Wereldwijde koersval beurzen #04: Free money for the poor.

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Op zaterdag 16 februari 2008 16:53 schreef ItaloDancer het volgende:

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Meestal wel. Maar niet noodzakelijkerwijs. Regelmatig in de historie zijn de koersen - tegen beter weten in - steeds doorgestegen. Terwijl men dus al wist dat het fout ging aflopen. De klap is dan des te harder...

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Op vrijdag 15 februari 2008 22:28 schreef gronk het volgende:
p.

Overigens, ik heb een paar dagen geleden ergens een blogpost gelezen van iemand die stelde dat zo'n beetje alle staten bezorgd waren over de vrijheid die geldverstrekkers hadden mbt het verstrekken van kredieten, daar wetgeving over wilden uitvaardigen, maar dat ze daar door de 'comptroller of the treasury' over werden teruggefloten (met een beroep op een wetsartikel ui 1867 oid).

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Op zondag 17 februari 2008 18:12 schreef gronk het volgende:
Pond wordt een stukkie goedkoper tov de euro

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Op zondag 17 februari 2008 18:12 schreef gronk het volgende:
Pond wordt een stukkie goedkoper tov de euro

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Op zondag 17 februari 2008 19:03 schreef icecreamfarmer_NL het volgende:

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tja drastische maatregelen en wat ik nog wel het ergste vind is dat de belastingbetaler kan gaan betalen voor de fouten van Mangagers en aandeelhouders

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Op zaterdag 16 februari 2008 22:32 schreef gronk het volgende:

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http://www.washingtonpost(...)AR2008021302783.html

dus.

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Op maandag 18 februari 2008 09:37 schreef freud het volgende:

En van een behoorlijk persoon ook zeg!

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When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.

The writer is governor of New York.

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Foreclosure, for Closure
What's wrong with the Bush and Clinton plans to suspend foreclosures.
By Daniel Gross
Posted Friday, Feb. 15, 2008, at 1:03 PM ET

Why stave off foreclosures?
Foreclosures have become a major political issue. Ever since December, Hillary Clinton has been making daily calls for a 90-day moratorium on foreclosures. The Bush administration has been inching toward an anti-foreclosure policy. The Hope Now alliance was created in October as a voluntary industry effort to aid troubled borrowers. In December, the White House and Treasury Secretary Henry Paulson encouraged Hope Now members to offer interest-rate freezes and refinancing for certain qualified borrowers as part of an effort to avoid foreclosures. This week, the administration rolled out Project Lifeline, which offers qualified borrowers the chance to freeze foreclosure proceedings for 30 days. (Coming next: Operation Desperation.)

All of these proposals are good ideas, and bad ideas, for the same economic reason: Forestalling more foreclosure delays price discovery.

After a bubble pops, markets go through a painful process in which they try to agree on prices for formerly inflated assets. This is called "price discovery." When the bubble is in stocks, price discovery happens very quickly. A stock can go from $60 to $0 in a matter of days, if not hours, and sometimes did when the Internet bubble popped in 2000. From a macroeconomic perspective, such stock price discovery is painful but not necessarily devastating. The people who own bubbly stocks lose money. People who bought the stock on margin—i.e. they borrowed to buy it—lose a lot money. Banks who lent to high-flying firms frequently must write off loans. And companies that supply, or service, or depend on the afflicted firms may suffer as well. But, as when the tech bubble popped, stock price discovery usually doesn't lead to systemic failures.

By contrast, the process of price discovery in housing, and housing-related credit, has been much slower—and it has much more dire systemic implications. The housing market peaked in 2006, and it has been slowly slumping. But nationwide, according to the Case-Schiller index, housing prices have fallen only 8.4 percent in the past year. Home prices in some areas of the country may need to fall 30 percent in order to find bottom. That process is likely to take years rather than months.

The slope of the housing decline has been gentle because houses can't be flipped like stocks. People live in their homes, and there are big transaction costs associated with selling them. The market isn't very liquid. There's another reason housing prices have been slow to fall. There are all kinds of incentives for everyone involved in the housing market to push off the day of reckoning, to delay the process of price discovery.

Start with the homeowner. Homes are highly leveraged purchases, whether it's 20 percent, 10 percent, or 0 percent down. Owners of existing homes are reluctant to mark down the value of their homes 20 percent overnight because, in many instances, it will wipe out their equity. Homebuilders and condo developers don't like to lower prices quickly because it makes those who bought in their development five months earlier feel like chumps. The banks don't want to concede that the houses they lent against are suddenly worth a great deal less than they were a few months ago. Investors who bought the bonds created by slicing and dicing mortgages—and then leveraged up their positions by borrowing money—get massacred when prices fall. The same holds true for bond insurers like Ambac and MBIA, which insured structured finance products created by lashing groups of mortgage-related securities together.

And so, since the bubble popped and home prices ceased to rise, desperate players in the market have taken a series of actions intended to delay price discovery in housing. Rather than cut prices, sellers began to throw in free cars or other inducements to buyers who paid the asking price. Brokers reduced their commissions. Builders started including all sorts of extras (fancy kitchens, pools, etc.) for no additional price. Every link in the chain sacrificed margins and profits rather than cut prices. The Wall Street Journal reported last year that homebuilders were funneling large cash payments to buyers through third-party marketers, in effect reducing the price buyers had to pay while publicly reporting that sales prices remained buoyant.

Such measures were like throwing sandbags at a rising river. And it hasn't worked. The carnage in subprime loans has led to a spate of foreclosures. When banks or investors take over properties, they recoup whatever they can by placing it on the market quickly and accepting any reasonable offer. When foreclosed properties are dumped onto the market and sold at fire-sale prices, they establish new comparable sales on a given street or neighborhood. It might take a solvent home-seller 18 months to mark down the price of his house by 20 percent. A bank will do it in 18 days.

Foreclosure also has the effect of hastening price discovery on the mortgages on those homes, and on the bonds backing them. Here, again, the impact can be devastating to those who bought the assets with a great deal of leverage. Hedge funds and other institutions sitting on the depreciating debt either had to put up more collateral to maintain their leveraged positions, or dump the assets to raise cash. Bond insurers must increase reserves to prepare for defaults of the bonds they insured. And if the bond insurers fail, the financial firms that purchased insurance from them will have to take their own write-downs. The potential for massive systemic problems is the reason there's been so much discussion between financial institutions and government regulators about trying to orchestrate some sort of bailout for the bond insurers.

In general, cleaning up quickly after popped bubbles is good for the economy, because it enables everybody to move on. Over the years, the American economic system has proved to be quite adept at doing so. And as Japan's experience in recent years shows, refusing to deal with the overhang of bad debt can condemn an economy to a lengthy period of slow growth. But I doubt there's the political will to allow the fast price discovery allowed by foreclosures to continue. While it would certainly bring long-term economic benefits, the short-term social, financial, and political consequences of a rapid clearing of the housing mess are too much to bear. As the year goes on, expect presidential candidates and government officials to keep throwing lifelines and buckets full of hope at the housing market.

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Op maandag 18 februari 2008 16:50 schreef henkway het volgende:
mensen worden de onheilstijdingen moe, ze denken, t zal wel meevallen en gaan weer aandelen kopen
tot over een half jaartje als de bestedingen van de amerikanen wel erg achterblijven, doordat ze geen nieuwe creditdcards meer kunnen krijgen.

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Op maandag 18 februari 2008 16:52 schreef JimmyJames het volgende:

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En als de ami's iets minder uitgeven is het gedaan met de wereldeconomie? Dacht het niet.
Gewoonlijk is het wanneer jan en alleman reppen over een recessie en over hoe slecht het wel niet gaat op de beurs dat je moet instappen. Het is nog niet te laat koopjes te over.

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Op maandag 18 februari 2008 18:34 schreef henkway het volgende:

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Als ING een winstdaling met drie miljard bekend maakt, dan gaat de koers nog omhoog.

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Op maandag 18 februari 2008 10:38 schreef SeLang het volgende:
Hier nog een goed artikel waar ik het 100% mee eens ben.
Helaas is het een verkiezingsjaar dus het wordt pappen en nathouden
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In general, cleaning up quickly after popped bubbles is good for the economy, because it enables everybody to move on. Over the years, the American economic system has proved to be quite adept at doing so. And as Japan's experience in recent years shows, refusing to deal with the overhang of bad debt can condemn an economy to a lengthy period of slow growth.

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Last update: 12:32 p.m. EST Feb. 14, 2008Print RSS Disable Live Quotes

SAN FRANCISCO (MarketWatch) -- Bond insurers have four to five business days to re-capitalize themselves enough to keep their crucial AAA credit ratings, New York Governor Eliot Spitzer said during a Congressional hearing on the $2.4 trillion industry on Thursday. If that doesn't happen, regulators will have to step in and separate bond insurers' municipal businesses from their more troubled structured finance units. "We will need to move in that direction. It is not our first choice but time is short," Spitzer said. "In the next for or five bus days we would like

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Citigroup, which has been raising funds since taking a huge hit from the U.S. subprime mortgage meltdown, has sold its Japan headquarters to rival Morgan Stanley in a deal reportedly worth $445 million.

For Morgan Stanley, the move adds to more than $18 billion of property investments in Japan in the past decade.

Citigroup reported last month a record quarterly loss and wrote off $18.1 billion for investments damaged by a downturn in the U.S. housing market and a subsequent credit crunch.

The bank said it planned to raise $14.5 billion, including from the Government of Singapore Investment Corp. and the Kuwait Investment Authority and Saudi Prince Alwaleed bin Talal, and has also floated the sale of peripheral businesses, such as a Brazilian credit card operation.

Citigroup said in a statement on Tuesday that it had completed the sale-and-lease back deal of the Citigroup Center in Tokyo’s Shinagawa district as part of efforts to improve Citibank Japan’s balance sheet and cut risk of holding property assets.

Neither Citigroup nor Morgan Stanley disclosed the financial terms of the deal, but the Nikkei business daily said the transaction was worth 48 billion yen ($445 million).

Morgan Stanley, which made the acquisition through a Germany-based real estate fund, has been one of the most active foreign players in Japanese property, where tight office supply and rock-bottom vacancy rates are pushing up rents.

Last year it paid $2.4 billion to buy 13 hotels from All Nippon Airways. It has also bought a stake in Japan’s third-biggest beer maker, Sapporo Holdings Ltd., to work with it in the real estate business.

This month it sold the land and building of the Westin Tokyo hotel, located in central Tokyo, to Singapore’s largest sovereign wealth fund, the Government of Singapore Investment Corp. for around 77 billion yen, according to the Nikkei business daily

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Op dinsdag 19 februari 2008 15:23 schreef gronk het volgende:
D'r wordt hier en daar al gezegd dat Citigroup de amerikaanse Northern Rock is....

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Op dinsdag 19 februari 2008 15:29 schreef ItaloDancer het volgende:

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In de zin dat de Amerikaanse overheid het grootste bedrijf ter wereld altijd te hulp zal schieten... ja.
Verder is het een vreemde vergelijking

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ING heeft in het vierde kwartaal 194 miljoen euro afgeschreven op riskante beleggingen. Dat is duidelijk geworden bij de presentatie van de jaarcijfers van het bank- en verzekeringsconcern. In het derde kwartaal was 122 miljoen euro afgeboekt.

De afschrijvingen zijn minder groot dan werd gevreesd. Er zijn Amerikaanse en Europese banken die al miljarden hebben afgeschreven door de kredietcrisis. Voor eventuele tegenvallers is uit voorzorg wel 750 miljoen euro gereserveerd.

ING heeft in 2007 een winst gemaakt van 9,2 miljard euro. Een jaar eerder was de winst 7,7 miljard euro.

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Step one is the worst housing recession in US history. House prices will, he says, fall by 20 to 30 per cent from their peak, which would wipe out between $4,000bn and $6,000bn in household wealth. Ten million households will end up with negative equity and so with a huge incentive to put the house keys in the post and depart for greener fields. Many more home-builders will be bankrupted.

Step two would be further losses, beyond the $250bn-$300bn now estimated, for subprime mortgages. About 60 per cent of all mortgage origination between 2005 and 2007 had "reckless or toxic features", argues Prof Roubini. Goldman Sachs estimates mortgage losses at $400bn. But if home prices fell by more than 20 per cent, losses would be bigger. That would further impair the banks' ability to offer credit.

Step three would be big losses on unsecured consumer debt: credit cards, auto loans, student loans and so forth. The "credit crunch" would then spread from mortgages to a wide range of consumer credit.

Step four would be the downgrading of the monoline insurers, which do not deserve the AAA rating on which their business depends. A further $150bn writedown of asset-backed securities would then ensue.

Step five would be the meltdown of the commercial property market, while step six would be bankruptcy of a large regional or national bank.

Step seven would be big losses on reckless leveraged buy-outs. Hundreds of billions of dollars of such loans are now stuck on the balance sheets of financial institutions.

Step eight would be a wave of corporate defaults. On average, US companies are in decent shape, but a "fat tail" of companies has low profitability and heavy debt. Such defaults would spread losses in "credit default swaps", which insure such debt. The losses could be $250bn. Some insurers might go bankrupt.

Step nine would be a meltdown in the "shadow financial system". Dealing with the distress of hedge funds, special investment vehicles and so forth will be made more difficult by the fact that they have no direct access to lending from central banks.

Step 10 would be a further collapse in stock prices. Failures of hedge funds, margin calls and shorting could lead to cascading falls in prices.

Step 11 would be a drying-up of liquidity in a range of financial markets, including interbank and money markets. Behind this would be a jump in concerns about solvency.

Step 12 would be "a vicious circle of losses, capital reduction, credit contraction, forced liquidation and fire sales of assets at below fundamental prices".

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Op woensdag 20 februari 2008 16:30 schreef ItaloDancer het volgende:
En weer is er niks aan de hand zogenaamd, hoe lang blijft dit nog doorgaan?

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Op woensdag 20 februari 2008 16:30 schreef ItaloDancer het volgende:
En weer is er niks aan de hand zogenaamd, hoe lang blijft dit nog doorgaan?

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Op woensdag 20 februari 2008 17:01 schreef tony_clifton- het volgende:

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Imo is het sentiment omgeslagen door gebrek aan negatieve berichten en daardoor een revival van het optimisme van de bullmarket.

Met andere woorden, niet zo lang.
Toch denk ik niet dat de crash snel zal komen. Voor een grote crash zijn er meerdere mini-crashes (3 is nog niet zoveel), en de groei is nog niet ten einde, enkel aan het vertragen.

Of het lang gaat duren weet ik niet, maar denk 't eigenlijk niet...

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Op woensdag 20 februari 2008 17:06 schreef simmu het volgende:

en als we het gaan hebben over depressie zijn we al heel wat verder in de penarie! (overigens denk ik wel dat een depressie/devaluatie combi is waar we uiteindelijk op af stevenen)

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Op woensdag 20 februari 2008 17:01 schreef tony_clifton- het volgende:

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Imo is het sentiment omgeslagen door gebrek aan negatieve berichten en daardoor een revival van het optimisme van de bullmarket.

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Op woensdag 20 februari 2008 17:06 schreef simmu het volgende:

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pas op dat je dingen niet door elkaar haalt: vertraging van groei = recessie. stilstand (of achteruitgang!) van groei is depressie.

en als we het gaan hebben over depressie zijn we al heel wat verder in de penarie! (overigens denk ik wel dat een depressie/devaluatie combi is waar we uiteindelijk op af stevenen)

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Op woensdag 20 februari 2008 17:12 schreef gronk het volgende:

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Oeh, wat zijn jouw rente-inschattingen?

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Op woensdag 20 februari 2008 18:30 schreef ItaloDancer het volgende:

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De macrocijfers van eind vorige week en van vandaag zijn anders behoorlijk slecht...
Dat ING het goed doet, tja, dat zal allemaal wel.
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Nee... een recessie is krimp (negatieve groei) over twee kwartalen of meer...
Een depressie is een diepe recessie die lang aanhoudt.

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Op woensdag 20 februari 2008 19:42 schreef simmu het volgende:

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wat de centrale banken gaan doen bedoel je?

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Op woensdag 20 februari 2008 20:10 schreef ItaloDancer het volgende:=

Rapid rate hikes may be needed once growth improves

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Dow? +50

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Op woensdag 20 februari 2008 20:32 schreef gronk het volgende:
Beurzen leven in een parallel universum. Dat je je daar nog iets van aantrekt

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Op woensdag 20 februari 2008 20:51 schreef ItaloDancer het volgende:

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Nou ja wel als je wat hebt ingezet op een daling

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Op woensdag 20 februari 2008 21:03 schreef gronk het volgende:

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Tsk. Ik heb 't idee (maar als ik ernaast zit, ook best hoor) dat heel veel beurshandel iets is wat zich afspeelt als onderonsje tussen grote institutionele beleggers. Ik wil niet zeggen dat die beurskoersen 'georkestreerd' zijn, maar ik kan me nauwelijks voorstellen dat je in dat geweld onafhankelijke , objectieve keuzes kunt maken. Als ze bij zo'n groot beleggingsfonds d'r anders over denken, ga je gewoon 't schip in.