’s largest one day decline in 8 months. A 2.9 percent fall in Australia the same day reflected the fact that a Dubai World subsidiary, stevedoring company DP World, carries one third of Australia’s sea cargo. In New York, the share index opened 2 percent down and only partially recovered those losses. Forty-four billion British pounds has been wiped off the London market, the largest single day loss since March. Shares in UK bank HSBC fell 7 percent.

HSBC is reported to have lent Dubai $17 billion. Other UK banks with a Dubai exposure are Standard Chartered, Citigroup UK, Lloyds and Royal Bank of Scotland, an institution now majority-owned by the UK government, which has
received more bailout money ($67 billion) than any other bank in the world.

Dubai World accounts for three quarters of the $80 billion borrowed by Dubai’s state-owned companies to fuel the emirate’s property boom. That boom—which came to an end when property values halved in a period of weeks from October 2008—was an expression of the global elite’s fantasy of endless wealth, with Dubai’s ruling family creating a desert playground for the global rich. Its most notable features were the world’s tallest building, a giant indoor ski slope and a series of vast man-made islands in the shape of palm trees and stars. Dubai World, which manages billions in construction projects, also used its foreign borrowings to diversify into global transport, especially ports and shipping. DP World is the largest port operator in the Middle East.

It is testimony to the anarchy and irrationality of the global financial system that although the scale of the Dubai crisis has been apparent for months, the government’s default announcement still caught global markets unawares.

Banks had apparently assumed the existence of an implicit government guarantee of DP World’s debt, if not by the Dubai government, then by Dubai’s sister emirate, oil-rich Abu Dhabi. But there was no guarantee—Dubai World is a limited liability company owned by the Dubai government. The expectation that Abu Dhabi would rescue foreign investors was just idle hope.

Along with worldwide share market falls, the immediate effect of the Dubai default has been a surge in the insurance costs for national borrowings, especially by poorer countries. That cost is represented in the price of credit default swaps (CDS) on government bond issues. Greek CDS costs in particular have skyrocketed, raising fears that Greece, with public debt levels at a staggering 130 percent of GDP, will follow Dubai within weeks. CDS costs for Hungary have also soared since Wednesday, and there have been CDS price increases of about 11 percent for Malaysia, South Korea and Qatar.

These developments are by no means unforseen. Rather, the Dubai default is a lit match for ready-to-burn tinder, namely global sovereign debt levels. The key response of capitalist institutions to the global financial crisis has been to transform the toxic debts and unsustainable borrowings of private institutions into public debt via bail outs, guarantees and other stop-gap mechanisms. According to new estimates by Moody’s, the credit rating agency, the total stock of sovereign debt worldwide will have risen by nearly 50 percent between 2007 and 2010 to $15.3 trillion.

This ballooning of sovereign debt has been so fast and so immense that there is little chance of debtor governments, mired in unemployment and low growth, repaying either in the short or long term. As borrowing costs increase because of the perception of increased default risk (also called ‘long tail’ risk), the situation for indebted countries becomes worse. Global funds available for such borrowings are also drying up. While Greece, Hungary, Latvia, Estonia and Turkey are at the top of the global watchlist, default is also an eventual likelihood for the United States, which has public debts of $12 trillion. The key difference between the United States and smaller states, in this regard, is that the US is currently deemed by its bondholders, including the Chinese government, as ‘too big to fail’.

The Dubai default also pierces claims that allegedly well-managed and well-regulated national portions of the world economy can escape the effects and aftershocks of the financial crisis. Government and the corporate press have claimed that Australia, for example, is immune. But it is now likely that DP World’s Australian ports—a substantial piece of that country’s infrastructure, currently worth $1.5 billion—will have to be sold in the near future. Early reports indicate that there is unlikely to be strong interest and there may be no buyers. Few local companies have funds of that scale to invest in what is now, in the context of an uncertain future for global trade, a very risky asset.

A FINANCIAL CALL TO ARMS PART 3

realpalms68 — Sat, 28 Nov 2009 02:00:28 +0000

I’m not the only one. I’m sure at times my posts bore you when, dear reader, they pertain to the more mundane day to day issues surrounding me dealing with a huge debt load. But something else is running amuck here in the USA.
BTW, I just paid another $140 in overdraft fees to BofA. Hard earned money but fair is fair this time; instead of bitching to them, they honored my debit to Ford which came out 24 hours before my merchant account autodeposit from my friends at AMEX hit. So by honoring the payment I don’t mind the $35 charge. It’s the $35 charge for the 3 gas purchases each under $25 for gas for my car service business cars to be out doing the work that brings in the money that ticks me off. BUT such is life.

BTW, It’s impossible for me to experience ’spells’ of depersonalization when I’m raging mad. Take note, dear reader, there is probably something significant in that. I’m usually quite right about a lot of things. You’d do well to keep up with reading what I have to say. Might help someday.

Phố Wall lấy lại đà tăng điểm23 Tháng Chín 2009

vietnamgold — Sat, 28 Nov 2009 01:50:49 +0000

thị trường cổ phiếu được hỗ trợ tích cực bởi thông tin Bộ tài chính Mỹ đã huy động thành công 43 tỷ USD trái phiếu kỳ hạn 2 năm, trái tức 1,034%, với khối lượng đặt mua gấp 3,23 lần số lượng chào bán – mức cao nhất kể từ tháng 9/2007.

Dow Jones hướng tới ngưỡng 10.000 điểm

thị trường phiên này tiếp tục chạy trong biên độ dao động hẹp do nhà đầu tư vẫn đang thận trọng chờ kết quả cuộc họp về chính sách tiền tệ của Cục Dự trữ Liên bang Mỹ (FED). Dự kiến và lúc 2h15 chiều ngày 23/9 theo giờ địa phương, FED sẽ chính thức công bố quyết định về hướng điều hành chính sách tiền tệ.

Sau phiên điều chỉnh một ngày trước đó, sức cầu tỏ ra khá vững chắc trong phiên này khi chỉ có một lần duy nhất Dow Jones xuống dưới ngưỡng giá trị phiên trước, nhưng sau đó cũng nhanh chóng lấy lại đà tăng và duy trì mạch tăng đến hết ngày giao dịch.

cổ phiếu của 10 ngành trong chỉ số S&P 500 hôm thứ Ba đều tăng điểm, trong đó mức hồi phục mạnh nhất thuộc về cổ phiếu ngành tài chính, công nghiệp và công nghệ.

Biểu đồ diễn biến của ba chỉ số Chứng khoán Mỹ ngày 22/9 – Nguồn: G.Finance.

Điểm qua kết quả giao dịch ngày 22/9: chỉ số Dow Jones tăng 51,01 điểm, tương đương 0,52%, chốt ở mức 9.829,87.

Chỉ số Nasdaq lên 8,26 điểm, tương đương 0,39%, chốt ở mức 2.146,3.

Cuối cùng, chỉ số S&P 500 tiến thêm 7 điểm, tương ứng 0,66%, đóng cửa ở mức 1.071,66.

Những thông tin đáng chú ý trong tuần:

Thứ Tư: FED sẽ công bố quyết định về chính sách tiền tệ, lãi suất cơ bản.

Thứ Sáu: Công bố số liệu về đơn đặt hàng lâu bền; doanh số nhà mới chờ bán; kết quả kinh doanh của KB Home.

Chứng khoán châu Á chuyển biến tích cực hơn

Ngày 22/9, nhiều thị trường chứng khoán châu Á đã tăng điểm trở lại nhưng thị trường Trung Quốc vẫn giảm điểm với biên độ khá lớn.

Source: Phố Wall lấy lại đà tăng điểm23 Tháng Chín 2009

Phố Wall lấy lại đà tăng điểm23 Tháng Chín 2009

giavang — Sat, 28 Nov 2009 01:50:05 +0000

Dow Jones hướng tới ngưỡng 10.000 điểm

Biểu đồ diễn biến của ba chỉ số Chứng khoán Mỹ ngày 22/9 – Nguồn: G.Finance.

Điểm qua kết quả giao dịch ngày 22/9: chỉ số Dow Jones tăng 51,01 điểm, tương đương 0,52%, chốt ở mức 9.829,87.

Chỉ số Nasdaq lên 8,26 điểm, tương đương 0,39%, chốt ở mức 2.146,3.

Cuối cùng, chỉ số S&P 500 tiến thêm 7 điểm, tương ứng 0,66%, đóng cửa ở mức 1.071,66.

Những thông tin đáng chú ý trong tuần:

Thứ Tư: FED sẽ công bố quyết định về chính sách tiền tệ, lãi suất cơ bản.

Thứ Sáu: Công bố số liệu về đơn đặt hàng lâu bền; doanh số nhà mới chờ bán; kết quả kinh doanh của KB Home.

Chứng khoán châu Á chuyển biến tích cực hơn

Ngày 22/9, nhiều thị trường chứng khoán châu Á đã tăng điểm trở lại nhưng thị trường Trung Quốc vẫn giảm điểm với biên độ khá lớn.

Source: Phố Wall lấy lại đà tăng điểm23 Tháng Chín 2009

Thị trường Mỹ tăng điểm trở lại

vietnamgold — Fri, 27 Nov 2009 22:22:08 +0000

(GiaVang.com.vn – Giá vàng Việt Nam và Thế Giới) – Các chỉ số chính của thị trường leo lên sát mức cao nhất trong một năm nhờ dấu hiệu kinh tế toàn cầu hồi phục, lợi nhuận doanh nghiệp cải thiện.

Các chỉ số chính của thị trường leo lên sát mức cao nhất trong một năm nhờ dấu hiệu kinh tế toàn cầu hồi phục, lợi nhuận doanh nghiệp cải thiện.

Chỉ số S&P 500 tăng 0,7% lên mức 1.071,66 điểm tại thị trường New York. Chỉ số công nghiệp Dow Jones tăng 51,01 điểm tương đương 0,5% lên mức 9.829,87 điểm.

Chỉ số MSCI của TTCK thế giới trong phiên giao dịch ngày hôm qua tăng 1,1%.

Tất cả ba chỉ số này như vậy đóng cửa ở mức cao nhất tính từ tháng 10/2008.

Nguyên nhân chính khiến thị trường chứng khoán toàn cầu tăng điểm chính là ngân hàng Phát triển châu Á nâng dự báo tăng trưởng kinh tế châu Á, yếu tố chính khiến ADB đưa ra quyết định trên là kinh tế Trung Quốc, Ấn Độ và Indonexia tăng trưởng nhanh.

ADB dự đoán kinh tế khu vực châu Á (không tính Nhật) sẽ tăng trưởng 3,9% trong năm 2009.

Lãnh đạo 20 nền kinh tế hàng đầu thế giới, G20 sẽ nhóm họp tại Pittsburgh vào ngày 24/09 đến hết 25/09 để cùng đưa ra biện pháp ngăn khủng hoảng tài chính kinh tế tái diễn, đảm bảo đà phục hồi của kinh tế thế giới.

Nỗ lực của chủ tịch FED trong việc hỗ trợ kinh tế tăng trưởng có thể bị cản trở bởi mục tiêu khôi phục hoạt động ngành ngân hàng.

Ủy ban thị trường mở của FED sẽ nhóm họp 2 ngày, theo dự đoán, Ủy ban dự kiến sẽ tiếp tục duy trì đánh giá rằng tín dụng ngân hàng chặt chẽ đang cản trở tăng trưởng kinh tế.

cổ phiếu nhóm ngành tài chính trong phiên giao dịch ngày hôm qua tăng 2,3%, mức tăng mạnh nhất trong 10 nhóm ngành và đẩy cổ phiếu nhóm tài chính lên mức cao nhất tính từ tháng 11/2008.

cổ phiếu JP Morgan Chase tăng 4,3% sau khi Bank of America nâng triển vọng lợi nhuận của ngân hàng.

Cổ phiếu Newmont Mining và Exxon Mobil tăng khi giá kim loại và dầu thô tăng.

Cổ phiếu Caterpillar tăng 3,6% do dự đoán nhu cầu hàng hóa sẽ khiến doanh số tăng.

Source: Thị trường Mỹ tăng điểm trở lại

Thị trường Mỹ tăng điểm trở lại

giavang — Fri, 27 Nov 2009 22:21:55 +0000

Các chỉ số chính của thị trường leo lên sát mức cao nhất trong một năm nhờ dấu hiệu kinh tế toàn cầu hồi phục, lợi nhuận doanh nghiệp cải thiện.

Chỉ số S&P 500 tăng 0,7% lên mức 1.071,66 điểm tại thị trường New York. Chỉ số công nghiệp Dow Jones tăng 51,01 điểm tương đương 0,5% lên mức 9.829,87 điểm.

Chỉ số MSCI của TTCK thế giới trong phiên giao dịch ngày hôm qua tăng 1,1%.

Tất cả ba chỉ số này như vậy đóng cửa ở mức cao nhất tính từ tháng 10/2008.

ADB dự đoán kinh tế khu vực châu Á (không tính Nhật) sẽ tăng trưởng 3,9% trong năm 2009.

Nỗ lực của chủ tịch FED trong việc hỗ trợ kinh tế tăng trưởng có thể bị cản trở bởi mục tiêu khôi phục hoạt động ngành ngân hàng.

cổ phiếu JP Morgan Chase tăng 4,3% sau khi Bank of America nâng triển vọng lợi nhuận của ngân hàng.

Cổ phiếu Newmont Mining và Exxon Mobil tăng khi giá kim loại và dầu thô tăng.

Cổ phiếu Caterpillar tăng 3,6% do dự đoán nhu cầu hàng hóa sẽ khiến doanh số tăng.

Source: Thị trường Mỹ tăng điểm trở lại

Thanksgiving with the Turkeys

merrilymarylee — Fri, 27 Nov 2009 18:09:32 +0000

Rebellious ear syndrome is not something I’ve ever read about, but I’m pretty sure I have it.

Last week when I was getting ready for the beach wedding, I had a problem putting a simple gold earring on my left ear. The earring post would go in okay, but it wouldn’t come out the back. I tried other earrings. No problem. I tried both earrings in the right ear. No problem. I labored for about 20 minutes and finally went to the ceremony with naked earlobes.

Admittedly, I don’t wear earrings often. Sweat pants don’t call for them. Still, if other earrings (or earbobs, as Dearly Beloved insists on calling them) go through, the opening hasn’t grown over. Tell it to the ear.

Yesterday, since it was just the two of us, DB and I went out on the town for Thanksgiving dinner. ”Out on the town” meant a delightful meal in a beautiful restaurant on the 24th floor of an uptown building. It also meant eating at 11 AM to get DB back home in front of the TV for all the football. Sleeping through TV sports is one of his favorite holiday traditions.

I pulled out the earrings again–my favorites because they’re pretty, lightweight, and comfortable. I put on the right earring; no sweat. The left one? Nothing doing. I took out the right earring and tried it in the left ear. Nope. Wouldn’t go there.

I put another earring in my left ear and tried to get the post of the gold one to follow the path. Nothing doing. I put a heavy one on and pulled it around to enlarge the hole. (Don’t mess with me!) Didn’t help.

In frustration, I put the earring in as far as it would go and found DB reading the paper. ”Look at the hole in the back of my ear lobe and guide this earring through it,” I asked.

You’d have thought I’d asked him to lance a boil or sew my fingers together.

“Sheeenga hongggga. . . Gaaahhhhhhh. . . urp. . . aaaahhhhhh! I can’t do this!” he told me after a full 15 seconds of trying.

I went back to the mirror to try again, but my left ear was the color of a raw turkey neck. I tossed the earrings back in the jewelry box and went naked again.

We had forgotten that all the streets were blocked off for what’s said to be the fourth largest Christmas parade in the country. Not just one street, but blocks and blocks, and the cross streets as well. Just like with the earring, we were at a loss as to how to thread our way to the other side.

With all the fog, it looked like the high rise view wasn’t going to matter. This is “uptown” Charlotte. It used to be “downtown” Charlotte until the city bigwigs decreed it otherwise. Their thread of logic is that it sits on a rise, therefore “downtown” is incorrect. ”Uptown” doesn’t seem all that correct either. Uptown needs department stores and they’ve all moved to the malls. There are plenty of bank buildings, however.

Was it a good idea to have him wandering around during Thanksgiving dinner? It’s not like having Santa Claus visit during Christmas dinner. He looked grouchy, perhaps because he wasn’t going to Disneyland. Then again, are there any eye openings for the stuffee inside? Oh well, he couldn’t see my turkey neck earlobe.

Someone had to lead him around. Sounds like a job for the birds.

The elegant buffet was set up in two different rooms and I rose to the challenge of trying it all. DB was much choosier. He ate mostly salmon. Maybe the ear surgery had grossed him more than I realized. Or perhaps the sullen turkey psyched him out.

One seat in the entire place that gave a view of the Carolina Panthers’ practice field–his. They practiced while we ate.

This was my view. I was intrigued with the tiny little cemetery across from the big church.

The fog disappeared before dessert.

I don’t know the name of the second building from the right. I call it the Mad Hatter building. It is shaped like his hat. This is not a very illustrative view. I’ll do better another time–when there is no parade.

The building pictured below is the Bank of America building. Hugh McColl was CEO when it was erected, so Locals call this the Taj McColl.

When the bank first began here, it was called North Carolina National Bank. We didn’t fault them for getting bigger britches, but we hope the headquarters remain here.

There is another structure uptown also named for Bank of America. It started as Carolinas Stadium, then Ericsson Stadium. It would be a shame for the fickle finger of fate to decree a different name.

On street level, the trees were lighted festively. The viewing stands and TV trucks were still blocking the streets, but the parade had ended.

Close your eyes, white light purists, there are some bodacious lights out there ! Charlotte didn’t have any difficulty putting on HER colorful jewelry!

This picture is an optical illusion. The building actually DOES have a pointy head.

No doubt some turkeys were hanging around this corner, too.

We had to ride the elevator again to get to our car. I’m not sure why, but these pipes intrigued me.

Back in our neighborhood, things weren’t as festive. This is located on a nearby corner. How uncouth!

Hang a wreath on the door, you turkeys!

Credit card annual fee? Not at a credit union

american1fcu — Fri, 27 Nov 2009 07:46:17 +0000

USA Today reports that many banks are bringing back the ol’ annual fee dinosaur in response to the Credit CARD Act.

If you don’t want an annual fee on your card, writes Sandra Block, go with the not-for-profit option:

If you don’t care about rewards and just want a credit card that doesn’t charge an annual fee, consider applying for a card through a credit union. Many credit union cards charge no annual fee and offer below-average interest rates.

Block has just one thing wrong: American 1 offers ScoreCard rewards, which can earn you travel and gift rewards.

Through the rest of the article, however, Block gives options if your big bank credit card starts charging an annual fee or reducing reward programs.

The Card Game - New Full Length Documentary

Institutional Financial Derivatives, Inc. — Thu, 26 Nov 2009 17:56:56 +0000

PBS Frontline – As credit card companies face rising public anger, new regulation from Washington and staggering new rates of default and bankruptcy, FRONTLINE correspondent Lowell Bergman investigates the future of the massive consumer loan industry and its impact on a fragile national economy.

In The Card Game, a follow-up to the Secret History of the Credit Card and a joint project with The New York Times, Bergman and the Times talk to industry insiders, lobbyists, politicians and consumer advocates as they square off over attempts to reform the way the industry has done business for decades.

“The card issuers could do anything they want,” Robert McKinley, CEO of CardWeb.com, tells FRONTLINE of the industry’s unchecked power over consumers. “They could change your interest rate. They could impose an annual fee. They could close your account.” High interest rates along with more and more penalty fees drove up profits for the industry, Bergman finds, as the banks followed the lead of an aggressive upstart: Providian Bank. In an exclusive interview with FRONTLINE, former Providian CEO Shailesh Mehta tells Bergman how his company successfully targeted vulnerable low-income customers whom Providian called “the unbanked.”

“They’re lower-income people-bad credits, bankrupts, young credits, no credits,” Mehta says. Providian also innovated by offering “free” credit cards that carried heavy hidden fees. “I used to use the word ‘penalty pricing’ or ’stealth pricing,’” Mehta tells FRONTLINE. “When people make the buying decision, they don’t look at the penalty fees because they never believe they’ll be late. They never believe they’ll be over limit, right? … Our business took off. … We were making a billion dollars a year.”

It took the economic collapse in the fall of 2008 to set the stage for potentially historic change in the consumer credit business. President Obama and his team pushed through a credit card reform bill in May, and they’re now looking to establish a new Consumer Finance Protection Agency. But the banking and financial services industries contribute huge amounts of money to Congress — and the jury is still out on whether the new regulations can pass. “It’s a step in the right direction, but it’s a modest step,” says Harvard law professor Elizabeth Warren. “It’s a set of very discrete new laws. And the credit industry instantly set to work on how they could run around them. By itself, that set of rules won’t change the game.”

“It’s hard for them to get a bill through the U.S. Senate when the industry is pouring money into Washington,” says Martin Eakes of the Center for Responsible Lending of the banks’ political clout. “As Sen. [Dick] Durbin from Chicago recently said, ‘the banks, even as unpopular as they are right now in this crisis, still own this place.’”

Concentration of Credit-Default Risk Needs Remedy

Institutional Financial Derivatives, Inc. — Thu, 26 Nov 2009 14:25:21 +0000

Bloomberg – The concentration of the credit- default swaps market in the hands of a few players is increasing risk and should be remedied by more transparent reporting, according to Celent.

Five banks including Goldman Sachs Group Inc. and JPMorgan Chase & Co. accounted for about 90 percent of the credit-default swaps market in 2009, the Boston-based research firm said in a Nov. 25 report.

“The leading banks and dealers in the over-the-counter derivatives market are the main buyers and sellers of CDS and hence the chances of having them as a counterparty are quite high,” Anshuman Jaswal, a Celent analyst and author of the report, wrote in an e-mailed note. “This circularity within the system increases risk and we need to tackle it.”

Moves to regulate the OTC derivatives market by introducing measures such as central clearinghouses accelerated after President Barack Obama’s administration described the securities as a “major source of contagion” in the global financial crisis. The derivatives market outside exchanges relies on counterparties negotiating their own buy and sell orders, with no guarantees either will complete the trade.

Daily reporting of individual transactions to regulators and central data repositories would “help build an important check into the system,” the report said. It also said clearer guidelines are needed on conflicts of interest.

Credit-default swaps are contracts investors use to protect against bonds defaulting. Traders use them to speculate on credit quality and the contracts pay the buyer face value in exchange for the underlying securities if a borrower fails to meet its debt agreements.

Barclays Plc, Deutsche Bank AG and Morgan Stanley round out the top five banks. U.S. banks Goldman Sachs, Morgan Stanley, JPMorgan, Bank of America Merrill Lynch and Citigroup Inc. account for $29 trillion of the total outstanding U.S. credit derivatives market, Celent said. That’s 95 percent of the market, leaving $1.38 trillion for all other firms.

“This poses a dilemma for the participants as well as the regulators as the counterparty risk is quite concentrated,” the report said.

BOA sells top exec's home at 44% discount

luxuryasiahome — Thu, 26 Nov 2009 00:22:59 +0000

Bank of America Corp (BOA), the biggest US home lender, sold a home for its top housing executive fo

4 Step Bank Fix

bankingwhistleblower — Wed, 25 Nov 2009 23:54:44 +0000

Dylan Ratigan

Host of MSNBC’s “Morning Meeting” and “The Dylan Ratigan Show” on WABC radio

Posted: November 4, 2009 05:38 PM

I spoke today on the Morning Meeting about the four steps the government could take to fix the U.S. banking system and stop the ongoing and expanding corruption of our country. These simple solutions come from the litany of people that I speak with who seek to change the mega-casino our government has built during the past 10 years back to one built on investors, innovators and workers creating things that benefit society. Unfortunately, our current leaders want to take the easy road of sustaining the casino economy with what I like to call the Magic Money Machine. Except as with all magic, there’s actually a trick; in this case, it is a large bill that will be left to those of us unfortunate enough to still be around when it comes due. Here are the four pieces of regulation that taxpayers should be demanding from their leaders:

1. Inject transparency, primarily to bring almost $600 trillion of crooked insurance scams to the forefront. Force almost all swaps onto exchanges, not just the 20% as current proposed reform does.

Secretary Geithner, Chairman Frank and Chairman Dodd are protecting the last of the Wall Street secret money-making schemes. They don’t want to force transparency on this market because it would disclose the fraud this massive bank scheme is — a taxpayer subsidized secret insurance market which sells cheap insurance to hedge funds, power and food and energy companies, and makes for huge profits at banks and insurance companies. Insurance and idle speculation in secret is a brilliant way for banks and other financial services companies to make money (who doesn’t want to collect insurance premiums every month for something you’ll never have to pay for?!) And a great way to make oil, food and electricity company CEOs richer as they pay less for their insurance. One problem — they are all surfing on the taxpayers back to the tune of $24 trillion (per Inspector General, Neil Barovsky) at risk last I checked — and the U.S. government is the one letting them do it. Still. Now bigger than ever.

2. Demand capital to back Wall Street’s gambling. As Tyler Durden at Zerohedge.com said about this clip from the show, do this and it is a guarantee that very few firms will have Goldman’s trading pattern each and every quarter.

In Vegas, you need to have actual money to gamble. Your own money. It’s crazy, but true. Even today, in many cases more than ever, U.S. banks use America’s FDIC insured safe deposits to fund their own mad bonus-seeking speculation. Once the banks blow through that — they borrow from the biggest money printing house in the world, the U.S. Federal Reserve to do the same thing. This is truly insane. The banks and their traders keep the upside. You, the taxpayer, keep the downside. No one else in the world can pay themselves billions to take infinite risk with little or no money down, except a big bank CEO. And we thought they were good at their jobs making all that money, when all they did was rig the game using our government to do it.

3. Enact a tax-code to encourage long-term investment and discourage short-term profit. Fortunes should not be made in minutes but over years through the creation of value to society.

As long as the easiest way for a man or woman to make money is to spend their day clicking for dollars, why would they bother doing all the work of investing in the long-term economic development of private business in America? Tax code in general should encourage investment, jobs, and innovation in America and discourage idle speculation as the easiest way for a college kid to get rich. There are sensible ways to use tax policy to encourage this that do not hamper liquidity.

4. Break up the Too Big To Fail banking institutions. Start with Goldman Sachs and J.P. Morgan. Right Now.

How do you expect any other business to compete with the chosen few who are guaranteed profits? The more risk they take, the more they make. Why do you think they invented a fake $600 Trillion secret derivative market in the first place? Bigger bonuses baby. All upside. No downside. Thank you Uncle Sam. Thank you Secretary Geithner.

Follow Dylan Ratigan on Twitter: www.twitter.com/DylanRatigan

"Capitalism, A Love Story" : un film Da Moore

versusmag — Wed, 25 Nov 2009 21:04:37 +0000

J’ai toujours aimé Michael Moore, surtout avant de voir ses films. Il faut parfois savoir apprécier le « buzz » (quel affreux terme, au passage !) qui court autour du film avant même de se rendre dans les salles obscure pour jauger la valeur dudit « buzz » et juger la qualité dudit film. Car Moore, ce n’est une surprise pour personne, se traîne derrière lui une réputation bien gratinée, aussi bruyante qu’une armada de casseroles en téflon usagées, qui lui ouvre une quantité de cœurs et lui ferme une aussi importante quantité de portes. C’est qu’il a tendance à titiller un peu trop les puissants, les technocrates, les nantis, les démagos, les arrivistes, les carriéristes, enfin tous ceux qui font le système (cette « bête sauvage » dont parlait Nixon) et ceux qui en profitent en jurant leurs grands dieux qu’ils ne font rien de mal ; c’est qu’il aime particulièrement, le Moore, aller caresser la barbichette des décideurs, des législateurs, des hauts responsables, des élites, bref des politiques, afin de les confronter à ces aberrations qu’ils ont concouru à créer – ne serait-ce que du fait de leur inaction chronique. Même ceux qui n’ont pas vu Fahrenheit 9/11, à savoir les aveugles, les lapons et les manchots du pôle sud, se « souviennent » d’un gros bonhomme chaussé de lunettes et de casquette allant ennuyer ces messieurs-dames les représentants du Congrès, à Washington, histoire de leur proposer d’envoyer leurs propres rejetons en Irak pour faire la guerre aux vilains. Enfin, nuance : allant ennuyer ces représentants qui votèrent en faveur de l’invasion. Si Moore possède bien une qualité, c’est de savoir comment désigner du doigt les coupables, et il ne se gêne nullement pour cela. Une fois désignés, la curée commence.

Ces « victimes » montrées du doigt par le pamphlétaire le plus célèbre et le plus admiré de l’industrie du cinéma sont aisées à reconnaître puisqu’elles font partie du titre. Car le capitalisme est l’affaire des capitalistes, et potentiellement un cas de conscience pour une majorité des êtres humains qui foulent le sol de cette terre. Nous sommes donc tous concernés. Même le chaland qui subit les foudres de l’inexorable profit ; oui, même cet agriculteur, trapu et bonhomme, aussi beauf que savent l’être les Américains de la campagne, qui prépare tristement son déménagement après avoir reçu sa notification d’expulsion. Sa ferme, l’achat d’une vie, vient d’être rachetée par d’autres Américains qui en ont les moyens, et qui n’auront sans doute pas à débourser toujours plus afin de rembourser un prêt à taux expansif. Déménager pour où ? La question se pose d’autant moins qu’elle ne souffre aucune réponse. Le voilà, l’ami « capitalisme » : c’est l’ange monétaire qui descend du dernier étage des Goldman Sachs, Bank of America et autres pour vous offrir le seul ciel étoilé comme toit de maison. Et de cela, l’agriculteur un peu bourru est tout autant responsable que les puissants : parce que, d’une certaine manière, il a laissé faire le système. Comme nous tous. C’est sur cette position que campe un Moore légèrement désabusé, indubitablement fatigué par ses années de pérégrinations idéologiques depuis Roger et moi. Avec l’impression que rien n’a changé.

A sa façon, Moore ressemble à notre hexagonal postier Olivier Besancenot, le talent pour le montage en plus. Lui aussi pourfend sans égards le système tel qu’il s’est installé et pérennisé ; lui aussi monte à l’assaut de ces puissants qui sont autant de châteaux forts à prendre par les armes ; lui aussi souligne avec raison – et un chouia d’idéalisme – les aberrations de notre économie mondialisée. Et lui non plus ne propose in fine aucune solution valable de rechange. En même temps, la différence c’est que Besancenot est un politicien dont le rôle est d’agir, tandis que Moore n’est qu’un pamphlétaire hyperdoué dont les prérogatives se résument à étaler et faire connaître les scories systémiques. Chacun à sa place. Il me semble néanmoins qu’un Moore, pour ces mêmes raisons, aura toujours plus d’impact que tous les Besancenot du monde : parce qu’il cherche moins à convaincre (votez pour moi) qu’à persuader (accompagnez-moi dans le projet d’un changement profond des mentalités). Le champ d’action du cinéaste s’arrête à la porte des institutions et des bastions de la finance ; en attendant, il aura tracé le chemin pour des politiques plus avisés et, surtout, plus réalistes que celles des anti-tout.

Car Moore, et ce n’est pas la moindre de ses qualités ici, nous donne à voir une chose étonnante, en fin de film, une chose bien plus juste que tous ces exemples de dérives capitalistes livrés les uns à la suite des autres comme on enfile des perles (qui a-t-il besoin de convaincre, d’ailleurs, de l’iniquité des traitements infligés à une population qui souffre quotidiennement dans le « pays de la liberté » ?) ; cette chose, c’est la capacité du politique à dépasser l’institutionnel – les clivages idéologiques, les disparités sociales, les pressions lobbyistes – pour puiser sa force dans une inspiration humaine. Il est incroyable de voir ces images de représentant(e)s du Congrès qui harangue leurs collègues et, par-delà les murs, leurs électeurs, afin de les pousser à la révolte ; il y a de l’émotion dans cette façon qu’a le procureur de Chicago d’intimer l’ordre à ses concitoyens de ne pas quitter leur maison lorsque le représentant de la banque vient les expulser. Le rôle du politique n’est-il pas de protéger ses ouailles, tel un messie civil ? Et qui pourrait contredire l’idée que l’on est mieux protégé entre quatre murs et sous un toit ? Logiquement, presque naturellement, Moore change alors d’époque et nous emmène au temps de Franklin Roosevelt, quand le plus grand des immenses présidents américains (exit Lincoln et Kennedy) envoyait l’armée non pour déloger les manifestants dans les usines, mais pour les protéger. Situation rocambolesque ? Certes, mais qui dans un monde idéal ne devrait être qu’une norme. Difficile de dire si le propos de Moore peut être ici compris comme une légitimation de Barack Obama (dont l’espoir diffus se propage dans les allées filmiques de ce Capitalism), que le cinéaste a eu largement le temps de reconsidérer politiquement depuis la réalisation de son film. Toutefois, il est clair que le nouveau président américain suscite l’enthousiasme de l’originalité chez les hommes et les femmes qui ont subi, un moment ou un autre, les foudres du système.

Gare, pourtant, à la tentation de placer Moore sur un piédestal ! Toutes les qualités de son dernier opus (qui n’a que médiocrement marché aux USA malgré un lancement savamment orchestré par Paramount), depuis l’audace physique du cinéaste, qui n’hésite pas à aller en personne taquiner les agents de surveillance des banques afin de réclamer l’argent versé par les contribuables via le plan Paulson, jusqu’à l’excellente pédagogie visuelle qui fait de toute œuvre de Moore un objet à la fois passionnant et ludique, ne peuvent pas éternellement dissimuler ses défauts. Ces défauts sont connus, ils sont récurrents depuis les débuts de sa carrière ; d’une part, le fait que Moore utilise à sa convenance les mêmes armes que ses ennemis (la propagande), d’autre part ce risque constant de la simplification abusive que personne, même doté de la meilleure foi possible, ne peut complètement éviter. En réalité, l’importance de ces défauts varie selon les yeux qui les regardent et les oreilles qui les entendent. Je veux croire que le public possède cette vivacité d’esprit suffisante pour prendre une certaine distance vis-à-vis des images. Mais pour des spectateurs dénués de tout sens critique, le danger est grand de prendre pour argent ( ! ) comptant les propos du cinéaste, parmi ceux qui frôlent au plus près le révisionnisme. Il arrive parfois que les arguments du cinéaste flirtent avec l’exagération stupide d’un Thierry Meyssan, tout occupé à créer de toutes pièces sa future théorie du complot. Différence essentielle tout de même : dans tous les cas Moore a parfaitement conscience de cette tentation à franchir la limite, ce que les conspirationnistes n’imaginent même pas.

Plus qu’un film sur la conspiration, plus qu’un film révolutionnaire (l’appel final résonne comme un cor de chasse destiné à tous les guévaristes convaincus), Capitalism est pour Moore un exutoire autobiographique. On aurait pu penser que le bonhomme de Roger et moi cesserait rapidement d’importuner le spectateur en se présentant devant la caméra et en allant enquiquiner les passants. Pourtant, le cinéaste a continué à se mettre en scène, et plus encore, à mettre en scène sa ville natale, Flint, dans le Michigan, réceptacle de toutes les dérives du système américain (on la retrouve dans une majorité de ses documentaires, y compris Bowling For Columbine). Il y retourne encore une fois pour quelques scènes parmi les plus émouvantes de sa carrière, particulièrement ce passage où, observant le terrain vague que fut autrefois l’usine automobile où il travailla toute sa vie, le propre père de Michael Moore ressasse la nostalgie d’une époque meilleure. Moore ne s’est jamais autant impliqué personnellement dans son projet de mise en scène, allant jusqu’à montrer des images de son enfance heureuse. Un brin d’égocentrisme ? Dans ce cas précis, le terme exact est plutôt : humanisme.

Eric Nuevo

> Film sorti en salles le 25 novembre 2009

> Lire aussi : notre dossier sur la politique catastrophique de G. W. Bush vue par Moore dans VERSUS n° 14, notre dossier sur la crise financière et le milieu (mafieux !) bancaire dans VERSUS n° 15, et notre dossier sur les world companies dans VERSUS n° 17, actuellement disponible

The Sub-Prime Crisis: American Origins, Global Effects, Japanese Lessons?*

policyanalysis — Wed, 25 Nov 2009 12:57:18 +0000

* This post is an updated English excerpt of Henrik Schmiegelow”s article “Seikai Keizai Kiki no Dasshutsu no Kagi wa Ajia to Oushu” , Chuokoron (Tokyo), Vol 124 N° 8, p. 152-161 (July 15, 2009)

There is global agreement on both the origin and the effects of today’s world economic crisis, the worst since the Great Depression of the 1930’s. There is, however, global disagreement about the proper solutions. The divergence between unanimity in problem analysis and dissension on policy response is alarming. It suggests inability or unwillingness to learn the lessons of economic history. While the monetary lesson of the Great Depression is well rehearsed (Fisher, 1933; Friedman and Schwartz, 1963; Bernanke, 2002), reluctance to learn the fiscal lesson of that case may be forgivable, since only a war, the Second World War, brought the US a full recovery through fiscal expansion. But policies disregarding an example as recent and telling as Japan’s lost decade in the 1990’s are precarious policies indeed.

I. American origins

The crisis originated in the US. As traced by Felix Salmon in Wired, an application of a standard mathematical formula, the Gaussian copula function, to mortgage default correlations was published in 2000 by a “quant” at JP Morgan Chas. It was severely flawed by an implicit assumption of a continued rise of real estate prices far beyond historical trends (available in Robert Shiller 2005). The assumption was derived from a flimsy record of less than a decade of available price statistics of credit default swaps (CDS), conveniently the period of the last real estate boom. But it was transformed into a mathematical constant reducing, as if by alchemy, the probability of mortgage defaults. American banks used this magic formula enthusiastically to justify extravagant mortgage lending to low-income (“sub-prime”) homebuyers in the US. Sub-prime mortgages were “packaged” in small slices beyond recognition with prime mortgages in “asset-backed” securities (ABS). ABS were, in turn, repackaged in structured credit instruments called “collateralized debt obligations” (CDO), CDO further reused as building blocks in a higher structured credit architecture called “CDO squared”, and CDO squared in CDO cubed. These securities were rated AAA by the three American rating agencies, insured at low cost by CDS and sold globally to banks blindly trusting “financial innovation” from Wall Street. The result was a financial bubble in the US with pervasive global effects. CDS reached a volume of 60,000 bn US $. Whereas the Japanese bubble was induced from abroad, i.e. intense US pressure on Japan to simultaneously appreciate its currency and expand domestic demand according to the Plaza Agreement of 1985 (see H. and M Schmiegelow”Obei Ijoni Obeitekina Nihon Keizai”(More Western than the West: the Japanese Economy), Chuokoron Vol. 108, No.1 (January 1993), pp. 72-83, p.77), the US bubble was “home-made”.

The crisis erupted in 2007, when the first American sub-prime lenders defaulted, as sub-prime borrowers could not afford the rise from the initial “teasing” rate of 2 percent to the eventual contractual rate of 8 percent of the mortgage. A wave of foreclosures brought real estate prices down. ABS and related CDS became “toxic assets”. The global financial bubble burst a year later, when the US Treasury and the Fed allowed Lehman Brothers to default, apparently as a warning to the banking sector against reckless risk taking. The action was reminiscent of President Hoover’s stand in triggering the Great Depression and Governor Mieno’s stern monetary move in bursting the Japanese bubble.

II. Global effects

While the effects of the bursting of the Japanese bubble, though severe and prolonged for Japan, remained contained within the Japanese economy, the US sub-prime crisis caused a crisis of confidence in the global banking sector and hence a global economic meltdown. Uncertainty about the exposure of individual banks to toxic assets put credit markets in a state of freeze. European banks had massively participated in the frenzy of securitization of US mortgages. With the notable exception of Deutsche Bank, which like Goldman and Sachs had doubts about the assumed rise of real estate prices and hedged its bets while selling ABS to other institutional investors, scores of European banks including Germany’s leading real estate lender Hypo Real Estate and several public “Landesbanken” “followed the herd” in blind trust of “financial innovation”. When they noticed that the trust was unwarranted, they realized their exposure was out of proportion with their capital. Unable to put a value on toxic assets and, just like their Japanese colleagues in the 1990’s, not daring to proceed to write-downs for fear of being nationalized, they stopped lending and no longer assumed their function of financing the national economy. Hence even loans unrelated to toxic assets became non-performing and the hidden need of further write-downs grew as in a vicious circle. In a first attempt at quantifying necessary global write-downs in April, the IMF estimated 4.1 trillion $, with 2.7 trillion $ of bad loans and securities originating in the US and 1.12 trillion $ in Europe. Japan, whose banks, sobered by their own bubble experience, had hardly touched ABS, faced “only” 149 billion $.

Early hopes that the still thriving industrial sectors of exporting countries like China, Germany and Japan might remain unaffected by the collapse of the US financial sector quickly evaporated. On the contrary, they became the countries worst affected with declines in exports in the first months of 2009 in the ranges of 21,1% (Germany), 25,7 % (China) and 46 % (Japan). On July 8, 2009, the IMF predicted a deeper recession in Europe and Japan than in the US, with declines of GDP in 2009 of 2,6% in the US, 6,2% in Germany and 6,0% in Japan. For Keynesians, the reason was obvious: the hitherto most important sources of global demand, i.e. the Anglo-Saxon countries combining low savings and high consumption propensities with structural fiscal and external trade deficits, have suddenly disappeared from the international trade equation.

While the October 2009 Global Financial Stability Report of the IMF acknowledges a reduction of global losses by 600 billion to $3.4.trillion – largely due to rising securities values in mid 2009 -, it warns of further credit deterioration, as over half of potential write-down needs through end-2010, estimated at $1.5 trillion, has yet to be recognized. It emphasizes that banks need to crystallize losses through realistic assessment of asset values and that capital levels may need to rise further to rebuild lending capacity to finance recovery. The IMF urges banks to use the chance of extremely low interest rates, wide spreads and, hence high profitability, still prevailing in late 2009 for this purpose. It warns that such favorable conditions may not last, as public credit demand resulting from the massive programs of fiscal stimulus in all major economies might soon exert upward pressure on interest rates.

These figures underscore the urgency of adopting the right strategies to solve the crisis faster than in Japan’s lost decade, but with the strategic pragmatism that helped Japan to recover within 12 months in 2002/2003 ( Michèle Schmiegelow, “Senryakuteki puragumatisumu ni tachi kaere: Nihon keizai e no shohosen” (Recover Strategic Pragmatism: the Prescription for the Japanese Economy) Tokyo: Japan Center for Economic Research Bulletin, 1/10/2002, N°895, pp.4-10) . Unfortunately, so far, dogmatic dissension and, hence, cognitive confusion prevail. Sometimes, the disagreement appears to be between nations, such as between France and Germany or France and the UK, or groups of nations, such as the transatlantic divisions or those between the “Anglo-sphere” and the “rest of the world”, or the G7 and the G20. In fact, the most acrimonious debates are domestic ones, between monetarist and Keynesian economists everywhere, US Republicans and Democrats, Wall Street and “Main Street”, defenders of the Common Law or of Civil Law, advocates of laissez-faire and proponents of social protection.

In early 2009, the US had the initial advantage of a new administration with huge popular support, while Germany’s coalition government was compelled to focus on elections in September 2009. To the global media, Japan, France and the UK appeared much more eager for action than Germany. But as attested by the IMF’s study The Size of Fiscal expansion: An Analysis of the Largest Countries, in February 2009 with one of the most generous social security systems of the world functioning as an “automatic stabilizer”, Germany was devoting 3.4 percent of GDP to fiscal stimulus, the third largest proportion of major economies after the US (4.8 percent) and China (4.4 percent), but before Japan (2.2 percent), the UK (1.5 percent) and France (1.3 percent). In May 2009, Japan surged to the top with a supplementary budget adding 3 percent, bringing the sum of all fiscal stimulus programs combined to 5.2 percent. And yet, just as in Japan’s lost decade, the debate about whether Keynesian stimuli provided so far were sufficient or not, goes back and forth. “Exit strategies” are intensely discussed, while most participants in these discussions, foremost among them Ben Bernanke, are convinced that it is far too early to apply them.

However, even though more fiscal stimulus may be needed to preempt a “double-dip” or even “triple dip” recession with intermittent short-lived recoveries, it will not address the roots of the sub-prime crisis. The crisis has rightly come to be called a “balance sheet recession” because of its origins in the balance sheets of the financial and household sectors, just like Japan’s debt deflation after the bursting of the Japanese bubble in 1991. The term “balance sheet recession” was first coined for the Japanese recession of the 1990’s by the Head of Nomura Research Institute, Richard Koo, (see his Balance Sheet Recession: Japan’s Struggle with Uncharted Economics and its Global Implications (2003)). Michael Spence, the former Dean of Stanford Business School whose work on information asymmetries was awarded the 2001 Nobel Price, has emphasized the tremendous depth and destructive power of the balance-sheet destruction characterizing the sub-prime crisis. “In the future”, he writes, “central banks and regulators will not be able to afford a narrow focus on (goods and services) inflation, growth, and employment (the real economy) while letting the balance-sheet side fend for itself. Somewhere in the system, accountability for stability and sustainability in terms of asset valuation, leverage, and balance sheets will need to be assigned and taken seriously”. Japan’s lost decade should serve as a warning of what happens as long as balance sheets are not taken seriously.

President Obama has not only great charisma, but also a vision of structural change in the US economy. As explained in his speech at Georgetown University on April 14,2009 that vision no longer relies on “voracious consumption”, “excessive debt”, and “reckless speculation”, but on savings, education, health care and investments in scientific, technological and ecological innovation. His combination of strategic vision and American philosophical pragmatism is unmistakably reminiscent of the strategic pragmatism that enabled Japan to emerge post-war as the second largest economy of the world .

Unfortunately, US Treasury Secretary Geithner’s efforts to stabilize the American banking system by public-private partnerships are perceived even in the political spectrum favorably inclined to the administration,such as Paul Krugman, as relying to a worrying extent on the very same financial sector whose collective cognitive failures are at the origin of the crisis. Neil Barofsky, the Special Inspector General of the Troubled Asset Relief Program (TARP) has warned that not enough has been done to guard against fraud in a program offering public money to private investors who buy toxic assets. Geithner’s programs cling to the assumption that financial markets know best how to find a price for toxic assets. They require banks holding such assets to sell them, which for fear of having to write down the realized losses after such sales, they are reluctant to do, the more so as Barofsky calls for supervised screening of each security. As neither prospective sellers nor prospective buyers have a clear idea about the value of the toxic assets, the process will be protracted. The “market” cannot clear, as its “sell side” (banks and brokers) and its “buy side” (pension funds, hedge funds, insurers) are fighting each other about who will “control” the regulators. Law suits between mortgage lenders and borrowers as well as sellers, buyers and insurers of mortgage-backed securities have just begun in the US and may take many years at huge legal cost. The world economy seems “hostage” of the outcome of these American lobbying campaigns and legal battles.

While some green shoots began sprouting in the real economy in May/June 2009 as depleted inventories were replenished, and commodities hoarded for a future recovery, banks in the US and Europe continue to fail in their essential economic function of financial intermediation. Instead of being liquidity providers, they have become liquidity users. The German legislation, adopted in May 2009, to allow each German bank to isolate toxic assets in a separate “bad bank” is a strategy of buying time until market dysfunction ends in the US.

The “stress tests” conducted by US regulators at the 19 top US banks were designed to offer a perspective of survival of those banks rather than to encourage the building of sound new banks ready to channel credit to a struggling economy. The projection of combined losses of 599 bn US $ over 2009 and 2010 announced on May 7,2009 did not lift the cognitive fog covering ABS. For “just in time” for the stress tests, on April 2,2009, the Financial Accounting Standards Board (FASB) had responded to pressure from the US Congress to change the accounting rules for banks. Rather than applying the “mark-to-market” rule that force them to report the losses on ABS, they were allowed to use “internal models” in view of “conditions indicating that markets were dysfunctional”. While American banks pressured Japan to impose mark-to-market accounting on Japanese banks burdened by nonperforming loans in 2002, they asked key members of the US Congress to pressure the FABS to exempt them from this very same rule in April 2009 (Wall Street Journal “US Congress helped banks defang key accounting rule”, June 4,2009).

This presages a replay of Japan’s decade of fruitless attempts at different fiscal and monetary crisis solutions without prior cleaning-up of the financial sector. Only in 2002, when the Koizumi government finally imposed complete rigorous write-downs of bad loans, Japan’s banks recovered the ability of financial intermediation in the economy. They began responding functionally to the Bank of Japan’s path-breaking policy of quantitative easing under Governor Fukui. In the third quarter of 2003, the success of these policies was demonstrated: the Japanese economy bounced backed with an annualized growth rate of 6 percent. Of course, the upswing of the global economy at the time, and more particularly Chinese demand for Japanese exports did help. The Japanese case is a historical example to be remembered today.

III. Japanese Lessons ?

The case suggests that two cognitive efforts must be undertaken, before new policies can be designed to put the global economy on the path to recovery:

- Finding a method of re-pricing the toxic assets for rapid write-downs

- Identifying new sources of global growth

1. Re-pricing toxic assets

At first sight, the Japanese case seems to indicate an effective solution to solve the balance sheet crisis. Only in October 2002, when Prime Minister Koizumi appointed the determined reformer Heizo Takenaka as Head of Japan’s Financial Services Agency, were the balance sheet problems of the financial sector seriously addressed. Takenaka enforced a fair value re-pricing of bank assets and rigorous write-downs of non-performing loans combined with recapitalization and restructuring of the banking sector. As mentioned above, only then did Japan’s banks recover the ability of financial intermediation in the economy.

During the preceding decade, Japanese banks had been protected, just as US banks today, against revealing the extent of their capital shortfall. Similarly, they became liquidity users rather than liquidity providers. And similarly they failed to recover the confidence essential for the functioning of financial markets. When Takenaka finally imposed fair value re-pricing of bank assets and corresponding write-downs of bad loans in 2002, he did so in response to intense prodding by the US government and American banks. The immediate success of that strategic policy reversal perfectly vindicated the validity of the American arguments at that time.

And yet, as evidenced by the successful efforts of the American Bankers Association to secure exemptions from fair value accounting as long as “dysfunctional market conditions”, US banks are not ready to adopt the strategy recommended to the Japanese colleagues at the time. Arguably, the differences between the Japanese bubble of the late 1980’s and the sub-prime bubble of the mid 2000’s may explain some of the reluctance of US banks to heed their own advice of that time. Although both Japan’s debt deflation and the US sub-prime crisis are balance sheet crises, the differences are significant on at least two levels, the degree of securitization of the non-performing assets on the balance sheets and the doctrines on a government role in recapitalization and restructuring of the banking sector.

Although securitization of debt had made advances in Japan just as elsewhere, nothing comparable to the hypertrophied financial engineering of the US sub-prime bubble described above was present in the Japanese bubble of the 1980’s. Although massive and debilitating, Japan’s decade long debt deflation was still essentially a classic crisis of banks burdened by non-performing loans, more comparable in the nature of its balance sheet problems to the Swedish banking crisis of the early 1990’s than to the “toxic assets” crisis of financial engineering in the sub-prime case. Arguably, what distinguishes the sub-prime crisis is that it is also a cognitive crisis. It was a failure of “many bright people”, as certified to the Queen of England by the British Academy. Hence bankers may feel justified to plead that it is difficult to re-price the toxic assets on their books.

In a working paper of the Joint CRIDES/IRES/CECRI Working Paper Series on Institutional Competition between Common Law and Civil Law on contract modification as a solution to the subprime crisis, we show how cognitive crises can be dealt with in contract law and hence in the assessment of the value of mortgage loans. US banks do not yet seem to be aware of that solution, however, and the point remains that the cognitive failure of financial engineering in the sub-prime crisis continues to be invoked to justify their reluctance to re-price their toxic assets.

While in 2002 US banks have wholeheartedly welcomed Heizo Takenaka’s vigorous enforcement of the strategic triad of write-downs, recapitalization and restructuring of the banking sector in Japan, they would certainly balk at a similar treatment to themselves by the US government. Although even the strongest US banks have gladly accepted short-term bail-outs, and many not so strong ones continue to depend on what George Soros calls “artificial life support”, and although there was significant prodding even from the Bush Administration in the Bank of America/Merrill Lynch merger, an all-out government-led restructuring of the banking sector would be rejected as not in keeping with free market rules and share-holder rights. In view of the large literature on the uniqueness of the relationship between government and business in Japan, the Takenaka strategy can easily be discarded as not applicable to the West. Timothy Geithner has a much more restrained view of government’s role in financial markets, and his view is shared by the “centrist” spectrum of the Democratic Party. Together with the Republican Party, this spectrum appears to command the inclination of a majority of the US Congress in this respect.

In the West, if everything else fails, the endgame will inevitably involve protracted legal battles. We believe that there is indeed a legal solution to the balance sheet crisis resulting from the sub-prime failure. In the working paper already cited, we argue that the earlier the legal dimension of failed sub-prime lending is recognized, the easier it will be to avoid the enormous cost of such an endgame.

2. Identifying new sources of global growth

If we take President Obama by his word, the American economy will no longer be consumer of last resort for the world economy. Unlike Japan’s economy in 2003, the recovery of today’s world economy will not be assisted by some “external” source of demand. Private enterprises and public policy-makers everywhere in the world will have to look beyond demand-pull from abroad and organize Schumpeterian supply-push innovation that creates its own demand. This is the most promising form of strategic pragmatism in the economic field. Japan’s microelectronic revolution in the 1970’s and America’s software revolution in the 1980’s are the leading examples. Post-war Europe did not offer a technological revolution, but mustered strategic pragmatism for political innovation: the functional integration of Europe’s economy. Its success demonstrated that prosperity springs not only from Ricardian comparative advantage in international trade, but also from trade between industrial nations producing similar goods and services.

There is, however, one new source of demand to consider: the domestic demand of 3 bn people in Asia. Except for Japan and urban coastal China, it is not yet fully present in markets. But it just waits to be awakened by adequate policies of economic and social development as well as economic integration in Asia. Western China’s pent-up demand and the emerging Chinese legislation of a social security system on the Northern European pattern will unleash enormous domestic dynamics, offsetting some of the declining US demand for Chinese products. ASEAN+3 seems on course to organize proper flows from savings to investments in the Asian region (see our post “is Asia’s integration less functional than Europe’s,”). Thanks to such an “Asian solution” to the American sub-prime crisis, Europe’s functional experience may yet be tested on a global level.

B of A Now Approving Short Sales in 7 days??

portlandhomesolutions — Wed, 25 Nov 2009 06:08:06 +0000

http://www.washingtonpost.com/wp-dyn/content/article/2009/07/10/AR2009071002115.html

Washington Post reports that Bank of America is streamlining their short sale process. Portland Home Solutions LLC top negotiators will be attending one of the first courses available for training on their new procedures! Their goal is approve short sale files in 7 days! Contact us for more info! www.portlandhomesolutions.com