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14 сентября, 15:50

Pro Policy Summit: Live updates and highlights

Highlights from discussions with Mnuchin, Ross and the CEOs of Virgin Galactic, Exelon and Box.

13 сентября, 12:01

Irma's wrath leaves Florida Keys reeling with onerous recovery ahead

MIAMI — Thousands of Florida Keys homes might be destroyed. There’s no power, phone service or safe drinking water. Thousands might have to be evacuated. And the island chain’s economy is at risk.The Conch Republic is reeling more than anywhere else in Florida after Hurricane Irma. And it could get worse. “Five or six days without electricity, without water and without fuel to get out. It’s going to start to get a little hairy,” said U.S. Sen. Marco Rubio, who toured the Keys after the storm made landfall Sunday in the Lower Keys. “You’re really alone down there.”With September mortgage payments due in days, Rubio and his Democratic counterpart, U.S. Sen. Bill Nelson, say lenders should consider giving homeowners a break on their monthly payment now that lenders Fannie Mae and Freddie Mac are offering storm survivors mortgage relief for as long as a year.“I will urge the Department of Housing and Urban Development that they work out not only federally financed mortgages but lean on the banking industry to have some forgiveness or suspension of monthly mortgage payments for a period of time to allow people to adjust back to their normal situation so they can pay their mortgages,” Nelson said.Both Nelson, Rubio and the congressman who represents the area, Republican U.S. Rep. Carlos Curbelo, also back tax breaks for storm survivors and small business assistance. Curbelo, who toured the Keys with Nelson and Rubio on Monday, said Key West wasn’t as badly damaged as feared. But the Lower Keys were badly damaged.“The big pain here is going to be financial in nature,” Curbelo said. “All these restaurant workers and hotel employees are going to be out of work for at least a week. That’s where we’re going to feel the greatest pain from the storm.”Rubio said he wondered about “the long-term impact, like the bait shop down there that goes two months without revenue. Can they survive? Will they be here even when the Keys reopen? So we have to think of that aspect of it. Temporary housing. Everything in between. I think restoring power and water to the Lower Keys is going to be a lot harder than people realize because of the unique nature of the damage.”So far, Upper and some Middle Keys residents in the 110-mile chain of islands have been allowed to return. But many residents haven’t been readmitted, and they’re starting to chafe with government officials who told them they needed to evacuate before the storm, only to deny them the right to return home.“I have friends that need help. I have supplies for them,” Key Largo resident Tony Gibus told The Miami Herald on Monday. “We’re capable people in the Keys, we don’t need our hands held. … We’re not tourists.”Making matters more tense was a Defense Department press release on Monday that said 10,000 residents who stayed behind might have to evacuate now because the Lower Keys are almost uninhabitable. It has since been removed from the DoD website, but the statement struck a nerve with some residents of the Keys, where suspicion of federal land grabs runs deep.Monroe County Administrator Roman Gastesi, who has one of the few working cellphones in the Keys, told POLITICO Florida that the DoD statement surprised him. There are no plans to evacuate more people, he said. “No surprise here,” Gastesi said, comparing the department’s evacuation estimate to the stuff of conspiracies. “The last time I checked, the Flat Earth Society had 67,000 members. Apparently, one of them works at DoD.”Rubio said the DoD statement was akin to disturbing a “hornet’s nest” in the Keys.A Defense Department spokeswoman said the “numbers provided were a planning estimate based on the evolving disaster situation. The Department of Defense continues to support FEMA in the aftermath of Hurricanes Irma and Harvey. Specifically, the Department is postured to provide humanitarian assistance, search and recovery, evacuation, and logistics support. Response operations are fluid, and we will provide updates as available."Monroe County officials, however, are also pushing back against the Federal Emergency Management Agency for publicly stating that as much as 25 percent of the housing stock in the Keys had been destroyed. FEMA later backed away from those estimates, a New York Times reporter tweeted Tuesday night quoting FEMA spokesperson Mary Hudak, who said "those were early estimates used for planning. I don't know that we can refute them but I don't know that we can confirm."Regardless of the housing stock destroyed, Nelson said he expects the Keys will spring back. “The Keys are conchs,” Nelson said. “They’re tough.”

03 сентября, 21:45

How To Make The Financial System Radically Safer

Authored by EconomicPrism's MN Gordon via Acting-Man.com, Preventing the Last Crisis Clear thinking and discerning rigor when it comes to the twisted state of present economic policy matters brings with it many physical ailments.  A permanent state of disbelief, for instance, manifests in dry eyes and droopy shoulders.  So, too, a curious skepticism produces etched forehead lines and nighttime bruxism.   The terrible scourge of bruxism and its potentially terrifying consequences. Curious skepticism can lead to the darnedest things, which is why Big Brother strongly recommends that citizens remain in a medication and cable TV-induced apathetic stupor. To make this happy outcome easier to achieve, stagnation in real wages was successfully introduced a number of moons ago; forced to work to exhaustion just to keep their heads above water, citizens tend to be more docile in their shrinking free time. [PT]   Nonetheless, these are small prices to pay for the simple delight that comes when a central planner opens their mouth and inserts their foot.  Last Friday, for example, Fed Chair Janet Yellen gave a speech to her friends and cohorts at the annual central banker’s powwow in Jackson Hole, Wyoming.  There she patted herself and the financial regulatory community on the back for what she believes has been a successful execution of financial regulations: “The events of the [2008] crisis demanded action, needed reforms were implemented, and these reforms have made the system safer.” How Yellen knows the reforms have made the system safer is unclear.  Like France’s impenetrable Maginot Line, the regulations Yellen lauds are backward looking.  They are suited to preventing the last crisis while ignoring new and greater threats amassing just beyond the horizon.   If mouse traps were designed like our nifty new financial regulations, this is what they would look like. Don’t you feel safer already?  [PT]   No doubt, the greatest of these mounting threats are of the Fed’s own making.  After adding $4 trillion to the Fed’s balance sheet and dropping the federal funds rate to near zero for many years they’re now in the early stages of their great endeavor to ‘normalize’ monetary policy. But, alas, it’s no longer a normal world.  Years of abnormal monetary policy has fabricated an abnormal world.  Surely something will break before things are bent back into place, assuming they ever get there.   Dead Wrong The reforms Yellen was referring to include the Dodd-Frank Act.  The Frank part of the regulation, if you recall, is former Congressman, and overall repulsive being, Barney Frank.  Despite being out of office for over four years, Frank’s grubby finger prints continue to besmirch the economy. The Dodd-Frank Act, which was rolled out in response to the 2008 financial crisis, has turned out to be a classic case of knee-jerk regulatory overkill.  President Trump has promised relief to certain aspects of the Dodd-Frank Act’s suffocating regulatory regime, including stress test and capital requirements. These requirements force banks to keep more capital on their books as opposed to investing it in interest-earning assets.   Das abominable Frank, who lives on in the Act named after him. After aiding and abetting  the very lending practices that brought Fannie Mae and Freddie Mac to their knees, he was somehow held to be the go-to person to work out a new set of regulations for the financial industry. He and Dodd created a telephone book-sized monstrosity of regulatory guidelines, which via implementation of administrative law by the bureaucracy has by now grown into several hundred telephone books of rules. The main effect of this was that the banking industry has become even more concentrated and so-called too-big-to-fail banks have grown even larger. They certainly are not happy with numerous aspects of the new regulations, but on the other hand, they no longer need to fear competition from upstarts, as compliance with this jungle of laws has essentially become unaffordable for institutions below a certain size threshold. [PT]   The rules also dictate how banks allocate their assets between highly liquid securities and illiquid loans – with greater preference for the former. Rolling back capital and stress test requirements would directly reduce compliance costs for banks and financial institutions.  It would also give banks greater autonomy in how they manage their lending operations. But Fed Chair Yellen, a dyed-in-the-wool central planner, has a very narrow focus.  In her world, more control via more regulations always provides for a more stable financial system.  Yet she’s dead wrong.   We were unable find more recent data than those depicted in the above chart, so we cannot comment on the current situation, but shortly after the GFC, business closing did begin to exceed the number of new start-ups. Note that this trend has been in place for a long time – and it goes hand in hand with the growth on regulations in the Federal Register. The longest interruption occurred during the Reagan administration, which is not a coincidence: it was the only time in the entire post-war era in which the number of regulations in the Federal Register actually declined. This is of course precisely what one should expect – it is not rocket science. Unfortunately the political and bureaucratic elites are so far removed from the real world in their echo chambers that they apparently don’t understand even the most simple cause-effect chains. We should add, Mr. Bernanke also echoed the false claim that the mortgage credit market – one of the most tightly regulated sectors of the economy –  somehow suffered from “too little regulation”. It should be obvious that his aim was to deflect blame from where it should have been rightfully placed: the loose monetary policy of the Federal Reserve and the system-immanent drawbacks of a fiat money-based fractional reserve banking system that can expand the supply of money and credit willy-nilly. [PT]   The new financial reforms that were instituted following the 2008 financial crisis have had the adverse effect of constraining economic growth.  U.S. gross domestic product growth has lagged behind asset price and debt growth.  Moreover, more businesses are vanishing than are being created. Barney Frank’s maze of regulations has made it harder for small businesses and entrepreneurs to access the capital needed to grow and create jobs.   How to Make the Financial System Radically Safer At the same time, the new financial reforms haven’t minimized risk.  Moreover, they’ve set taxpayers – that’s you – up for a future fleecing.  Congressman Robert Pittenger elaborated this fact in a Forbes article last year: “Even Dodd-Frank’s biggest selling point, that it would end “too big to fail,” has proven false.  Dodd-Frank actually created a new bailout fund for big banks–the Orderly Liquidation Authority–and the Systemically Important Financial Institution designation enshrines “too big to fail” by giving certain major financial institutions priority for future taxpayer-funded bailouts.” What gives? Regulations, in short, attempt to control something by edict.  However, just because a law has been enacted doesn’t mean the world automatically bends to its will.  In practice, regulations generally do a poor job at attaining their objectives.  Yet, they often do a great job at making a mess of everything else. Dictating how banks should allocate their loans, as Dodd-Frank does, results in preferential treatment of favored institutions and corporations.  This, in itself, equates to stratified price controls on borrowers.  And as elucidated by Senator Wallace Bennett over a half century ago, price controls are the equivalent of using adhesive tape to control diarrhea.   The dangerous conceit of the clueless… the house of cards they have built is anything but “safe” and they most certainly can not “fix anything”. Listening to their speeches that seems to be what they genuinely believe. A rude awakening is an apodictic certainty, but we wonder what or who will be blamed this time. Not enough regulations? The largely absent free market? As they say, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” (this quote is often erroneously attributed to Mark Twain: we think it doesn’t matter whether he created it, it is often quite apposite and this is a situation that certainly qualifies).  [PT]   The point is that planning for future taxpayer-funded bailouts as part of compliance with destructive regulations is asinine.  In this respect, we offer an approach that goes counter to Fed Chair Janet Yellen and the modus operandi of all central planner control freaks.  It’s really simple, and really effective. The best way to regulate banks, lending institutions, corporate finance and the like, is to turn over regulatory control to the very exacting, and unsympathetic, order of the market.  That is to have little to no regulations and one very specific and uncompromising provision: There will be absolutely, unconditionally, categorically, no government funded bailouts. Without question, the financial system will be radically safer.

08 августа, 13:47

Global Stocks Hit Another Record High, Ignore Slowing Chinese Trade

Following a sleepy overnight session, US futures are flat as are markets in Europe, while Asian stocks rose despite overnight trade data from China which unexpectedly missed across the board. As reported last night, Chinese export growth was the slowest since February while Import growth the weakest since Dec 2016, as both missed consensus estimtes. Paradoxically, the bad report sent the MSCI EM Asia stock index higher for a third day to its highest since November 2007, with the poor Chinese trade data promptly spun as positive: "It looks like China’s trade data is taken as a half-full omen with the softer (than expected) exports mitigating risks of U.S. protectionism,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore." Continuing an unprecedented run of record highs, global stocks inched up to a new all-time high on Tuesday, shrugging off China's data. The MSCI's all-country world index ticked up to set a new record high at 480.76 points. It was last up less than 0.1 percent at 480.54 points. The index, which tracks shares in 46 countries, is on track for longest monthly winning streak since 2003. According to Reuters, "shares across the globe have been hitting record highs in record low volatility supported by a benign environment for global growth." "Data continue to suggest a synchronized global expansion across both advanced and emerging market economies. Spill-overs from the rebound in emerging market demand are reflected in the fastest growth in world trade since 2010," said Fitch chief economist Brian Coulton. The Chinese trade data was so poor, pardon great, the Chinese yuan (and South Korean won) led gains as emerging Asian currencies advance on a broadly weaker U.S. dollar.  The onshore yuan strengthened as much as 0.4% to 6.6970 vs USD for biggest intraday rally since July 27, rising above 6.7 for the first time since October. In currency markets, the dollar dipped for a second consecutive day after rising on Friday following stronger-than-expected U.S. jobs numbers, which some analysts said bolstered the case for the Federal Reserve to raise interest rates further. However, many in markets remain unpersuaded the Fed will increase the cost of borrowing again this year. St Louis Fed President James Bullard said on Monday the central bank could leave rates where they are for now because inflation was not likely to rise much. "(They) seemed to oppose further rate hikes. That means they exactly reflect the current market expectations, which are limiting the dollar’s appreciation," wrote analysts at Commerzbank in Frankfurt in a morning note to clients. "It is still inflation that poses the problem," they added Overnight the Aussie dollar advanced on rising business confidence but - unlike the Yuan - was weighed down by disappointing China trade data. The Euro rose for second day as upside momentum remains strong, and last Friday's strong payrolls beat is largely forgotten. West Texas Intermediate crude started on the back foot but reversed during European hours; WTI crude continued its rise, and is rapidly approaching $50 again: the question is whether it can take out the resistance level and hold above it.  This morning, all eyes will be on the South Africa’s rand as lawmakers prepare to decide the fate of President Jacob Zuma in a secret ballot at 2:00pm local time (8:00am ET). The currency steadied after yesterday’s jump even as 1-week implied vol surged to a 4 month high. Markets remain in a holding pattern, with investors seeking catalysts amid the summer slowdown and the S&P hasn't moved more than 0.3% intraday for 13 consecutive days: the longest stretch on record. The focal point of this week looks set to be Friday’s U.S. inflation data, which will be key to the interest-rate outlook of the world’s biggest economy, Bloomberg writes. Two Federal Reserve officials said on Monday that soft inflation was a problem, but played down the risk of market disruption when the central bank starts shrinking its balance sheet. “Markets are in sleep mode,” Hussein Sayed, a strategist at Forextime Ltd., a retail currency broker, wrote in an emailed note. “Limited news flow is what can be blamed for the narrow trading ranges, but expect this to change as we get closer to Friday’s U.S. CPI release.” MSCI's broadest index of Asia-Pacific shares outside Japan proved relatively resilient, inching up 0.2 percent and back toward decade highs. Hong Kong's Hang Seng closed up 0.6 percent. South Korea dipped 0.2 percent, while Japan's Nikkei eased 0.3 percent and China's main markets edged up 0.1 percent.  Japan’s Topix index fell 0.2 percent at the close with SoftBank Group Co. declining even after profit topped estimates. Sony Corp. gained after it was added to the JPX-Nikkei Index 400. Australia’s S&P/ASX 200 Index lost 0.5 percent and South Korea’s Kospi index dropped 0.2 percent. The Stoxx Europe 600 Index was slightly weaker, headed for a second day of declines as most benchmark gauges in the region fell, though moves were not large. Germany’s DAX Index declined less than 0.05 percent while the U.K.’s FTSE 100 Index sank 0.1 percent. The MSCI All-Country World Index rose less than 0.05 percent to the highest on record. Energy company shares rose as oil prices steadied from recent falls as sources told Reuters Saudi Arabia would cut crude supplies next month. Futures on the S&P 500 Index dipped 0.1 percent to 2,475.25. Treasuries were little changed before a $24 billion three-year note auction, the first of three debt sales this week. In currencies, the euro climbed 0.1 percent to $1.1814. The Bloomberg Dollar Spot Index fell 0.1 percent, the largest fall in more than a week on a closing basis. The British pound declined less than 0.05 percent to $1.3044. South Africa’s rand rose less than 0.05 percent to 13.2396 per dollar. In rates, the yield on 10-year Treasuries rose one basis point to 2.26%. Britain’s 10-year yield climbed one basis point to 1.14%. In commodities, gold gained 0.2 percent to $1,260.24 an ounce, the biggest rise in more than a week. West Texas Intermediate crude rose 0.6% to $49.48 a barrel, the highest in more than a week. Bulletin Headline Summary from RanSquawk European equities trade with little in the way of firm direction. Miners underperform post-Chinese trade data FX markets also trade in a tentative manner with newsflow light throughout the EU session thus far Looking ahead, highlights include JOLTS, APIs and a US 3yr note auction Market Snapshot S&P 500 futures down 0.06% to 2,476.00 STOXX Europe 600 down 0.05% to 381.83 MSCI up 0.1% to 161.47 MSCI ex Asia up 0.2% to 532.62 Nikkei down 0.3% to 19,996.01 Topix down 0.2% to 1,635.32 Hang Seng Index up 0.6% to 27,854.91 Shanghai Composite up 0.07% to 3,281.87 Sensex down 0.8% to 32,028.33 Australia S&P/ASX 200 down 0.5% to 5,743.75 Kospi down 0.2% to 2,394.73 Gold spot up 0.3% to $1,260.97 U.S. Dollar Index down 0.2% to 93.30 German 10Y yield fell 0.4 bps to 0.455% Euro up 0.2% to 1.1813 per US$ Brent Futures up 0.3% to $52.54/bbl Italian 10Y yield fell 2.7 bps to 1.703% Spanish 10Y yield fell 2.1 bps to 1.438% Top Overnight News Republicans struggling to pass a major tax overhaul that doesn’t add to the federal deficit are discussing a kind of compromise: mixing permanent revisions with temporary rate cuts for individuals and businesses St. Louis Fed President James Bullard and Minneapolis’s Neel Kashkari said soft U.S. inflation was a problem, broadly in line with expectations that officials will keep interest rates on hold when they meet next month and announce the start of a gradual process to trim their holdings of Treasuries and mortgage-backed securities. South Africa’s rand could surge if President Jacob Zuma is ousted by a motion of no confidence in the nation’s parliament, though gains would reverse if Zuma survives the vote, analysts say China’s trade surplus widened for a fifth month in July as export growth remained solid and imports moderated, keeping the spotlight on a trade gap U.S. President Donald Trump aims to narrow Google Fires Author of Divisive Memo on Gender Differences Citigroup Agrees to $130 Million Settlement of Libor Claims China’s Trade Surplus Widens for Fifth Month as Imports Moderate Pfizer Is Said to Weigh Sale of Erectile Dysfunction Treatment Liberty Global 2Q Operating Cash Flow Beats Highest Estimate Rental Car Stocks May Move After Avis Cuts Profit Forecast InterContinental First Half Revenue Misses Estimates Pandora CEO Warns of Challenging U.S. Market Ahead; Shares Sink McDonald’s to Increase Restaurants in China to 4,500 from 2,500 Disney, Fox May Move After Positive Ad Market Comments From CBS AMD to Shift Some Orders to TSMC: Commercial Times China Keeps More Steel at Home as Exports Tumble to 2013 Low Wells Fargo Is Said to Face SF Fed Inquiry on Car Insurance: NYT Asian equity markets failed to sustain the momentum from the record closes seen in DJIA and S&P 500, as sentiment in the region soured amid relatively quiet news flow and as participants digested the latest Chinese trade data. ASX 200 (-0.6%) and Nikkei 225 (-0.3%) saw early selling pressure, with the Australian market the underperformer on broad based declines, aside from the mining sector which remained resilient after continued gains in iron ore prices. Hang Seng (+0.6%) and Shanghai Comp (+0.1%) were initially subdued after Chinese Imports and Exports both missed estimates, while regulatory concerns also persisted with the PBoC seeking to tighten fintech rules to prevent risks. However, both indices then recovered heading into the close. 10yr JGBs were flat as demand failed to garner support from the deterioration of risk tone in the region, while the 30yr auction was also uneventful with the results relatively in-line with the previous month. Chinese Trade Balance (CNY) (Jul) 321.2bln vs. Exp. 293.55b1n (Prey. 294.30bn). Chinese Exports (CNY) (Jul) Y/Y 11.2% vs. Exp. 14.8% (Prey. 17.3%) Chinese Imports (CNY) (Jul) Y/Y 14.7% vs. Exp. 22.6% (Prey. 23.1%) Chinese Balance of Trade (USD) (Jul) 46.70bln vs. Exp. 45.00bln (Prey. 42.75bn). Chinese Exports (USD) (Jul) Y/Y 7.2% vs. Exp. 11.0% (Prey. 11.3%) Chinese Imports (USD) (Jul) Y/Y 11.0% vs. Exp. 18.0% (Prey. 17.2%) Top Asian News HNA’s Singapore Partner Is Said to Explore Scaling Back Ties China Developers Sink as World’s Biggest Stock Rally Loses Steam Sony Bonds Lose Allure as Spread Too Tight, Says BNP Paribas Goldman Sachs TP Upgrade Pushes China Harmony to 11-Month High Hong Kong Stocks Advance on Earnings Optimism and Auto Sales Malaysia Weighs Dual-Class Shares as Exchanges Battle for IPOs Reliance Is Said to Plan Refinancing as $12 Billion Debt Matures Profit-Taking? SoftBank Drags Topix Down Despite Strong Earnings Directionless trade in another quiet summer trading session (Eurostoxx 50 flat), material names falling after mixed Chinese trade data as exports and imports missed expectations. Pandora among the worst performers in Europe following soft financial results. BTPs outperforming largely as yields fall to 6-week lows. As a reminder, yesterday's monthly bond purchases from the ECB showed the ECB bought more Italian bonds in July than the capital key would imply, as it bought EUR 9.623b1n Italian bonds, almost EUR 1.5bln more than the capital key would dictate. In turn, this has the GER-ITA 10Y spread tighten as much as 13bps. Top European News Rising U.K. Energy Imports Need Brexit Care, Centrica Says ECB Redemptions Boost Average Maturity of French Bond Purchases AA Hits Record Low; Credit Suisse Downgrades on Roadside Outlook Standard Life Has $4.8 Billion Outflows Before Aberdeen Deal Siltronic Drops After Sumco Wafer Capacity Expansion Plan Power Maker CEZ Boosts 2017 Earnings Forecast on Higher Margins Brexit Bill Somewhere Between Zero and EU100B, Jones Says U.K. Must Provide Clarity on Post-Brexit Laws, Top Judge Says In currencies,  the Aussie saw some selling pressure following the Chinese Imports and Export misses on expectations. AUD/USD came off best levels overnight and is could look to retest 0.79. The greenback struggled throughout the US and Asian sessions, as the gains seen on Friday were retraced. Fed speech was the them in the US yesterday, however, comments from Bullard and Kashkari were largely rebuffed by markets. A marginal flight to safety further weighed on the US dollar, as twitter reports stated US satellites detected North Korea moving 2 anti-ship cruise missiles to patrol boat on the east coast over the past few days, according to officials. Both EUR & GBP gained ground against the dollar, with cable looking for a break of 1.3050, however, ran into some offers around 1.3055. EUR/USD saw similar price action, breaking through 1.18, however finding some resistance above these levels. In the Yen, a spike through Friday's post NFP range caused some escalated selling pressure in USD/JPY, as the pair broke through 110.70 overnight, bears will look to target the 110.00 handle to spark any continued downside pressure In commodities, relatively quiet in the commodity complex with oil prices slightly firmer. Of note, industry sources noted that Saudi Arabia noted that Saudi Arabia is to cut crude allocations in September by at least 520k bpd. Australia July Port Hedland iron ore exports fell to 37.9mln tonnes vs. Prey. 43.lmln tonnes. China Commodities Trade Data showed July YTD copper and product imports fell 15.2% Y/Y to 2.62m1n tonnes. Looking at the day ahead, there is the NFIB small business optimism index for July (103.5 expected) and the JOLTS job openings data. In China, the July CPI (1.5% yoy expected) and PPI (5.6% yoy expected) data will be out in early Wednesday morning. Notable US companies due to report include: Walt Disney, CVS Health, Gartner and Priceline. US Event Calendar 6am: NFIB Small Business Optimism, est. 103.5, prior 103.6 10am: JOLTS Job Openings, est. 5,700, prior 5,666 DB's Jim Reid concludes the overnight wrap If it wasn't for the fact that my exponentially increasing domestic financial responsibilities force me to act as professional as I can be, I'd be tempted to make today's EMR last no longer than a couple of sentences as all you really need to know about markets at the moment is that yesterday's move in the S&P 500 (+0.16%) added to the record daily run of less than 0.3% moves in either direction. It’s now 13 days since we had a larger move using daily data back to 1927. The second longest streak of this length was of 10 days which has happened twice in history. The most recent time was in England's solitary football World Cup winning year (06 Jan 1966 - 19 Jan 1966), and the other between 15 Nov 1961 and 29 Nov 1961. So these continue to be remarkable financial times we are living through. To put the steady but relentless rally in the S&P in context, it is now 73 trading days since the S&P increased by more than 1% in any one day. Give it another 7 days and we will beat the prior record set back in November 06 and March 07. Although, given the current lull in the activity (VIX now back to below 10), we might even get close to the 100 day record set back in mid-July 1995 to early Dec 1995. To punctuate the quiet, this week we will get to hear the latest thinking from a few Fed speakers. Overnight, both the St. Louis Fed president Bullard and Minneapolis Fed Chief Kashkari sounded a bit dovish. On rates, Bullard noted that the Fed funds rate target is “likely to remain appropriate over the near term”, considering recent inflation data has “surprised to the downside”. On balance sheet unwind, Bullard is ready to start the Fed’s balance sheet unwind in September and Kashkari noted that shrinking the bank’s large portfolio will be very orderly and won’t be disruptive to financial markets. On inflation, Kashkari said “inflation has been coming up short, relative to our 2% target” and cautioned “that actually matters…because in future crisis, we really need people to believe in us". This morning in Asia, China’s July exports were lower than expectations at 7.2% yoy (vs. 11% expected; 11.3% prior), although imports were also lower at 11% yoy (vs. 18% expected), leading to a stronger trade surplus of $46.7bn (vs. $45bn expected). Asian markets sold off a little post the Chinese data, but recovered to be slightly down as we type. Across the region, the Nikkei (-0.3%), Kospi (-0.1%), and Shanghai Comp (-0.2%) are lower with the Hang Seng (+0.1%) slightly higher. Back to last night's session and US bourses strengthened further, with the S&P 500 and the Dow up slightly (+0.1% to +0.2%) and remaining at record levels. That said, trading volume was thin in the S&P, with the daily value traded at 0.14% of the index market cap, which is only ~40% of the historical average. Within the S&P, modest gains in consumer staples and IT were largely offset by losses in energy (-0.9%) and financials (-0.2%). In Europe, the Stoxx 600 dipped 0.1%, with a rise in the materials sector (+0.7%) largely shrugging off the softer German industrial data. Across the region, the DAX slipped -0.3%, while other markets were slight up, with the FTSE 100 (+0.3%), CAC (+0.1%) and the Italian FTSE MIB (+0.4%) higher. As a stock take for European reporting season thus far, DB’s Wolf von Rotberg notes that of the 74% of Stoxx 600 companies that have reported, 54% have beaten EPS expectations (in line to historical average, but lower than 1Q at 61%). EPS growth is running at 19%, ahead of the 8% consensus expectation for the companies that have reported so far. EPS beats have been strongest for tech (69%), energy (67%) and financials (66%, particularly banks). Excluding energy and financials, EPS growth does drop to ~3% for companies that have reported thus far. Over in government bonds, yields were broadly lower, with the German bunds (2Y: +1bp; 10Y: -1bps), Italian BTPs (2Y: unch; 10Y: -2bps) and OATs (2Y: +1bp; 10Y: -1bp) all slightly lower at the long end of the curve. Gilts were down 4bps at both the 2Y and 10Y after weaker consumer data (see below). Over in the US, the 10Y fell marginally (-1bp) yesterday, but has recovered a little this morning. Turning to currency markets and the Euro continues to edge higher, with the Euro/USD up 0.2% and Euro/Sterling up 0.3% to 0.905, which represent a ~7.5% gain since May and now getting close to its one year high of 0.9118. Elsewhere, the US dollar index dipped 0.1% overnight. In commodities, WTI oil slipped 0.4%, following reports of rebounding Libyan supply and compliance issues with promised OPEC production cuts only 86% in July. Currently, producers have gathered in Abu Dhabi for a two day meeting to discuss oversupply issues. So watch for any headlines. Elsewhere, precious metals were broadly unchanged (Gold +0.1%; Silver flat), while industrial metals were up modestly (Copper +0.7%; Aluminium +2.5%), Iron ore has continued to increase, up 2.8% overnight to be ~43% higher than its June low. Away from the markets, as part of its annual stress tests designed by the Fed and FHFA,Fannie Mae and Freddie Mac would need to draw between $34.8bn to $99.6bn in Treasury aid under a "severely adverse" scenario, with key assumptions including: i) a 6.5% decline in GDP, ii) a rise in the unemployment rate to 10% and iii) a 25% fall in home prices. Elsewhere, the rhetoric from North Korea has heated up, with its Foreign Minister declining to negotiate over its nuclear program until the US ceases hostile policies and noted that its nuclear weapons will only be used against US and its allies, and that the state will make the US pay dearly. Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, consumer credit was lower than expectations, up US $12.4bn in June (vs. $15.8bn expected; $18.3bn previous), leading the throughyear growth rate to slow a tenth to 5.7% yoy. Monthly growth in non-revolving credit fell to a 12-month low and was mainly responsible for the slowdown in overall growth. In Germany, the June industrial production stats were lower than expectations at -1.1% mom (vs. 0.2% expected) and 2.4% yoy (3.7% expected). However, despite the decline in June, annualized growth in output through Q2 stood at a sturdy 7.1% saar. In UK, the BRC retail sales monitor for like for like sales in July was in line at 0.9% yoy, which contrast the Visa-Markit survey earlier which pointed to a 0.8% yoy decline in consumer spending in July (vs. -0.2% previous, longest streak of declines since 2013). Elsewhere, the Halifax house price index rose 0.4% mom in July (vs. 0.3% expected), with the throughyear growth in the three-month average in line at 2.1% yoy. Looking at the day ahead, Germany’s June trade balance (23bn expected), current account balance (24.5bn expected), export and import stats (both 0.2% mom expected) are due in early morning. France will also report its June trade balance and current account figures. Over in the US, there is the NFIB small business optimism index for July (103.5 expected) and the JOLTS job openings data. In China, the July CPI (1.5% yoy expected) and PPI (5.6% yoy expected) data will be out in early Wednesday morning. Notable US companies due to report include: Walt Disney, CVS Health, Gartner and Priceline. Closer to home, we have Deutsche Post due to report in Europe.

08 августа, 03:52

Fannie, Freddie Would Need $100BN Bailout In New Financial Crisis

While the latest Fed stress test found that all US commercial banks have enough capital to survive even an "adverse" stress scenario, a severe recession in which the VIX hypothetically soars to 70, the two US mortgage giants would not be quite so lucky: according to the results from the annual stress test of Fannie Mae and Freddie Mac released today by their regulator, the Federal Housing Finance Agency, the "GSEs" which were nationalized a decade ago in the early days of the crisis, would need as much as $100 billion in bailout funding in the form of a potential incremental Treasury draw, in the event of a new economic crisis. Under the "severely adverse" scenario, i.e., a "severe global recession" U.S. real GDP begins to decline immediately and reaches a trough in the second quarter of 2018 after a decline of 6.50% from the pre-recession peak. The rate of unemployment increases from 4.7% to a peak of 10.0% in the third quarter of 2018. CPI declines to about 1.25% by the second quarter of 2017 (so not that much further from here) and then rises to approximately 1.75% by the middle of 2018. Outright deflation is not even considered. In addition, equity prices fall by approximately 50% from the start of the planning horizon through the end of 2017, and equity volatility soars, approaching levels last seen in 2008. Home prices decline by approximately 25% , and commercial real estate prices fall by 35% through the first quarter of 2019.  The Severely Adverse scenario also includes a global market shock component that impacts the Enterprises’ retained portfolios. The global market shock involves large and immediate changes in asset prices, interest rates, and spreads caused by general market dislocation, uncertainty in the global economy, and significant market illiquidity. Option-adjusted spreads on mortgage-backed securities widen significantly in this scenario. Most interesting is the following provision in the "severly adverse" scenario: the global market shock also includes a counterparty default component that assumes the failure of each Enterprise’s largest counterparty. Which, of course, is ironic because the Fed's own stress test of commercial banks did not anticipate any bank failing. The global market shock is treated as an instantaneous loss and reduction of capital in the first quarter of the planning horizon, and the scenario assumes no recovery of these losses by the Enterprises in future quarters. The two companies, which buy mortgages from lenders, wrap them into securities and make guarantees to investors in case the loans default backing more than $4 trillion in securities, would need to draw between $34.8 billion and $99.6 billion in U.S. Treasury aid under a “severely adverse” scenario, depending on how they treated assets used to offset taxes, of which $42.6 billion would go to Freddie and $57 billion to Fannie. The losses would leave $158.4 billion to $223.2 billion available to the companies under their bailout agreements. The US government nationalized Fannie and Freddie in 2008, injecting them with $187.5 billion in bailout money. Nearly ten years later they will have repaid taxpayers about $275.9 billion by the end of next month, assuming they pay their combined September dividend of about $5 billion. The companies have as much as $258 billion in taxpayer funding available under the terms of the PSPA funding commitment. According to Bloomberg, the surprisingly large funding "stress" gap is likely to be used both by proponents of letting the two companies build a larger capital buffer and by some policy makers who think such an effort isn’t needed. Recall that one of the longest-running financial debates within the financial community is whether the Treasury overstepped its boundaries when it bailed-in GSEs shareholders as part of their rescue in 2007, with various activist shareholders demanding a return to the pre-bailout status quo, a move which would likely result in substantial equity upside. Under the current terms of their bailout agreements, Fannie and Freddie are required to turn over nearly all profits to Treasury in the form of dividend payments. They are currently permitted to retain a capital buffer of $600 million apiece, a level which will fall to zero next year. FHFA Director Mel Watt has warned against letting the buffer disappear and said he may allow the companies to build some capital. The retained earnings, which would cut the taxpayer dividend, would only be enough to protect against small losses rather than the dramatic impact of a severe crisis, Watt and other FHFA officials have said. Meanwhile, as the debate over the proper size of the GSE buffer continues, the two companies have taken other steps over the past eight years to reduce their risk of losses in another crisis and reduce their reliance on a loss buffer. The companies’ books of business are experiencing their lowest default rates in years, and both have accelerated sales of new securities designed to protect them from some losses if defaults increase. While the losses projected in Monday’s report will not be large enough to eat through the full funding commitment available to the two companies, Mel Watt and others have said that they’re unsure of how the mortgage-bond market would react if the funding started to fall. Under the bailout agreements, the funds can’t be replenished. They can, however, be bailed out all over again and likely will be if the "severely adverse" scenario envisioned indeed strikes. The silver lining in this year's report is that Fannie and Freddie’s bailout funding need was lower than estimated in prior years, "reflecting both slightly different tests and improving risk profiles at the companies." Last year, FHFA said the companies would need as much as $126 billion, while in 2015 the agency said they would need up to $157.3 billion.

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05 августа, 23:00

This Time, It's A Bubble In Rentals

Authored by Doug French via The Mises Institute, Sin City’s projected 5,000 new apartment units for this year makes no noise nationally in the latest real estate craze. “In 2017, the ongoing apartment building-boom in the US will set a new record: 346,000 new rental apartments in buildings with 50+ units are expected to hit the market,” writes Wolf Richter on Wolf Street. That is three times the number of units that came on line in 2011. Richter continues, “Deliveries in 2017 will be 21% above the prior record set in 2016, based on data going back to 1997, by Yardi Matrix, via Rent Café. And even 2015 had set a record. Between 1997 and 2006, so pre-Financial-Crisis, annual completions averaged 212,740 units; 2017 will be 63% higher!” I’ve written before about the high-rise crane craze in Seattle, but that’s nothing compared to New York and Dallas, that are adding 27,000 and 25,000 units, respectively. Chicago is adding 7,800 units despite a shrinking population and rents decreasing 19 percent. Not surprisingly, Fannie Mae and Freddie Mac are financing this rental housing boom. I wrote recently, the GSEs made 53% of all apartment loans in 2016, down from their combined 68% market share in 2012. “So, their conservator, The Federal Housing Finance Agency (FHFA), recently eased the GSE’s lending caps so they can crank out even more loans.” Mary Salmonsen writes for multifamilyexecutive.com, “Currently, Fannie and Freddie are particularly dominant in garden apartments [and] in student housing, with 62% and 61% shares, respectively. The two remain the largest mid-/high-rise lenders but hold only 35% of the market.” Mr. Richter warns us, “Government Sponsored Enterprises such as Fannie Mae guarantee commercial mortgages on apartment buildings and package them in Commercial Mortgage-Backed Securities. So taxpayers are on the hook. Banks are on the hook too.” But, for the moment, it’s build them and they will come; first renters, then complex buyers. Wall Street giant “The Blackstone Group acquired three Las Vegas Valley apartment complexes for $170 million, property records show,” writes Eli Segall for the Las Vegas Review Journal. “Overall, it bought 972 units for an average of $174,900 each.” Sales like this has developers going as fast as they can. I heard an apartment developer say Vegas has at least four more good years left in this cycle and is scrambling for new sites. In the land of Starbucks, Microsoft and Amazon, it’s thought the boom will never end. Richter writes, “the new supply of apartment units hitting the market in 2018 and 2019 will even be larger. In Seattle, for example, there are 67,507 new apartment units in the pipeline.” However, while no one was paying attention, “the prices of apartment buildings nationally, after seven dizzying boom years, peaked last summer and have declined 3% since,” Richter writes. “Transaction volume of apartment buildings has plunged. And asking rents, the crux because they pay for the whole construct, have now flattened.” As usual, cheap money entices developers to over do it, and the fall will be just as painful.

29 июня, 23:17

Fannie Mae: Mortgage Serious Delinquency rate declined in May, Lowest since December 2007

Fannie Mae reported that the Single-Family Serious Delinquency rate declined to 1.04% in May, from 1.07% in April. The serious delinquency rate is down from 1.38% in May 2016.This is the lowest serious delinquency rate since December 2007.These are mortgage loans that are "three monthly payments or more past due or in foreclosure".  The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.Click on graph for larger imageAlthough the rate is declining, the "normal" serious delinquency rate is under 1%.  The Fannie Mae serious delinquency rate has fallen 0.34 percentage points over the last year, and at that rate of improvement, the serious delinquency rate will below 1% this Summer.Note: Freddie Mac reported earlier.

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28 июня, 05:30

The Pefect Economic Storm Is About To Hit

The conference board and the gallup polls show that the consumer believes that economy is getting worse and not improving. Case-Shiller reports that the increase of housing prices has slowed. Fannie Mae reports that mortgage apps are declining, the banks confirm this. The central banks have... [[ This is a content summary only. Visit http://FinanceArmageddon.blogspot.com or http://lindseywilliams101.blogspot.com for full links, other content, and more! ]]

27 июня, 12:28

Двухнедельный испуг: сразу после присоединения Крыма Россия вывела из США $115 млрд

Федеральная резервная система США шпионит за средствами иностранных центробанков в Федеральном резервном банке Нью-Йорка в интересах Вашингтона

26 июня, 18:13

Freddie Mac: Mortgage Serious Delinquency rate declined in May, Lowest since May 2008

Freddie Mac reported that the Single-Family serious delinquency rate in May was at 0.87%, down from 0.92% in April.  Freddie's rate is down from 1.11% in May 2016.Freddie's serious delinquency rate peaked in February 2010 at 4.20%. This is the lowest serious delinquency rate since May 2008.These are mortgage loans that are "three monthly payments or more past due or in foreclosure".  Click on graph for larger imageAlthough the rate is still declining, the rate of decline has slowed. Maybe the rate will decline another 0.2 to 0.3 percentage points or so to a cycle bottom, but this is pretty close to normal.Note: Fannie Mae will report for May soon.

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26 июня, 15:03

Ипотечных кредиторов США ожидают трудные времена

Американских ипотечных кредиторов ожидают трудные времена, поскольку спрос потребителей на ипотечные кредиты замедляется, а конкуренция в отрасли только усиливается, как показал последний ежеквартальный опрос Fannie Mae, пишет Reuters.

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26 июня, 15:03

Ипотечных кредиторов США ожидают трудные времена

Американских ипотечных кредиторов ожидают трудные времена, поскольку спрос потребителей на ипотечные кредиты замедляется, а конкуренция в отрасли только усиливается, как показал последний ежеквартальный опрос Fannie Mae, пишет Reuters.

23 июня, 17:00

4 Financial Mutual Funds to Buy as Fed Hike Rates

Higher interest rates and lighter regulations are expected to benefit financial companies, making investment in sound financial mutual funds judicious

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22 июня, 21:51

США: индекс цен на дома FHFA в апреле повысился на 0.7%

По данным Федерального агентства по финансированию жилья (FHFA) индекс цен на дома в США, покупка которых осуществлялась с участием контролируемых государством ипотечных агентств Fannie Mae и Freddie Mac, в апреле повысился в месячном исчислении на 0.7% при ожидавшихся 0.5% и после повышения на 0.6% марте.

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22 июня, 20:30

США: индекс цен на дома FHFA в апреле повысился на 0.7%

По данным Федерального агентства по финансированию жилья (FHFA) индекс цен на дома в США, покупка которых осуществлялась с участием контролируемых государством ипотечных агентств Fannie Mae и Freddie Mac, в апреле повысился в месячном исчислении на 0.7% при ожидавшихся 0.5% и после повышения на 0.6% марте.

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22 июня, 16:32

США: цены на жилье выросли на 0,7% в апреле

Цены на жилье в США выросли в апреле на 0,7 процента по сравнению с предыдущим месяцем, согласно скорректированному на сезонность индексу цен на жилье (HPI) от Федерального агентства по жилищному финансированию (FHFA). Ранее сообщаемое увеличение на 0,6 процента в марте было пересмотрено с повышением до роста на 0,7 процента. Месячный HPI от FHFA рассчитывается с использованием информации о ценах на продажу дома от проданных ипотечных кредитов или гарантированных Fannie Mae и Freddie Mac. С апреля 2016 года по апрель 2017 года цены на жилье выросли на 6,8 процента. Для девяти районов переписи скорректированные с учетом сезонных колебаний цены с марта 2017 года по апрель 2017 год колебались от -0,1 процента в Восточном Южном Центральном дивизионе до +1,6 процента в Западном Южном Центральном подразделении. 12-месячные изменения были положительными от +4,7 процента в Западном Северном Центральном дивизионе до +8,9 процента в Горном дивизионе. Информационно-аналитический отдел TeleTradeИсточник: FxTeam

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12 июня, 16:30

The Zacks Analyst Blog Highlights: East West Bancorp, Summit Financial Group, 1st Source, First Bancorp and People's Utah Bancorp

The Zacks Analyst Blog Highlights: East West Bancorp, Summit Financial Group, 1st Source, First Bancorp and People's Utah Bancorp

10 июня, 22:18

Fannie Mae's Brooks to be nominated U.S. deputy Treasury secretary -Axios

President Donald Trump plans to nominate Brian Brooks, general counsel for Fannie Mae, as deputy secretary of the U.S. Treasury, Axios reported on Saturday, citing three sources it said had knowledge of ...

09 июня, 20:46

The House Takes Another Step Toward Repealing Dodd-Frank

The chamber voted along party lines to weaken key Obama-era financial reforms.

10 мая 2013, 06:16

Про MBS и ипотечные кредиты

Мы совсем как то эту тему забросили, а зря. Все же на этот рынок много завязано. О каких суммах идет речь? Объем ипотечных кредитов (для жилой недвижимости, коммерческой, сельскохозяйственной) составляет 13.1 трлн долл на конец 2012 года. Из этих 13.1 трлн более 9.4 трлн записано на домохозяйства. Под эти кредиты выпускали тоннами всякого MBS’осного шлака, процесс полностью остановился в 2008 году. Сейчас совокупный объем MBS составляет 7.54 трлн, т.е. почти 58% всех ипотечных кредитов было секьюритизировано. На пике зверства было под 70%. Из 7.54 трлн около 80% эмитировано Government-sponsored enterprises (GSE) всякие там fannie mae и freddie mac, остальное остальное на частные структуры. Причем стоит обратить внимание на то, что в 2009 году более 4.4 трлн дефолтных бумаг (!) было изъято из частных структур в пользу государственных. Не будь этого, то все рухнуло. Программа TARP, кредитование ФРС и QE здесь не учитываются.Как это было...Чтобы оценить тенденции и масштабы, то лучше всего на графике.Как видно, процесс сокращения ипотечных кредитов продолжается. Низкие процентные ставки не помогают, кредиты не берут. А выкуп MBS не помогает тем более, т.к. сам процесс выкупа не имеет ни малейшего отношения к способностям и желаниям заемщиков получать кредит. Все, к чему имеет отношение ФРС - это стимуляция дальнейшей активности бангстеров по секьюритизации ипотечных кредитов, но если нет роста кредитов, то и чисто теоретически не может быть никакого роста активности в MBS. Поэтому проблема не в предложении кредитов, т.е не в банках, а в спросе (заемщиках). Нет спроса на кредиты, а банки бы рады опять шарманку запустить.Максимум, что может получиться из этой безумной затеи ФРС - так это провоцирование отрыва башни у бангстеров . С тем, чтобы условия получения займов были столь простыми, что получить займ мог бы любой, кто имеет в активах хотя бы один чупа чупс и половину недопитой банки коки. Возврат к тому, от чего пришли. Ничего этих людей не исправит.Кто держит весь этот мусор?Разумеется больше всех у ФРС – 1 трлн на конец 2012 и 1.15 трлн в настоящий момент. Ни одна структура единолично столько не держит. Это 15% рынка на 2012, к концу 2013 будет держать все 20% рынка. Тем самым это означает, что ценообразование на этом рынке под полным контролем ФРС и дилеров. Проще говоря, вторичного рынка больше не существует.Почти 4.5 трлн у финансовых структур (1.6 трлн коммерческие банки, 350 млрд ипотечные трасты, 347 млрд страховые фонды, 223 млрд пенсионные фонды, 170 млрд у брокеров и так далее).Частный сектор (домохозяйства и корпорации) сократили вложения почти в ноль. Причем домохозяйства по каким то загадочным причинам начали скупать MBS тогда, когда они наиболее активно падали в цене. На тот момент (2007-2008) они были самым крупным покупателем на рынке, нарастив всего за 1.5 года объем MBS на 500 млрд до 1.02 трлн, а потом в период с 2009 по 2010 все продали, когда ФРС запустил QE1Я раньше вам говорил, но повторю. Эта операция была похожа на хорошо спланированный инсайд. Группа лиц инсайдеров и аффилированных лиц с ФРС примерно в конце 2007-середине 2008 знала, что будет неизбежный выкуп MBS со стороны ФРС для поддержания рынка и примерно тогда готовился план по банкротству Лемана. Учитывая, что бумаги продавались с дисконтом, то предположительно через частные счета и некоммерческие организации был проведен выкуп на 300-400 млрд бумаг, которые по рыночной цене не стоили и половину от номинала. А потом продавали по номиналу ФРС, заработав сотни процентов чистой прибыли. Также поступали и дилеры, но в отличие от юридических лиц, физиков и НКО никто проверять не будет, т.к. об этом никто даже не догадывается. Т.е. более, чем вероятно, что на инсайде смогли отмыть через мошеннические схемы более 150 млрд чистой прибыли.Основные выводы1. Роста кредитования нет.2. Эмиссии MBS нет, т.к. нет роста кредитования.3. Рынок MBS под полным контролем ФРС и дилеров. Еще никогда в истории одна структура не держала такую долю рынка. 15% на 2012 и 20% на конец 2013. Вторичного рынка больше не существует в свободном формате. Цены регулируются ФРС.4. ФРС частная лавочка бангстеров и инсайдеров, которая действует прежде всего в интересах бангстеров и инсайдеров.5. По множеству косвенных и прямых признаков, инсайд о вероятном запуске QE1 был еще в начале 2008 года. Много подозрительных теневых операций по переброски средств в НКО. Откуда у НКО пол триллиона баксов, которые выкупали это говно в момент острой паники и краха. По моим оценка отмыли не менее 150 млрд чистой прибыли.6. Когда MBS в объеме не увеличиваются, а ФРС выкупает под 40 млрд в месяц + когда ФРС монетизирует гос.долг США, то избыточная ликвидность абсорбируется на рынке акций. Реципиентом являются дилеры – те, кто работает с ФРС и получает ликвидность от ФРС. НЕ нужно питать иллюзий, что рост фондового рынка чем то фундаментально обоснован. Очередная гнусная операция по перекачки ликвидности и поддержанию рентабельности фин.сектора в условиях, когда активность клиентов спала на рекордно низкий уровень. Не будет QE = не будет роста рынка.7. Единственной хорошей новостью является то, что этот бардак выходит на финишную прямую. Когда они сосредоточили в руках почти всю возможную власть и активы, то прорыв этого чуда-юда неизбежен. Учитывая то, насколько все ухудшилось за последний год, то ждать осталось не так и долго. Еще никогда контроль над активыми не был столь тотальным и всеобъемлющим.Более детальная таблица держателей MBS

24 января 2013, 18:39

По следам монетарного безумия

Небольшая предыстория, чтобы понять, откуда растут ноги у монетарного безумия. Это важно понимать в условиях, когда система на полном ходу несется под откос.  Все началось задолго до того, как общественностью принято считать началом острой фазы кризиса. Первые серьезные проблемы появились в еще 2007 году, а не осенью 2008.Но сначала, что такое MBS? Объясню предельно кратко. Это структурированная облигация с определенным номиналом и процентными платежами, покупаемая инвесторами по образу и подобию обычных облигаций с небольшими отличиями. Кто является эмитентом? Либо квазигосударственные структуры (Ginnie Mae, Fannie Mae, Freddie Mac), либо инвестиционные фонды. На какой основе происходит эмиссия?Ипотечные кредиты населения объединяются в пул residential mortgage-backed security (RMBS)Коммерческие ипотечные кредиты объединяются в пул commercial mortgage-backed security (CMBS).Нарисовал схематично в общих чертах принцип работыДалее происходит секьюритизация кредитов и градация по качеству кредитов с присвоением соответствующего рейтинга. Самый высокий рейтинг соответствует якобы самым надежным кредитам и по ним наименьшие ставки. Соответственно наоборот с наименее надежными –сабпрайм кредитами.После этого происходит эмиссия MBS и продажа инвесторам. Не буду заостряться на ценообразовании, т.к. это весьма обширная тема, а скажу суть. Процентные ставки по MBS всегда ниже, чем процентные ставки по кредитам, образующих MBS. Так, например, если пул кредитов на 1 млрд долларов со средневзвешенной ставкой в 6%, то облигация будет точно ниже 6% годовых. Если инвесторы не готовы покупать по 6%, а просят 7%, то эмиссия облигации теряет всякий смысл.Отсюда вытекает две фундаментальные уязвимости.Первое. В отличие от стандартных облигаций, MBS крайне серьезно завязаны на денежном потоке, который образуется процентными платежами по кредитам, поэтому процентные ставки по MBS не могут быть выше процентных ставок по кредитам.Второе. В действительности, инвесторы не могут претендовать ни на какие залоги, поэтому формально облигация не имеет реального обеспечения, т.к. если происходит дефолт заемщиков и реализация их недвижимости на рынке, то это в самом лучшем случае может компенсировать лишь часть пула. Допустим, в пуле кредитов 10% оказались дефолтными и лишь 7% удалось реализовать, да еще с дисконтом в 20% из-за падение цен на недвижимость. Эмитент облигации в таких условиях не может в полной мере выполнить своих обязательств и инвесторы несут убытки, либо при исполнении обязательств эмитент понесет убытки пропорционально количеству дефолтных заемщиков.Но это в лучшем случае.В реальности процедура взыскания усложнена, т.к. из-за иерархической секьюритизации сложно доказать, кто фактически является собственников кредита. Вспомните, Foreclosure-gate в 2010 году, когда банки не могли доказать принадлежность кредита, что усложняло процедуру взыскания.Это потоки денег между контрагентами.Т.е. схема такая. Заемщик идет в банк за кредитом, получает деньги и покупает недвижимость. Коммерческий банк продает пул кредитов инвестфондам, как правило, с небольшим дисконтом, и инвестбанк получает пул кредитов и процентные платежи по нему от коммерческого банка. Далее инвестбанк структурирует кредиты, производит градацию по качеству и выпускает MBS. Инвесторы платят инвестбанку деньги за MBS, а от банка-эмитента получают процентные платежи и деньги при полном или частичном погашении облигации.Собственно, мотивация инвестбанков в покупке пула ипотечных кредитов заключается в том, чтобы заработать деньги на разнице между процентной ставкой по эмитированной облигации и процентными ставками по ипотечным кредитам.Коммерческие банки заинтересованы в перераспределении ответственности и снятию рисков невозврата.Инвесторы заинтересованы в получении доходов от MBS. Раньше деньги по MBS исправно платились,Все были заинтересованы в расширении этого рынка, но …Коллапс ипотечного пузыря с 2007 года вызвал обесценение mortgage-backed security и инвесторы стали просить премию за ипотечные пулы. Иными словами, эмиссия этого чуда-юда проходила по существенно более высоким ставкам.Все крупнейшие банки были достаточно сильно представлены в MBS, как со стороны инвесторов, так и со стороны эмитентов.Теперь рассмотрим этот процесс внимательно со стороны эмитента MBS. В активах у них ипотечные пулы, в пассивах обязательства по MBS.Начинается дефолт заемщиков (сужается денежный поток по выплате кредитов), падает цена не недвижимость, которая является залогом в пуле кредитов. Целые кластеры обесцениваются, но инвестбанк вынужден выполнять свои обязательства перед инвесторами.Допустим, к погашению подходит 10 млрд MBS. Раньше на каждые 10 млрд погашений, банки могли размещать по 30-50 млрд нового выпуска, тем самым происходил, как процесс рефинансирования, так и процесс расширения. А что случилось в 2007-2008?Эмиссия упала в ноль. Погашать надо, а рефинансировать не получается. Все, конец. Без ФРС теперь никуда.Во-первых: инвесторы начали просить премию и более высокие процентные ставки, тем самым многие выпуски теряли смысл при отсутствии рентабельности.Во-вторых: инвесторы значительно сократили свои вложения в этот рынок из-за опасения дефолтов после коллапса ипотечного пузыря и смены настроений. Т.е. раньше рефинансировали легко 10 млрд, а теперь максимум готовы купить 2-3 млрд.Так вот, банку нужно погасить 10 млрд, а купить в новой эмиссии готовы лишь на 2 млрд. Образуется дефицит ликвидности на 8 млрд. Что делать? Фондироваться на межбанке, просить деньги у ФРС, либо реализовывать свои активы на рынке.Фондироваться на межбанке не получалось, т.к. в начале был дефицит ликвидности, когда у других банков были теже самые проблемы и им тоже нужны были деньги. А потом возник кризис доверия, когда банки не могли открывать кредитные линии по причине, что не были уверены в платежеспособности контрагента.Реализовывать активы на рынке приходилось с дисконтном в десятки процентов, т.к. одновременно на продажу ринулись все, тем самым активы посыпались. В 4 квартале 2007 году произошли первые многомиллиардные списание у крупных банков. Собственно тогда стало окончательно понятно, что система пошла в разнос.Оставалось звонить ФРС.Звонки в ФРС стали происходит в аварийном режиме на постоянной основе с матерными выкриками : «Бен, что за ебанистика творится на рынке? Мы не может остановить падение MBS, у нас нет денег на поддержание штанов, мы банкроты»Разработка экстренных программ началась в 4 квартале 2007 года, запуск первых состоялся в декабре. Одна из первых программ – это Term Auction Facility (TAF) – временные аукционы для поддержания ликвидности в финансовой системе. Эта программа предоставляет банкам кредиты на 28 или 84 дня на тот случай, если кредитование через дисконтное окно ФРС по каким либо причинам не доступно, либо не востребовано банками.И понеслась.Март 2008. ЗапускTerm Securities Lending Facility (TSLF) программа, призванная увеличить показатели ликвидности непосредственно для первичных дилеров. Кредиты сроком на 1 месяц, обеспеченные залогами. Старт был в марте 2008, окончание действия 1 февраля 2010. Процентная ставка определяется по рыночной стоимости казначейских одномесячных векселей.Primary Dealer Credit Facility (PDCF) Это овернайт кредиты исключительно для первичных дилеров с целью стабилизации рынка РЕПО и устранения кассовых разрывов при отсутствии возможности фондироваться на необходимую сумму из других источников. Теоретически овернайт кредиты могут пролонгироваться бесконечно в формате действий данной программы. Ставка фиксированная и определяется ФРБ Нью Йорка. Лимиты программы формально безграничны, но фактически определяются уровнем залогов у первичных дилеров.Но ничего из того не помогло, исправить ситуацию не получилось. Обесценение MBS происходило дальше.Банки убивало то, что эмиссия MBS сжалось почти в ноль, а погашать MBS надо был в огромных количествах. Следовательно, дефицит ликвидности стал просто запредельным. Плюс сжатия денежного потока + падение цен на недвижимость и самого залога.В середине 2008 стало окончательно понятно, что должен быть крупный покупатель на рынке MBS, чтобы стабилизировать обесценение. Вариантов не оставалось – это только ФРС.Сейчас в 2013 это кажется странным, но тогда монетарное блядство и разврат были далеко не так запущены, как сейчас. Опыта QE не было. Было просто дикостью, что ФРС будет скупать активы на открытом рынке, ни одному в голову такое прийти не могло. В середине 2008 они придумали гениальный план, суть которого заключалась в следующем, что раз просто так начать QE не получится, то необходимо устроить панику и условия тотального страха, чтобы законодательно оправдать помощь. Повторюсь, в 2008 году банкиры были очень запуганными, это сейчас они обнаглели в конец и делают, что хотят. Тогда еще были рамки приличия. Как устроить панику? Обанкротить банк? Какой банк? Достаточно крупный, чтобы вызвать глобальную панику, но недостаточно крупный, чтобы привести к параличу банковской системы.Выбор был невелик: Goldman Sachs, Morgan Stanley, Merrill Lynch и … Lehman Brothers. Не будем заостряться, почему это был Lehman Brothers, но так получилось, что козлом отпущения должен был стать именно он.Существует миф, что якобы виной кризиса стал Lehman Brothers. Это не так. В оправдание этого банка скажу, что вся банковская система была на тот момент банкротом, т.к. экспозиция по структурированным продуктам была запредельная, и этот рынок был парализован. Сказать, что финансовый кризис спровоцировал LB – это расписаться под собственной профнепригодностью.Lehman Brothers – это не более, чем предлог для начала экстренных спасительны мер, это был инструмент для спасения всей банковской системы, т.к. необходимо было начать программы TARP и выкуп MBS. Банкротство Lehman Brothers шло в полном соответствии с планом Казначейства и ФРС по спасению банковской системы. Банкротство Lehman Brothers было спланированным и подготавливалось с весны 2008, когда стало понятно, что без выкупа не обойтись. Если бы не начали выкуп, то через несколько дней навернулся бы другие инвестбанки, там были дичайшие кассовые разрывы.Ниже задолженность банков перед ФРС по кредитам. Отмечу, что Citi и Bank of America в тот момент были в более плачевном положении, чем Lehman Brothers.На графике черной линией консодированная задолженность Леман перед ФРС по кредитным линиям.Видно, что она на уровне других банков, а пиковая задолженность в пару раз меньше, чем у конкурентов, что как бы намекает на то, что дела у других банков мягко говоря шли еще хуже.Потом Генри Полсон говорил, что они обанкротили Леман по причине, что не хотели тратить деньги налогоплательщиков? Брехня и вранье.Через пару дней они начали заливать в систему триллионы, что видно нижеЗдесь я провел клиринг всех операций кредитования и посчитал кумулятивную экспозицию по всем программам.Расшифровка программ. Про три программы расcказал выше. Остальные:Commercial Paper Funding Facility (CPFF) – программа обеспечивает поддержку ликвидности для американских эмитентов корпоративных облигаций через прямой выкуп трехмесячных облигаций (обеспеченных и необеспеченных активами) по специально созданным лимитам. Операции проводились до полного погашения обязательств. Ставки кредитования для необеспеченных бумаг OIS + 300 базисных пункта, а для обеспеченных OIS + 100 базисных пунктаTerm Securities Lending Facility (TSLF) – программа, призванная увеличить показатели ликвидности непосредственно для первичных дилеров. Кредиты сроком на 1 месяц, обеспеченные залогами.Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF) – это программа экстренного кредитования фондов денежного рынка под залог коммерческих бумаг, обеспеченных активами. Процентная ставка фиксированная и устанавливается ФРБ Нью Йорка на день выдачи (Primary Credit rate). Лимит кредитования устанавливается в зависимости от предоставленных залогов. Срок кредитования от нескольких дней до нескольких месяцев.На графике не отражены своп линии и Maiden Lane for Bear Stearns, American International Group – целый ряд программ поддержки для Bear Stearns и AIG. В совокупности на пике без учета своп линии впрыск ликвидности доходил до 1.25 трлн долларов.В принципе, надо понимать, что для ФРС не было никакой проблемой спасти Леман. Речь шла о разрыве в 15 млрд баксов. Они не дали 15, чтобы потом влить 1.5 трлн. Чувствуйте разницу? Дело в том, что он вполне мог спасти по образу и подобию Bear Stearns, когда дал гарантии по части обязательств банка. Но на Леман закрыли лимиты тогда, как банки, так и ФРС. Программы кредитования проходили достаточно мутно. т.к. в залог формально давали активы, а по факту мусор, т.к. оценить стоимость было сложно и тупо оценивали все по номиналу.Так вот, откуда объем в 1.25 трлн у QE1? Почему не 600 млрд или 1 трлн? 1.25 трлн = пику кредитования. Т.е. QE1 замещал кредит на чистый впрыск ликвидности. Те. Банки погашали кредиты и одновременно получали деньги через QE1.Почему выкуп MBS, а не трежерис? Понятно из статьи.QE2? Что это? Экспериментальная программа, чтобы проверить обратную реакцию системы. Чистый вандализм и произвол. Они хотели проверить, приведет ли программа к негативным последствиям на валютном и долговом рынке? Не привела, все осталось в порядке и запустили QE3 в уже безлимитном форматеПрограмма QE3. Основная цель – монетизация гос.долга и обеспечение рентабельности бангстеров в условиях, когда реальный сектор высушен, когда невозможно генерировать прибыль. К заявленному спасению экономики программа не имеет никакого отношения. Это очередное прикрытие банкиров.Посмотрите, насколько херовые результаты по доходам инвестбанков.Конъюнктура такая, что делать деньги стало практически невозможно. Разумеется, опять приходит на помощь ФРС уже с QE3 ))Вероятно, QE3 - это последнее, что сделает ФРС. Система в критическом состоянии находится. Обратные связи полностью деградировали. Сейчас производят интервенции на рынке акций в аварийном режиме, но не знаю, поможет ли? Думаю, что нет. По совокупности факторов, мировая экономика находится в более худшем состоянии, чем в 2009 году. Основная беда, что все идет в холостую, в пустоту. Рентабельность приращенного гос.долга близка к нулю