31 mayo 2010

optimismo o pesimismo

Interesante programa que presenta los tres aspectos de la realidad actual: un optimista seguro de que la crisis tiene solución (ojalá acierte), uno neutro y uno negativo que pide una purga del sistema bancario europeo (preferible hacerla ahora que dentro de unos años). Tu mismo: http://www.youtube.com/watch?v=nuysYXlJ43I&feature=player_embedded

Otros comentarios sobre la crisis de deuda del New York Times:
http://video.nytimes.com/video/2010/05/27/business/1247467933725/explaining-europe-s-debt-crisis.html?ref=global

Reflejan las dudas de que el paquete de rescate de los famosos 750.000 millones de euros (1 trillón de dólares) sea suficiente.

Y para pesimistas, Marc Faber: una especie de Mad Max a lo salvaje:


¿Y si colapsa la deuda pública?
Daniel Luna 28/5/10

“Compre oro y márchese a vivir a una casa en el campo, donde no van a caer bombas”. Ésta es la recomendación de Marc Faber, el inversor que anticipó tanto la crisis actual como la de 1987, cuando avisó a sus clientes de que vendieran las acciones de Wall Street días antes del Lunes Negro. “Los Gobiernos están al borde de la bancarrota y harán cualquier cosa para sobrevivir: primero imprimirán dinero, y cuando esto no funcione recurrirán a la guerra”.

Faber, autor del boletín mensual The Boom, Gloom and Doom Report, y conocido también como Doctor Doom (muerte, fatalidad) por sus lúgubres predicciones, habló el fin de semana pasado en el foro económico Mises Circle, organizado por el Instituto Ludwig von Mises en Nueva York para analizar la situación de los mercados financieros y la responsabilidad de los bancos centrales en la actual crisis económica.

“Entre 2000 y 2007, Greenspan y Bernanke aumentaron el crédito en Estados Unidos cinco veces por encima de lo que creció el PIB, una expansión mayor que la que precedió a la Gran Depresión de 1929”, explicó Faber. “La Reserva Federal ya nunca volverá a políticas restrictivas porque para esta economía adicta al crédito eso sería un veneno, así que van a mantener los tipos al 0% durante mucho tiempo”.

Esta política expansiva, sumada a la lista de obligaciones asumidas por el Gobierno Federal para las que no existen recursos (Seguridad Social, Medicaid, Medicare, rescates bancarios, etc.), llevará al país a la hiperinflación.

Fuente: previsiones oficiales del Gobierno Federal (en ausencia de reformas)

Y es que, “si se cuentan esas obligaciones la deuda del país supone el 800% de su PIB. Los Gobiernos occidentales han crecido como un cáncer y no pueden pagar, pero antes de reconocerlo oficialmente imprimirán dinero de forma masiva porque es lo más fácil. Así se aplaza el problema para el que llegue después, y al final se crea una crisis todavía mayor. En el 2008 cayeron los mercados financieros; el próximo episodio será la caída de los Gobiernos”.

Según Faber, cuando eso suceda iremos a la guerra: “Y si usted vive en una ciudad, en la próxima guerra le envenenarán el agua, le cortarán la electricidad y su tarjeta de crédito y su transporte no funcionarán. Ni siquiera podrá volver a casa. Así que váyanse a vivir al campo, en el medio de la nada, lejos del peligro”, aconseja. No todos los participantes en el Mises Circle fueron tan pesimistas, pero la convicción de que la inflación está a la vuelta de la esquina fue unánime.

El inversor Christopher Whalen, editor del boletín The Institutional Risk Analysis, cree que llegará tras el rescate de los estados europeos: “La Reserva Federal ha reanudado su programa para proveer de liquidez a la UE [con el objetivo de] rescatarla de un colapso deflacionario, pero la dimensión de su endeudamiento hace ese rescate inviable. Los políticos han utilizado la deuda para evitar subir impuestos y reducir gastos; ahora los Gobiernos europeos están arruinados y el momento de la verdad se acerca”.

Sólo quedan dos opciones, según Whalen: “Aplicar las recetas necesarias, que traerán una fuerte contracción económica y muchos conflictos, o imprimir dinero. Lo primero no lo quiere hacer nadie, ni en Estados Unidos ni en Europa, porque es muy doloroso”.

El escenario que prevé el autor del Institutional Risk Analysis es el de una inflación alta, “de dos dígitos”, que se prolongará varios años, cortará de raíz cualquier amago de crecimiento económico y resucitará el proteccionismo: “La era de la globalización y el libre comercio está llegando a su fin. Con la caída del dólar otros países asumirán nuevos beneficios y responsabilidades y darán prioridad a sus mercados nacionales. Tendremos más impuestos y nuevas tarifas a la importación”.

¿Cuánto tardaremos en verlo? No habrá que esperar mucho: “El proceso comenzará este mismo año en EE.UU. con el impuesto nacional a las ventas (IVA) con el que Obama planea reducir el déficit”, dice Whalen. Su recomendación es invertir en activos sin conexión con la economía financiera: “Oro, propiedades inmobiliarias y cobre, cosas reales que no están ligadas al dinero fiat”.

Precisamente, es el dinero fiat, es decir, creado por decreto y sin respaldo de riqueza real, lo que está en la base del desbarajuste que atraviesa la economía internacional. “El sistema está a punto de colapsar porque desde que se desligó el dólar del oro [en 1971] no existe un mecanismo auto-regulatorio de mercado”, afirmó en su intervención Lawrence Parks, director de la Fundación para el Avance de la Educación Monetaria (FAME).

“El dinero fiat no es real, es una ilusión. Se impuso mediante la fuerza, se mantiene mediante el fraude y puede desaparecer en cualquier momento”. Parks apeló al pasado para predecir el futuro: “El valor del dinero fiat siempre ha terminado por caer hacia su coste de producción: cero. Históricamente no existen excepciones al respecto, y las actuales monedas tampoco lo serán”.

¿Qué consecuencias tendrá el fin del dólar?

Parks coincide con Faber en el pronóstico sobre la guerra y añade otro no menos inquietante: “La hiperinflación es inevitable, y para combatir las revueltas sociales que se sucederán el Gobierno preparó hace tiempo la legislación que permite declarar la Ley Marcial”. Parks se refiere a una serie de medidas aprobadas en los años 30, 50 y 70, al parecer todavía en vigor, que permiten al presidente, en caso de emergencia, confiscar cualquier propiedad, intervenir las comunicaciones y transportes y dirigir todos los aspectos públicos y privados de la economía.

Junto a la denuncia del dinero “falso”, en el Mises Circle se atacó la teoría de que la causa de la crisis fue una insuficiente regulación. Kevin Duffy, fundador de Bearing Asset Management, uno de los fondos más exitosos desde su creación en el año 2002, recordó que fueron precisamente las instituciones más reguladas, como los bancos, y no otras áreas con menor regulación como los hedge funds, las que estuvieron en el centro de la crisis.

Marc Faber resumió las conclusiones y el estado de ánimo del Mises Circle de la siguiente forma: “Es un tremendo sofisma económico la idea de que imprimiendo dinero y emitiendo deuda se puede conseguir prosperidad. Si fuese así, el país más rico del mundo sería Zimbabwe”. Y, para deleite de su auditorio, añadió: “Por cierto, un país gobernado por Robert Mugabe, el mentor económico de Ben Bernanke”.

PD1: Este viernes conocimos los datos oficiales del Ministerio de Economía: Como suelen ser las cifras de crecimiento oficialistas, un BRINDIS AL SOL. No aciertan ni una:


PD2: Y ante esa sensación que tenemos muchos de que están trampeando las cuentas públicas a través del sector exterior, los datos son espeluznantes. En época de bonanza se importaba de todo. Pero las exportaciones de bienes se han desplomado y siguen hundidas, sobre todo las no energéticas, por mucho que sea el dinamismo de la economía española. Como colofón, nuestro déficit comercial sigue subiendo. A ver si la depreciación del euro ayuda o ni por esas.

28 mayo 2010

caída de la oferta de dinero M3

En primer lugar y de forma muy simple decir que es la M3: la suma de dinero en circulación más el saldo de los pasivos de entidades financieras que tienen mucha liquidez. No te pierdas que concreto: efectivo en circulación (billetes y monedas) + depósitos bancarios + repos + fondos monetarios + bonos y pagares con vida inferior a dos años. Es decir, la pasta liquida. Dinero y similares.

Pues en EEUU lleva una contracción de un 10% en los primeros 3 meses del año. Pasando la M3 de 14,2 trillones de dólares a 13,9 trillones. Esto quiere decir que en tres meses se han esfumado 300.000 millones de dólares. Un pastizal. Se han esfumado es que se han convertido en operación a largo plazo, en deuda a mayor plazo.

El dinero en teoría es como la energía: ni se crea ni se destruye, sólo se transforma. Si tienes una casa y la vendes, la pasta que te dan la tenía antes otro, no se genera nueva liquidez (salvo en bolsa y bonos que si bajan pierdes. No es un juego de suma cero).

Desde el 2008 pensábamos que se estaban dedicando a incrementar la oferta monetaria de forma salvaje, ese funcionamiento a tope de la máquina de hacer dinero se destinaba a activos a largo plazo, no a dinero líquido que se sigue contrayendo. El credit crunch de entonces se mantiene: no hay crédito para nadie, todo el mundo busca recapitalizarse a largo, pero no hay pasta para el circulante (salvo los ICOs que van a quedarse con toda la mora española).


Hay un doble problema: la M3 u oferta de dinero se ha contraído y la velocidad del dinero se ha reducido también. Pero leamos primero:


US money supply plunges at 1930s pace as Obama eyes fresh stimulus

The M3 money supply in the United States is contracting at an accelerating rate that now matches the average decline seen from 1929 to 1933, despite near zero interest rates and the biggest fiscal blitz in history.

By Ambrose Evans-Pritchard 26 May 2010


The stock of money in the US fell from $14.2 trillion to $13.9 trillion in the three months to April, amounting to an annual rate of contraction of 9.6%

The M3 figures - which include broad range of bank accounts and are tracked by British and European monetarists for warning signals about the direction of the US economy a year or so in advance - began shrinking last summer. The pace has since quickened.

The stock of money fell from $14.2 trillion to $13.9 trillion in the three months to April, amounting to an annual rate of contraction of 9.6%. The assets of insitutional money market funds fell at a 37% rate, the sharpest drop ever.

"It’s frightening," said Professor Tim Congdon from International Monetary Research. "The plunge in M3 has no precedent since the Great Depression. The dominant reason for this is that regulators across the world are pressing banks to raise capital asset ratios and to shrink their risk assets. This is why the US is not recovering properly," he said.

The US authorities have an entirely different explanation for the failure of stimulus measures to gain full traction. They are opting instead for yet further doses of Keynesian spending, despite warnings from the IMF that the gross public debt of the US will reach 97% of GDP next year and 110% by 2015.

Larry Summers, President Barack Obama’s top economic adviser, has asked Congress to "grit its teeth" and approve a fresh fiscal boost of $200bn to keep growth on track. "We are nearly 8m jobs short of normal employment. For millions of Americans the economic emergency grinds on," he said.

David Rosenberg from Gluskin Sheff said the White House appears to have reversed course just weeks after Mr Obama vowed to rein in a budget deficit of $1.5 trillion (9.4% of GDP) this year and set up a commission to target cuts. "You truly cannot make this stuff up. The US governnment is freaked out about the prospect of a double-dip," he said.

The White House request is a tacit admission that the economy is already losing thrust and may stall later this year as stimulus from the original $800bn package starts to fade.

Recent data have been mixed. Durable goods orders jumped 2.9% in April but house prices have been falling for several months and mortgage applications have dropped to a 13-year low. The ECRI leading index of US economic activity has been sliding continuously since its peak in October, suffering the steepest one-week drop ever recorded in mid-May.

Mr Summers acknowledged in a speech this week that the eurozone crisis had shone a spotlight on the dangers of spiralling public debt. He said deficit spending delays the day of reckoning and leaves the US at the mercy of foreign creditors. Ultimately, "failure begets failure" in fiscal policy as the logic of compound interest does its worst.

However, Mr Summers said it would be "pennywise and pound foolish" to skimp just as the kindling wood of recovery starts to catch fire. He said fiscal policy comes into its own at at time when the economy "faces a liquidity trap" and the Fed is constrained by zero interest rates.
Mr Congdon said the Obama policy risks repeating the strategic errors of Japan, which pushed debt to dangerously high levels with one fiscal boost after another during its Lost Decade, instead of resorting to full-blown "Friedmanite" monetary stimulus.

"Fiscal policy does not work. The US has just tried the biggest fiscal experiment in history and it has failed. What matters is the quantity of money and in extremis that can be increased easily by quantititave easing. If the Fed doesn’t act, a double-dip recession is a virtual certainty," he said.
Mr Congdon said the dominant voices in US policy-making - Nobel laureates Paul Krugman and Joe Stiglitz, as well as Mr Summers and Fed chair Ben Bernanke - are all Keynesians of different stripes who "despise traditional monetary theory and have a religious aversion to any mention of the quantity of money". The great opus by Milton Friedman and Anna Schwartz - The Monetary History of the United States - has been left to gather dust.

Mr Bernanke no longer pays attention to the M3 data. The bank stopped publishing the data five years ago, deeming it too erratic to be of much use.

This may have been a serious error since double-digit growth of M3 during the US housing bubble gave clear warnings that the boom was out of control. The sudden slowdown in M3 in early to mid-2008 - just as the Fed talked of raising rates - gave a second warning that the economy was about to go into a nosedive.

Mr Bernanke built his academic reputation on the study of the credit mechanism. This model offers a radically different theory for how the financial system works. While so-called "creditism" has become the new orthodoxy in US central banking, it has not yet been tested over time and may yet prove to be a misadventure.

Paul Ashworth at Capital Economics said the decline in M3 is worrying and points to a growing risk of deflation. "Core inflation is already the lowest since 1966, so we don’t have much margin for error here. Deflation becomes a threat if it goes on long enough to become entrenched," he said.

However, Mr Ashworth warned against a mechanical interpretation of money supply figures. "You could argue that M3 has been going down because people have been taking their money out of accounts to buy stocks, property and other assets," he said.

Events may soon tell us whether this is benign or malign. It is certainly remarkable.

** While the Fed does not publish M3, it still publishes the underlying components. The indicator is reconstructed accurately for clients by Dr John Williams. See it here.

El comportamiento de la M3 en los últimos años (ver línea azul)
Y si cogemos una serie larga, la caída de la M3 es significativa, nunca vista en velocidad e intensidad:

En definitiva: no hay pasta, aunque la bolsa rebote y pueda subir algún días más. Todo el dinero se va a recapitalizar las instituciones financieras y a pagar la deuda pública que se emite. ¿Tendremos primero deflación y sus perniciosas consecuencias?

Los datos de crecimiento de EEUU del 3% del primer trimestre publicados ayer avalan la parálisis de la oferta dinero en circulación M3. No fue mayor, como se esperaba, ya que las cosas siguen complejas. Me temo que el camino de EEUU, que será el nuestro, lo tenemos ya marcado: próxima parada la DEFLACIÓN.

Después vendrá la inflación cuando se pasen de emitir y emitir, pero ahondaremos primero en lo primero y muy dañino: la deflación. Un abrazo

27 mayo 2010

recomendaciones del FMI para España

Te adjunto las reformas para España propuestas por el FMI, que nadie ha traducido y sólo se han reseñado en nota menor en la prensa. Si me sigues leyendo vas a acabar por aprender un montón de inglés. Son muy técnicas algunas, pero es un compendio de lo que se debería hacer para tratar de salir de ésta. Los políticos las han criticado. Y yo te digo que como sigamos como estamos, parcheando con decretos leyes que luego se cambian y que luego se olvidan y que sirven para tirarnos los trastos a la cabeza, pues se deteriorará más nuestra imagen externa y nos acabarán haciendo la peseta y abandonándonos a nuestra suerte. ¡Mala suerte! Lo que jode que te digan de fuera lo que hay que hacer. ¡Cuánta soberbia española!
Spain—2010 Article IV ConsultationConcluding Statement of the Mission

Madrid, May 24, 2010

Spain’s economy needs far-reaching and comprehensive reforms. The challenges are severe: a dysfunctional labor market, the deflating property bubble, a large fiscal deficit, heavy private sector and external indebtedness, anemic productivity growth, weak competitiveness, and a banking sector with pockets of weakness. Ambitious fiscal consolidation is underway, recently reinforced and front-loaded. This needs to be complemented with growth-enhancing structural reforms, building on the progress made on product markets and the housing sector, especially overhauling the labor market. A bold pension reform, along the lines proposed by the government, should be quickly adopted. Consolidation and reform of the banking system needs to be accelerated. Such a comprehensive strategy would be helped by broad political and social support, and time is of the essence.

The outlook: a weak and fragile recovery
1. The necessary adjustment is underway and output has stabilized. Imbalances accumulated during the long boom have begun to unwind, with the current account deficit halving as private savings surged and housing investment fell. Competitiveness has begun to improve as productivity rose and the core inflation differential turned negative. The large fiscal deficit is beginning to fall. Output rose slightly in the first quarter, ending the long and deep recession. But unemployment has soared as firms adjusted employment rather than wages or working hours.

2. We project the nascent recovery to be weak and fragile. Our central scenario is one of continued adjustment of the various imbalances with growth rising gradually to 1½-2 percent in the medium term. Domestic demand recovers only slowly, with private demand weighed down by continued uncertainty, high unemployment, and the need to reduce indebtedness, and public demand by large-scale consolidation. Stronger export growth, however, should support the recovery. Despite rebounding energy prices and the VAT increase, inflation would remain subdued, helping regain competitiveness. Slowing population growth, high unemployment, and weak investment all weigh on potential growth, underlining the importance of growth-enhancing structural reforms.

3. The uncertainty around this outlook is large. On the upside, household consumption could grow more rapidly as confidence firms, and the global recovery and the weaker euro may induce faster export growth. On the downside, the economy may stagnate as the weakness in private demand and fiscal consolidation interact, especially if reforms to boost competitiveness and growth are timid. Financial market conditions may also deteriorate further, raising borrowing costs for both the government and the private sector.

The policy agenda: rebalancing the economy and boosting confidence

4. Policy should focus on fostering the smooth rebalancing of the economy. This calls for urgent and decisive action on:
• making the labor market more flexible to promote employment and its reallocation across sectors;
• fiscal consolidation to put public finances on a sustainable footing; and
• banking sector consolidation and reform to cement the soundness and efficiency of the system.
Such broad reforms in many sectors simultaneously would produce synergies. For example, labor market reform coupled with further liberalization of product and service markets would boost investment and employment and reduce prices, making fiscal consolidation easier and strengthening banks. Such reforms would also support Spain’s long-term convergence with higher-income peers. These reforms should be implemented pro-actively to boost financial market sentiment and underpin credibility.

Structural reforms to spur growth through increased competitiveness and employment

5. The labor market is not working. Unemployment is structurally high and excessively cyclical, reflecting the high degree of duality in labor markets. The wage bargaining system, which hamstrings wage and firms’ flexibility, is ill-suited to membership of a currency union. The government has provided some broad guidelines for reforming the labor market to be negotiated by the social partners. An agreement is expected by the end of May.

6. A radical overhaul of the labor market is urgent. The reform will need to be ambitious and comprehensive if it is to significantly change labor market dynamics and to avoid missing an historic opportunity. In particular:
• reducing duality and encouraging permanent hires requires lowering severance payments to at least EU average levels and preventing excessive use of unfair dismissals;
• boosting wage flexibility and employment requires coupling this reduced protection of permanent contracts with decentralizing wage setting (for example by moving to an “opt-in” rather than “opt-out” system for collective bargaining) and eliminating indexation.
Care should be taken that any reform does not increase the fiscal cost of the system or make temporary employment more difficult in the near term. Ideally the social partners will quickly deliver such an overhaul, but if not, the government will need to follow through on its commitment to take action itself, including on collective bargaining.

7. Commendable progress in recent years on product and service market reform needs to continue. Many important measures have been taken recently, especially in transposing the EU Services Directive (though implementation will be critical), and in the housing sector in which incentives for buying homes have been partially eliminated and the rental sector is being promoted. Given the pressing need to boost growth and competitiveness, however, Spain should aim to be among the top performers in terms of product and service market liberalization. The priority should be to further reduce restrictions on retail trade, professional services, and the rental market.

Fiscal policy: restoring sustainability

8. Ambitious fiscal consolidation is underway to reach the three percent of GDP deficit target by 2013. To achieve the implied 10 percent of GDP improvement in the primary balance from 2009 to 2013, the government has taken a wide range of measures, including the fiscal package approved by the Cabinet last week. We fully support this package. It significantly strengthens and front loads the envisaged adjustment and enhances credibility by taking concrete and bold measures, such as cutting public sector wages. The new path for the deficit is also appropriate. This path implies cutting the deficit by more than five percentage points of GDP in 2010 and 2011 and would put the government debt ratio (which would still be lower than the euro area average) onto a downward path in a reasonable timeframe.

9. Achieving these targets will be critical and any slippage should be aggressively pre-empted. Risks to achieving the targets come from both the implementation of the measures and the underlying projections of a fairly rapid recovery. Any slippage in attaining fiscal targets will make it difficult to put government debt on a firm downward path in a reasonable timeframe and undermine credibility. It is thus critical that the supporting structural reforms are quickly implemented and additional high-quality adjustment measures are prepared in advance to allow pre-emptive correction of any prospective slippages and avoid surprises. Such measures should protect the most vulnerable segments of society and could include further reducing spending (which has increased sharply over the last decade), and raising revenue by reducing tax benefits and further increasing relatively low VAT and excise rates.

10. Bold pension reform should also be implemented soon. Spain faces strong spending pressures over the longer term due to aging and slower population growth. The government has outlined possible reforms, including raising the retirement age to 67. These measures, together with others (in particular, an automatic link to life expectancy) would strengthen the sustainability of the system and bring Spain closer in line with European peers that have already reformed their pension systems. As such reforms would boost fiscal sustainability without undermining growth, they should be quickly adopted.

11. Stronger fiscal frameworks could help. As the bulk of spending occurs in Autonomous Communities, their role is critical, underscoring the need for strong mechanisms to ensure they deliver the needed adjustment. Institutionalizing spending review processes could also help improve the quality and durability of spending reductions. It might also be useful to consider options to bolster the credibility of fiscal policy, for example, by establishing an independent fiscal council (like Sweden’s or Belgium’s) to provide objective analysis of fiscal developments and long-term sustainability issues.

Banks: accelerating consolidation and reform

12. The banking sector is sound but remains under pressure.
Although impaired assets have increased with the downturn, Spanish banks overall report robust capital and provision buffers, supported by a strong supervisory framework. But the risks remain elevated and unevenly distributed across institutions, focused mainly on the savings banks. The situation is also complicated in that much of banks’ repossessed real assets is land, which is particularly difficult to value. On the liquidity side, although funding is generally of good duration, market conditions remains difficult and access limited. Further strains may arise from the unwinding of the exceptional liquidity measures by the ECB, the ending of the funding guarantee scheme, and from the intense competition for deposits. These funding difficulties, coupled with lower earnings due to weak credit growth, provisioning for troubled assets and the system’s overcapacity, will likely lead to pressure on profitability.

13. Consolidation needs to accelerate to reduce overcapacity and produce more robust institutions. Progress, under the aegis of the Fund for Orderly Bank Restructuring (FROB), has been too slow, though the recent agreement between the two main political parties in this regard is encouraging. Much more progress needs to happen before the FROB deadline of end-June 2010. The Bank of Spain should be prepared to intervene promptly if pockets of weakness remain. To this end and to enhance investor confidence, a comprehensive and transparent bank-by-bank “diagnostic” based on conservative assumptions on asset valuation and prospects could usefully be carried out.

14. The legal framework of savings banks should be updated for the new economic context. Performance among savings banks is highly diverse and the sector has an important role to play, but the current legal structure is not well suited to Spain’s needs going forward. Under the current framework, cross-region mergers still need to be approved by regional governments, the sector remains closed to external investors, and savings banks’ capacity to raise external capital remains limited, putting public funds are at risk. The legislative and policy priority should be to: (1) reduce political influence in savings banks; (2) enhance their ability to raise external capital, and (3) offer an opportunity to transform into stock-holding companies, and, indeed, requiring this for systemically important savings banks. This reform should be implemented promptly so savings banks can have the full range of options to raise capital as soon as possible.

PD1: ¿Dónde está la mora bancaria? ¿Pueden las entidades financieras aguantar mucho esta situación? Y si se deteriora, ¿qué va a pasar?

Por poner un ejemplo de banco ejemplar, tomemos al más grande, al Banco de Santander. El BBVA o las cajas son similares o peores las últimas. Sacados los datos de la memoria del año pasado, la situación de la mora es la siguiente:

Es entendible que si la Deuda Soberana (bonos del Tesoro) se deteriorase más, hemos pasado de tener un spread de 40 pb con el Bund alemán a alcanzar los 150 pb actuales, implicando una necesidad de dotar más provisiones por esta partida en este ejercicio, las pérdidas esperadas serían mayores. El riesgo de que alcanzáramos los niveles griegos de diferencial frente al bund haría que la necesidad de provisionar se empezara a comer los fondos propios computables e hiciera necesaria una recapitalización de los bancos vía ampliaciones de capital. No sé si el mercado estaría dispuesto a meter mucho más dinero en el sector financiero del que muchos tratan de escapar ante el temor a un deterioro adicional futuro.

Pero la enjundia del problema no está sólo en el riesgo de bonos que puedan tener, sino en la evolución de los números fallidos en créditos al consumo, tarjetas de crédito, PYMES e hipotecarios. Si nos enfrascamos en una contracción económica mayor, más duradera en el tiempo, la situación se iba a complicar, tanto en materia de una necesidad de seguir provisionando la mora, como de nuevas pérdidas provocadas por el mercado de deuda pública y bonos corporativos, algo que en el año 2009 no ocurrió.

No hace falta mencionar las consecuencias de un default de Grecia, con su correspondiente quita del 50%, del 70%???. Ni quiero mencionar las consecuencias de una quiebra de Portugal, ya que el sistema bancario español tiene el 50% de su deuda pública. Y ruego a Dios que no ocurra el default en España y que nos ayude alguien antes. Sería calamitoso, para los bancos españoles y para el conjunto de la banca europea. ¿Bancarrotas? Haz tú los números, pero si las quitas son del 50%, esto se comería todos los recursos propios de muchas entidades. Quedarían a expensas de una recapitalización del Estado, del español para las entidades españolas, del alemán para los bancos alemanes y del francés para las gabachas. No podríamos esperar mucho del BCE que no le queda ni un euro, salvo mayor emisión hasta el infinito y mucho más.

Por tanto es de esto de lo que se habla cuando la gente dice que está en peligro el sector financiero europeo, como ocurriera con el americano hace dos años con las subprime. Si entráramos en una espiral de deuda pública, de no querer tener bonos por ventas masivas de los emisores, por expectativas de subida de rentabilidades, subida de rendimientos que implica bajada de precio, por problemas de quitas en la deuda de los países periféricos en caso de su default y su consiguiente reestructuración de su deuda, entonces los bancos europeos lo iban a tener crudo. Lo iban a pasar mal, muy mal. Y poco dinero le quedaría a los gobiernos para poder echarles un cable, como se hizo con la banca americana.

Estamos en momentos muy difíciles; entenderás por qué lo que más sufren son las acciones de las entidades financieras.

PD2: Crisis bancaria mundial:

El sistema bancario mundial es insolvente, según el analista Chapman

Invertia. El sistema bancario mundial es insolvente y el euro ha sido un fracaso, como se predijo que sería hace 12 años. Así se contundente es el analista financiero Bob Chapman, que asegura que si los bancos centrales de la Eurozona no hubieran comprado bonos basura de los países del Club Med, antes de que se aprobara el plan de ayuda al euro, entidades como BNP Paribas, Unicredit, BBVA, Société Générale y Santander se hubieran derrumbado.

Así, Chapman está convencido de que el billón de dólares asignado para rescatar al euro, y que procede de los contribuyentes, en realidad se dirige a salvar a estos bancos oligárquicos. Porque afirma que “el sistema bancario mundial es insolvente y los bancos mantienen dos “juegos de libros”, el mark-to-model y otro con una gran cantidad de activos inmobiliarios residenciales y comerciales que mantienen fuera del mercado”.

El modelo mark-to-model se utiliza para valorar activos mediante hipótesis y asunciones internas de modelos financieros. Dicho modelo contrasta con el mark-to-market, el cual valora los activos con los precios del mercado. Los activos que se valoran por el primer método o bien no tienen un mercado regular que proporcione información precisa sobre precios o bien las valoraciones se basan en un complejo conjunto de variables de referencia y plazos.

“Los préstamos se han reducido un 20% y también a las empresas AAA. La Fed acaba de tomar 1,7 billones de dólares en CDO tóxicos y esto sólo supondrá un pequeño ajuste en el valor de los activos de la Fed que muestren un balance negativo”, dice Chapman.

Por ello se pregunta qué estaban pensando el FASB (Financial Accounting Standards Board) y el BPI (Banco de Pagos de Basilea) cuando permitieron la valoración mark-to-model en contraposición al modelo mark-to-market o a precios de mercado. “Todos los ingresos y las condiciones financieras de cientos de miles de empresas son completamente falsos”.

Todo esto se ve aumentado, según Chapman, por las medidas de flexibilización cuantitativa y por echar más dinero al problema, lo que no ha resuelto nada. “Si no se implementa un nuevo programa de estímulos y la Fed no añade más liquidez, el sistema colapsará. “Las quiebras bancarias han subido a 72. Parece que a finales de 2010 vamos a ver más de 200 bancos o tal vez 300”, comenta este analista.

El EURO, UN FRACASO

“El paquete de un billón de dólares iniciales para salvar el euro hasta el momento ha sido un fracaso, ya que la moneda única continúa su descenso”.

En opinión de Chapman, no es cierto que el BCE no haya cambiado su política monetaria, según declara su presidente Jean Claude Trichet, como tampoco es verdad cuando dice que el dinero será devuelto a los prestamistas, es decir, a los contribuyentes.

“Lo que Trichet no está diciendo es que la Fed en secreto ha estado alimentando la liquidez dentro del BCE para año y medio o dos años, porque lo de contrario hubiera sido insolvente desde hace mucho tiempo”, aclara. Asimismo, comenta que a medida que la Fed alimenta al BCE a través de waps y otros métodos más sutiles, el banco central europeo está cebando el fondo de los bancos para que estos no colapsen.

Al mismo tiempo, los bancos compran bonos gubernamentales en otra forma de flexibilización cuantitativa. “Este juego no engaña a la media de los europeos que durante el último mes han apostado por el oro y la plata. El euro es historia. Sólo es cuestión de cuándo. La batalla ahora se libra entre el dólar y el oro, una batalla que el dólar no puede aspirar a ganar”, concluye Chapman.

PD3: Australia lo tenemos dentro de los fondos de PACIFIC EX JAPANBuy Australia, sell Canada

Recently
Bill Hester of Hussman Funds did some analysis of average country valuation based on a composite of cyclically adjusted P/E ratios and dividend yields and concluded that US equities remains overvalued compared to its own historical average.

26 mayo 2010

el riesgo es España

Ayer se podía leer en el confidencial:

La exposición de inversores extranjeros a la deuda griega, portuguesa y española, tanto pública como privada alcanza los 2 billones de euros. Si en septiembre de 2008 cuando quebró Lehman Brothers, tenía activos por 1,2 billones de dólares y el sistema financiero se fue a pique, ¿qué pasaría ahora si alguno de estos países siguiera sus pasos? La crisis de la deuda europea y, en especial, España, se ha convertido en un problema para el mundo entero.

Así, el rescate de Grecia en realidad ha sido el salvavidas para los bancos alemanes y franceses principales tenedores de bonos del país y la llamada del presidente de Estados Unidos, Barack Obama, a José Luis Rodríguez Zapatero para decirle lo que tenía que hacer respondía a una mera cuestión de supervivencia del resto de países.

Y es que, la exposición de los inversores extranjeros a los bancos españoles alcanza los 770.000 millones de euros, frente a los 111.000 millones que suponen los griegos y los 184.000 millones de los portugueses, según los datos ofrecidos por Royal Bank of Scotland. Si a estas cifras unimos a los tenedores de bonos del estado de estos países y de deuda de entidades no financieras, en el caso de España, la exposición roza los 1.5 billones de euros –un 142% del PIB-, bastante más que Lehman Brothers, mientras que Grecia y Portugal superan los 330.000 millones de euros.

Dicho esto, hay que sumar que “el eslabón débil es la exposición del sector bancario a la deuda corporativa incluido el sector inmobiliario”, que el Banco de España estima en 445.000 millones de euros, el 42% del PIB español.

Esto hace que España sea más vulnerable a una pérdida de la confianza por parte de los inversores internacionales como se está reflejando en el comportamiento de los mercados, tanto de renta variable como de bonos.

Por otro lado, al igual que ocurre con Grecia, son precisamente Francia y Alemania los menos interesados en que España naufrague. Sólo entre estos dos países acumulan más de 300.000 millones de euros entre deuda pública y privada, mientras que Estados Unidos cuenta con 40.000 millones y Reino Unido 75.000 millones de euros.

Visto lo visto, no es de extrañar que desde varios frentes se justifique la intervención del Banco Central Europeo con su programa de compra de deuda y desde RBS aseguran que la institución monetaria acabará comprando más papel privado que soberano.

Estamos en sus manos. Una quiebra de España les iba a afectar a sus bolsillos también, a la de sus bancos y de sus cuentas públicas. Veremos que pasa. Un abrazo

PD1: Lo que el mercado descuenta es que no salimos de la crisis y que podemos profundizar en la misma. La raíz del problema es el inmenso ESTADO DEL BIENESTAR que hemos pergeñado los europeos. Insostenible e incuestionable. Ya le llegará la hora, tarde, como siempre . Con el envejecimiento de la población occidental, es cuestión de tiempo la inviabilidad de nuestro modelo de jubilación:

Crisis Imperils Liberal Benefits Long Expected by Europeans
NYT By STEVEN ERLANGER

PARIS — Across Western Europe, the “lifestyle superpower,” the assumptions and gains of a lifetime are suddenly in doubt. The deficit crisis that threatens the euro has also undermined the sustainability of the European standard of social welfare, built by left-leaning governments since the end of World War II


Europeans have boasted about their social model, with its generous vacations and early retirements, its national health care systems and extensive welfare benefits, contrasting it with the comparative harshness of American capitalism.

Europeans have benefited from low military spending, protected by NATO and the American nuclear umbrella. They have also translated higher taxes into a cradle-to-grave safety net. “The Europe that protects” is a slogan of the European Union.

But all over Europe governments with big budgets, falling tax revenues and aging populations are experiencing rising deficits, with more bad news ahead.

With low growth, low birthrates and longer life expectancies, Europe can no longer afford its comfortable lifestyle, at least not without a period of austerity and significant changes. The countries are trying to reassure investors by cutting salaries, raising legal retirement ages, increasing work hours and reducing health benefits and pensions.

“We’re now in rescue mode,” said Carl Bildt, Sweden’s foreign minister. “But we need to transition to the reform mode very soon. The ‘reform deficit’ is the real problem,” he said, pointing to the need for structural change.

The reaction so far to government efforts to cut spending has been pessimism and anger, with an understanding that the current system is unsustainable.

In Athens, Aris Iordanidis, 25, an economics graduate working in a bookstore, resents paying high taxes to finance Greece’s bloated state sector and its employees. “They sit there for years drinking coffee and chatting on the telephone and then retire at 50 with nice fat pensions,” he said. “As for us, the way things are going we’ll have to work until we’re 70.”

In Rome, Aldo Cimaglia is 52 and teaches photography, and he is deeply pessimistic about his pension. “It’s going to go belly-up because no one will be around to fill the pension coffers,” he said. “It’s not just me; this country has no future.”

Changes have now become urgent. Europe’s population is aging quickly as birthrates decline. Unemployment has risen as traditional industries have shifted to Asia. And the region lacks competitiveness in world markets.

According to the European Commission, by 2050 the percentage of Europeans older than 65 will nearly double. In the 1950s there were seven workers for every retiree in advanced economies. By 2050, the ratio in the European Union will drop to 1.3 to 1.

“The easy days are over for countries like Greece, Portugal and Spain, but for us, too,” said Laurent Cohen-Tanugi, a French lawyer who did a study of Europe in the global economy for the French government. “A lot of Europeans would not like the issue cast in these terms, but that is the storm we’re facing. We can no longer afford the old social model, and there is a real need for structural reform.”

In Paris, Malka Braniste, 88, lives on the pension of her deceased husband. “I’m worried for the next generations,” she said at lunch with her daughter-in-law, Dominique Alcan, 49. “People who don’t put money aside won’t get anything.”

Ms. Alcan expects to have to work longer as a traveling saleswoman. “But I’m afraid I’ll never reach the same level of comfort,” she said. “I won’t be able to do my job at 63; being a saleswoman requires a lot of energy.”

Gustave Brun d’Arre, 18, is still in high school. “The only thing we’re told is that we will have to pay for the others,” he said, sipping a beer at a cafe. The waiter interrupted, discussing plans to alter the French pension system. “It will be a mess,” the waiter said. “We’ll have to work harder and longer in our jobs.”

Figures show the severity of the problem. Gross public social expenditures in the European Union increased from 16 percent of gross domestic product in 1980 to 21 percent in 2005, compared with 15.9 percent in the United States. In France, the figure now is 31 percent, the highest in Europe, with state pensions making up more than 44 percent of the total and health care, 30 percent.

The challenge is particularly daunting in France, which has done less to reduce the state’s obligations than some of its neighbors. In Sweden and Switzerland, 7 of 10 people work past 50. In France, only half do. The legal retirement age in France is 60, while Germany recently raised it to 67 for those born after 1963.

With the retirement of the baby boomers, the number of pensioners will rise 47 percent in France between now and 2050, while the number under 60 will remain stagnant. The French call it “du baby boom au papy boom,” and the costs, if unchanged, are unsustainable. The French state pension system today is running a deficit of 11 billion euros, or about $13.8 billion; by 2050, it will be 103 billion euros, or $129.5 billion, about 2.6 percent of projected economic output.
President Nicolas Sarkozy has vowed to pass major pension reform this year. There have been two contentious overhauls, in 2003 and 2008; the government, afraid to lower pensions, wants to increase taxes on high salaries and increase the years of work.

But the unions are unhappy, and the Socialist Party opposes raising the retirement age. Polls show that while most French see a pension overhaul as necessary, up to 60 percent say working past 60 is not the answer.

Jean-François Copé, the parliamentary leader for Mr. Sarkozy’s center-right party, says that change is painful, but necessary. “The point is to preserve our model and keep it,” he said. “We need to get rid of bad habits. The Germans did it, and we can do the same.”

More broadly, many across Europe say the Continent will have to adapt to fiscal and demographic change, because social peace depends on it. “Europe won’t work without that,” said Joschka Fischer, the former German foreign minister, referring to the state’s protective role. “In Europe we have nationalism and racism in a politicized manner, and those parties would have exploited grievances if not for our welfare state,” he said. “It’s a matter of national security, of our democracy.”

France will ultimately have to follow Sweden and Germany in raising the pension age, he argues. “This will have to be harmonized, Europeanized, or it won’t work — you can’t have a pension at 67 here and 55 in Greece,” Mr. Fischer said.

The problems are even more acute in the “new democracies” of the euro zone — Greece, Portugal and Spain — that embraced European democratic ideals and that Europe embraced for political reasons in the postwar era, perhaps before their economies were ready. They have built lavish state systems on the back of the euro, but now must change.

Under threat of default, Greece has frozen pensions for three years and drafted a bill to raise the legal retirement age to 65. Greece froze public-sector pay and trimmed benefits for state employees, including a bonus two months of salary. Portugal has cut 5 percent from the salaries of senior public employees and politicians and increased taxes, while canceling big projects; Spain is cutting civil service salaries by 5 percent and freezing pay in 2011 while also chopping public projects.

But all three need to do more to bolster their competitiveness and growth, mostly by changing deeply inflexible employment rules, which can make it prohibitively expensive to hire or fire staff members, keeping unemployment high.

Jean-Claude Meunier is 68, a retired French Navy official and headhunter, who plays bridge to “train my memory and avoid Alzheimer’s.” His main worry is pension. “For years, our political leaders acted with very little courage,” he said. “Pensions represent the failure of the leaders and the failure of the system.”

In Athens, Mr. Iordanidis, the graduate who makes 800 euros a month in a bookstore, said he saw one possible upside. “It could be a chance to overhaul the whole rancid system,” he said, “and create a state that actually works.”

PD2: Hoy rebotaremos al calor de Wall Street. No importa el caos que provocan nuestros gobernantes: ni piensa dimitir por muchos golpes en la mesa que demos todos. Está encantado de haberse conocido, aunque nos hunda en la miseria. No importa que los ayuntamientos estén quebrados y no tengan ni para pagar sueldos (de aquí vendrá el paro en los próximos años, de empleados públicos (no los funcionarios de carrera) que tendrán que despedir por falta de recursos económicos en los ayuntamientos). No importa que tengamos a las cajas en estado calamitoso, con intervenciones de unas para que no quiebren, ¿habrá más iguales?. No importa que estén las empresas promotoras e inmobiliarias axfisiadas con sus deudas de suelos y promociones no vendibles.
No importa que España esté cuestionada en el mundo entero. No importa que podamos irnos a la quiebra, entrar en default, ya que no habrá dinero para salvarnos como a Grecia. No importa nada. A los políticos no les importamos nada. Que se vayan a paseo y vengan otros por favor. Por cierto, que porras hace este gran hombre que es Pio Garcia Escudero en una cámara sin contenido. ¿Por qué no es el recambio natural de Rajoy? Tiene un pico de oro y se le ve un hombre sensato y capaz. Si tiene una historia limpia, es el hombre nuevo que necesitamos para salir de ésta.

25 mayo 2010

cortafuegos

Felix Salmon nos dice desde Reuters sobre los “cortafuegos” para evitar que se extienda el problema en el mundo financiero:

I’m skeptical that “a defensible and sustainable fire break” exists even in theory, let alone that it can be implemented in practice. Fire breaks work by isolating problem areas and preventing them from infecting the broader neighborhood. But the global financial system is far too complex and interconnected for any problem area to be isolated: as Rick Bookstaber has shown, correlations can and will appear from nowhere the minute a crisis erupts.

A fire break would, realistically, take one of two forms. Either it would be a bit like a real-world fire break, where you let Greece go down in flames but put lots of resources towards stopping the flames from spreading. I suppose the example here is Lehman Brothers: its collapse was so disastrous that it rapidly became obvious that the government would let no other large financial institution fail in Lehman’s wake. But that was hardly the message that Hank Paulson and the rest of the government wanted to send; they had hoped that letting Lehman fail would be the death of moral hazard and too-big-to-fail, rather than its rebirth. Certainly it’s hard to envisage a scenario where Greece’s collapse reduces the perception of the degree of risk in the rest of Europe.

So then there’s the other kind of fire break, where you burn down a bunch of Greek debt, causing short-term pain for Greece’s creditors, in order to make the sovereign finances more sustainable over the long term. The technical word for that is “default” — which is a lot more drastic than one might normally consider “appropriate circuit breakers” to be. And it, too, is prone to spreading uncontrollably.

This is why Europe is defending the indefensible: because failure to do so means a very high chance of chaos. Maybe once markets have sold off further, that kind of chaos might be more priced in. But for the time being, the indefensible is being defended just because the markets still seem to have faith in it and governments are hopeful they’ll be able to avoid a replay of the period between September 2008 and March 2009. The problem, of course, is that they don’t have a real plan for achieving that.

Estamos tiesos: En toda la Unión Europea tienen cada banco central un total de 498.635 mill de euros. El Banco Central Europeo BCE tiene 51.700 mill euros. Y el Banco de España tiene 20.918 millones de euros. Si quitamos el oro (ver la última línea) nos quedamos más tiesos todavía. Teniendo en cuenta como nos las gastamos recientemente en los grandes números, en los dispendios y ayudas al prójimo (Grecia, España, CajaSur…) Pues no tenemos ni para pipas, menos para apagar fuegos financieros o salvar países o entidades financieras.

Reservas de los bancos centrales europeos:

Sin embargo, el banco central Chino sigue exhibiendo su posición conservadora y prudente y atesora un volumen de 2.600.000 millones de dólares de reservas, suficientes para embites peligrosos. A ver cómo pasamos los europeos el verano que se espera caluroso y no tenemos ni para comprar abanicos, por supuesto “made in China”. Un abrazo

PD1: Cuidado con el mercado monetario si nos viene una crisis de deuda pública y tenemos problemas con los emisores, o se vuelve a estrangular y secar el mercado. Ya hemos vivido una situación similar cuando en verano de 2007 saltaron las alarmas y se produjo la aversión a los bonos subprime. Nadie los tenía salvo los bancos americanos. Pero no, empezaron a aparecer fondos monetarios europeos que estaban cargados y que tuvieron que valorar estos activos a precio de mercado. No había cotización de estos bonos en el mercado, lo que originó graves pérdidas.

Te acordarás lo que le pasó a nuestro fondo monetario del que tuvimos que huir, a pesar de que años atrás era lo más seguro y rentable. Llegó a perder más de un 8%. Mira el gráfico de los últimos 10 años. Empezó a bajar en agosto del 2007 y todavía no se ha recuperado, amén del lucro o rentabilidad cesante. Y era ¡¡¡un fondo monetario!!!, lo mejor del momento.

Si nos vuelve a pasar por una aversión a la deuda pública, algo que puede ya haber empezado, no esperes nada bueno de los bonos ni de los activos monetarios. Todo se tiene que valorar a mercado. Y esto le va a originar graves pérdidas a las entidades financieras y a los fondos sin riesgo. Cambian los paradigmas. Lo que menos riesgo tenían puede ser los más arriesgados ahora. Cuidado con los activos monetarios, pueden bajar de precio, aunque no estemos acostumbrado a esto.

PD2: Ayer hice una romería a la Virgen. Estamos en el mes de Mayo y ya tocaba. A nuestra madre pocos son los mimos que le dedicamos. Estuvimos en la Ermita de Valverde a las afueras de Madrid y luego fuimos a tomarnos una caña. En ese recitar de avemarías, pedí mucho para que se solucione esta situación pronto. Así lo deseo de corazón. Muchas avemarías y padrenuestros, por España, todo por España, arrodillándonos ante la Virgen para que nos ayude.

Lo único que nos queda es rezar y esperar.

24 mayo 2010

¿tenemos inflación o deflación?

Primero tendremos deflación, luego ya veremos.

La inflación no repunta, a pesar de las medidas realizadas en los dos últimos años de incremento de la oferta monetaria.


Y todo esto teniendo en cuenta que el “deleverage”, el desapalancamiento de las fuertes deudas acumuladas se tienen que reducir:


Las deudas acumuladas son de órdago y no se salva ningún país occidental. En el caso estadounidense, son de miedo, brutales la evolución de las empresas financieras y de hogares. Estos han sido, en términos generales, los dos culpables de que nos encontremos con esta crisis: los BANCOS y los PARTICULARES. Los gobiernos se la han pegado recientemente, pero nada que ver con donde hemos llegado los particulares y los bancos. Parte de culpa tienen: tenían que haber prohibido y regulado a los bancos esa facilidad de concesión de créditos.

De esto es de lo que se trata: de saber si cae o no el sistema bancario por culpa de su apalancamiento (para crecer y financiar su expansión mundial, así como realizar fusiones y adquisiciones) y del apalancamiento de los hogares (hipotecas y prestamos al consumo). Los efectos sobre la oferta monetaria son palpables. Ésta no ha hecho más que crecer, pasando de 7 trillones de dólares en 2007 hasta los 9,5 trillones actuales. Mucho dinero nuevo inventado que hace que se pierda la garantía y el respaldo del mismo. Parte de culpa la tiene tanto la FED como el BCE que multiplican sus balances so pretexto de que no caiga los bancos, so pretexto de salvar el sistema bancario de una bancarrota. ¿No habría sido mejor que se purgara el mismo?

Deflation Risk is the Bigger Issue

by Rom Badilla, CFA – Bondsquawk.com May 17, 2010

Many economists and analysts are predicting for higher rates due to increasing inflation expectations along with concerns of massive debt supply. According to Bloomberg’s economic forecasts page, surveys suggest that the Federal Funds rate will increase by 25 basis points starting the fourth quarter of 2010. Furthermore, the yield on the 10-Year will have a four handle by the time we ring in 2011.

JP Morgan’s Client Treasury survey released this morning suggests that 92 percent of total institutional clients are either sitting on the fence and are neutral relative to their benchmarks (74 percent) or short (18 percent), which implies they are expecting higher rates. Keep in mind that not all fixed income portfolio managers make interest rate calls and are willing to pick a side. So no matter how extreme interest rates may be, expect a good portion to always be neutral. However, the survey also looks at clients who are considered “active”. Among those active clients, no one is long their benchmarks despite a seismic shift both in interest rates and sentiment with a debt crisis that threatens a global recovery.

I should add that if you look at JP Morgan’s survey data over the last three years, you will find that the predictive power of future interest rates is poor at best. If you were to follow the herd in trying to determine where interest rates are going, you are better served by sitting on the couch, conserving energy and throwing darts at board. (I’ll show my findings another time)

In any event, I still don’t get it. Investors should be concerned about deflation and lower rates, and not inflation.

The Core Consumer Price Index (CPI) which is an inflation measure and excludes prices on food and energy, is dangerously low. While it is still in positive territory, Core CPI could decline even further regardless of the economy experiencing a recovery or not. Core CPI has collapsed after almost every recession dating back to 1958. Of the eight past recessions (not including this most recent one), Core CPI has declined in seven of them. The one time it did not drop was during the recession in the early 60’s where the inflation index moved from 0.7 percent in February 1961 to a peak of 1.6 percent in March 1962. Suffice to say, core inflation grinded its way back to 1.0 percent by May 1963.

Inflation Declines After Recessions (Data Provided by Bloomberg)

In order to have inflation and to drive prices higher, resources need to be relatively scarce in the face of rising demand. Capacity Utilization, which measures the actual output produced as a percentage of potential output given current resources, continues to hover in the low 70’s, citing idle and slack resources in the manufacturing sector. Typically, during periods of growth, the Capacity Utilization percentage should exceed 80 percent.

Along those same lines, unemployment is still high with an uptick to 9.9 percent and to 17.1 percent in the national rate and the U-6 measure, which includes discouraged workers, respectively. With the slack in employment, wage growth, which would translate to higher demand for goods and service, will be subdued for quite some time.

From the onset of this recession, the U.S. economy lost 8.3 million jobs as non-farm payrolls posted negative numbers in 23 of the 24 months for the period ending December 2009. There is reason for optimism though as non-farm payrolls has posted positive gains in 2010 totaling 573,000 jobs added. Unfortunately, we have a long way to go before getting back to employment levels from before the recession. Assuming this rate of job growth remains stable of adding 143,000 per month (573,000 divided by 4 months), it will take roughly five years and get us to the middle part of the next decade to recover from the 8.3 million jobs lost.

Depressed asset prices certainly are not helping the case for higher inflation. Housing prices are still low and will continue to remain low with some people predicting a double dip. Housing price pressures will persist as “strategic foreclosures” become in vogue, where people who are able to pay their mortgage walk away as the value of their homes are marked below the outstanding loan amount. Furthermore, the bigger issue going forward is the large amount of commercial real estate loans that will be coming due in the next four years. These loans, which many of them are underwater due to the massive decline in prices, will need to be rerolled into new debt. Failure to do so, will result in more defaults which will place even greater pressure on prices and loan growth, which is an ingredient to inflation.

Then, there is the argument of higher future taxes due to reining in federal spending and higher debt loads. Higher taxes, which seem certain here in the US, can cripple spending which in turn, leads to slower economic growth. As we all know from what we may see in Europe, the prospects of slower growth could lead to downward pressure on prices.

I am sure people will point out that surging debt levels will ultimately lead to inflation and higher yields. A case in point could be a country like Greece with high debt levels relative to the rest of Europe. While valid, the issue with Greece is not so much of question of debt load but more so an issue of structural issues with the EU and Greece’s inability to devalue and finding lenders willing to finance them.

Japan is probably a better comparison due to the fact that they suffered through a meltdown but has continued support in the capital markets. The country of the rising sun currently has a public debt to GDP ratio of 190 percent surpassing the United States and Greece. Since the beginning of this decade, Japan has increased its debt burden from 103 percent to its current levels. During that time the yield on 10-Year Japanese Government Bonds started at 1.66 percent and has stayed range bound with an average of around 1.46 percent. Currently, the yield is even lower at 1.30 percent.

While the Japanese situation of financing debt with more debt is of great concern and for the most part unsustainable in the long term, higher debt doesn’t necessarily lead to inflation and higher yields in the short term. With Japan, deflation in the aftermath of an asset bubble meltdown followed by slow growth and productivity, is a lingering problem that has plagued their economy for quite some time. Going forward, that trend may continue even further.

Given where the US stands now coupled with the debt crisis in Europe that could lead to another credit crunch, deflation is a bigger risk that most people are not even considering.

PD1: De nuevo lanzamos al mercado el mensaje de que salvamos el sistema, que todo lo pueden soportar las anchas espaldas del estado público. Se salvó a CCM. Ahora a CajaSur. ¿Qué pasará cuando tengamos que salvar a uno más grande? ¿Podremos? Estos precedentes son perniciosos. Se salva tarde. Tenían que haber intervenido hace muchos meses. No se está cumpliendo las labores de disciplina y supervisión del BE. Qué miedo tienen a que cunda el pánico entre los ahorradores. Qué nocturnidad y prisas se tiene ahora. Qué mal momento para que empiecen a ser intervenidas las cajas, cuando posiblemente lo que tenían que haber hecho es dejarla quebrar. Le damos 550 millones de euros del FROB para sanearla, pero ¿está quebrada o seguimos sin saberlo?

Si un inversor se equivoca y tiene pérdidas las asume. Si inviertes en BBVA y te baja la cotización, te aguantas. Pero si los gestores bancarios se equivocan y tienen pérdidas en sus prestamos a promotores o a hipotecas fallidas, las sufragamos entre todos, nosotros y la siguiente generación que les estamos dejando un país destrozado.

¿Qué pasará si empieza una espiral de deuda y se juntan las pérdidas por mora con las de la deuda pública? Se las pasamos a la siguiente generación y salvamos a todos los bancos y cajas de sus errores? Qué triste pensar que nos quitamos el problema ahora, por no tener narices de coger el toro por los cuernos, y se lo endosamos a nuestros hijos. Como ahora no se tienen hijos, ¿no será que poco les importan las siguientes generaciones? Esto es un horror: error sobre error.

20 mayo 2010

fuera de control

Hoy me alegro de que no sea yo el que lo diga. Lo dicen todas las entidades que quieras oír. Esto está de asco. No hay plan “B”. Y el mercado no le ha gustado el paquete del ECOFIN (léete a Morgan Stanley abajo). España está peor que Grecia (lo dice Reuters más abajo) Se esperan otras soluciones más que ponerse a regular a estas alturas, un pelín tarde (ver ministro de finanzas alemán al final del email). Trataré de cerrar la boca y enfocaros la mañana con más optimismo, pero no se me cierra.

Están tratando de hacer reformas estructurales (regulación mercados financieros, regular el mercado de trabajo, cambiar el modelo de crecimiento…) que llegan tarde. El problema ahora es cómo salir de ésta mañana, no cómo mejoramos o permitimos o no el despido libre para dentro de unos años. Lo más urgente es lo inmediato. Y para esto no se sabe qué remedio poner para que sobreviva el sistema.


Political and Legal Aspects of the EU/IMF Rescue Package
May 18, 2010 By Elga Bartsch & Carlos Egea Morgan Stanley London

Last week we held a discussion with Professor Henrik Enderlein and clients to discuss political and legal implications of recent EU/IMF assistance packages: Given the interest of the subject matter, we thought it would be worthwhile to summarise the key conclusions of the discussion for future reference.

The package is clearly of historic importance, and forces those in the investor community who remain unconvinced to assume, by extension, that the liquidity stresses seen in peripheral economies outside of Greece can trigger a chain reaction that would derail half a century of European economic integration.

Markets are focused on timely implementation for now: The mechanism needs to be approved and delivered without delay. Investors worry about signs of severe political stress among euro area members as it has a strong bearing on their weighting of tail macro risks.

Clarity of communication and of thought from policymakers and a credible path to fiscal sustainability are key for the longer term: We remain in an investing environment, driven by factors way outside the comfort zone of investors. The return of confidence in markets and the reduction in risk premia depends to a critical extent on policymakers laying down a clear and credible path to both mutual assistance and fiscal sustainability.

We therefore expect investors to continue hedging against tail risks (which are now of historic proportions) and elevated volatility: The controlled, but continuous, widening of a variety of credit and money market spreads is a product of investors' need to hedge against severe tail risks until the stabilisation package is delivered and weaker countries regain credibility with investors.

Summary and Conclusions
"Biggest ‘all in' poker hand in history" according to Professor Enderlein, and we agree. European Monetary Union was anchored on two institutions, an independent ECB and a Stability and Growth Pact (SGP) that was supposed to limit government indebtedness and thus the risk of sovereign bailouts among member states. With the SGP having failed, monetary union now rests principally on ECB credibility. After May 10, Monetary Union will also rest on the conditionality elements of the stabilisation mechanism correcting the fiscal sustainability paths of euro area member countries.

Towards a fiscal union? If, as expected, the poker hand is won, the result may actually be a much tighter fiscal framework and more integrated economic governance in the euro area. The mutualisation of sovereign risk in the euro area would also imply steep penalties for any country losing the umbrella of the regional debt guarantee. Further proposals on economic governance in the euro area coming from Berlin this weekend would represent, in the near future, an acceleration in eurozone integration that would reverse a trend of the years following the introduction of the euro where European institutions were weakened not strengthened. Professor Enderlein does not expect a reform of the EU treaties to achieve this, or not, in the short run - rather, fiscal reform would be operated through the SGP-specific protocols which can be amended by unanimous decision of the member states.

But there is no plan B: If the package were to fail, deterioration in financial and economic fundamentals is expected to be immediate. Europe would also enter into a prolonged and very difficult period of elevated political and economic uncertainty, which would structurally impact risk premia across financial assets.

Without Germany on board, there is no bailout package: A smaller country not taking its commitments to the finish line will not kill the bailout, but Germany is irreplaceable both financially and politically. Hence, the political discrepancies between Germany and other large European countries need to converge. The road towards policy convergence remains a source of delays, contradictory statements by politicians and generally negative headlines. Investors should note, however, that some of this noise forms part of the normal practices of EU policymaking. But that tension, at the same time, also forms the basis that triggers a much more serious political crisis in Europe that would have very negative repercussion for financial markets. Understanding German concerns and policymaking processes is thus relevant for investors. Chancellor Merkel lost an important regional election two weeks ago and control of the upper chamber of parliament. However, the opposition Social Democrats are expected to vote in favour of financial assistance to the weaker members of the eurozone, both because of political conviction and because the failure of the package is an even worse alternative. In exchange, however, the Social Democrats will likely demand a more interventionist regulation of the financial services industry.

Things to get done in the coming weeks: EU governments and the IMF are still negotiating the fine print of the package that was agreed at the political level on May 10. A lot of work remains to be done on the SPV that will fund governments. Its creation will require an international treaty and the architecture of the stabilisation package is new to the functioning of European Union institutions. The interaction between the IMF, the EU and member states also needs to be fully laid out. This package will then need to be approved in each country according to national law, often via a parliamentary vote. We hope that the German parliament will be in a position to vote on the package on May 21.

The German constitutional court risk: Professor Enderlein expects the law enabling Germany to contribute to the funding mechanism to be immediately challenged in its constitutional court. This court has ruled in the past for a very conservative reading of the EU treaty's no bailout clause (Art.125) that forbids members of the EU from providing financial assistance to other member states facing fiscal sustainability problems. The court, however, also ruled that Art.125 could be bypassed under circumstances of risk for the Union itself rather than a specific country. This is the legal argument Professor Enderlein expects the German government will use if and when the law is challenged in the court. While Professor Enderlein expects the German government to have its views upheld by the court, this remains one of the key event risks the markets will be facing in the coming weeks.

The EU-wide package is different from the Greek package: The stabilisation mechanism will have three components: €60 billion from an existing financing facility drawn from the resources of the EU budget, and €440 billion in loans and lines of credit drawn from a newly formed special purpose vehicle whose liabilities will be guaranteed by participating member states. While the €60 billion facility is available to all 27 EU member states, the €440 billion SPV will only be available to the 16 members of the EU who have adopted the monetary union. Finally, up to €220 billion will be made available by the IMF. The euro area stabilisation mechanism announced a week ago used the emergency powers allowed under Art. 122 of the Treaty. It is therefore an operation of the EU as a whole rather than its member countries. Greece, on the other hand, was structured as a set of bilateral guarantees among countries belonging to the EU.

Finally, on the ECB: We think that a strong ECB intervention in the debt markets would weaken the institutional strength of European Monetary Union, but we see this as a possible outcome if central bankers were to feel they were losing their grip on the situation. Pushback from Germany on this extension of the ECB's remit has been and would continue to be very forceful we expect. In this regard, Professor Enderlein noted how, absent inflationary risks, the ECB is meant to support the general economic policies of the European Union according to the treaty, and he thinks this would extend to bond market intervention. We think that questions around ECB independence and the ‘contamination' of the ECB's balance sheet would only grow louder, the longer the ECB keeps intervening.

Y desde Reuters nos dan la siguiente visión de España:

Why Spain’s in worse shape than Greece

Note the circular reasoning in Martin Wolf’s latest column:

Greece is likely to restructure its debt at some point, as John Dizard has argued in the FT. That would not be the worst outcome. Once a country is in the “junk bond” category, no reputation is left.

Or, to put it another way, Greece got downgraded because it is likely to default, and it is likely to default because it got downgraded. This is yet another reason to start ignoring credit ratings.

The main point of Wolf’s column is a very good one:

European orthodoxy is that the crisis is, at root, fiscal. Marco Annunziata of UniCredit summarises it in a recent note: “In hindsight, it seems obvious that the flaw in the eurozone’s institutional setup is both extremely serious and extremely simple: first, a currency union cannot work without sufficient fiscal convergence or integration; second, the eurozone has been unable to create incentives for fiscal discipline.” Mr Annunziata’s chart shows that this view is wrong. Just consider the frequency of breaches of the rules requiring fiscal deficits of less than 3 per cent of gross domestic product. Greece is a bad boy. But Italy, France and Germany had far more breaches than Ireland and Spain. Yet it is the latter that are now in huge fiscal difficulties.

The fiscal rules failed to pick up the risks. This is no surprise. Asset price bubbles and associated financial excesses drove the Irish and Spanish economies. The collapse of the bubble economies then left fiscal ruins behind it.

It was the bubbles, stupid: in retrospect, the creation of the eurozone allowed a once-in-a-generation party.

This, in hindsight, was the biggest weakness of the Maastricht rules, capping debt at 60% of GDP and deficits at 3%. It’s not that the rules were broken: it’s that they were insufficient to prevent the kind of debt-fueled boom which leads inevitably to a fiscal crisis. As Wolf points out, the countries in fiscal trouble, like Spain, aren’t necessarily the ones with the highest sovereign debt ratios: they’re the ones with the highest debt ratios overall, including private debt. (Spain’s public debt is just 56% of GDP; its private debt, however, is 178% of GDP.) And private debt was never included in the Maastricht rules.

In a way, Greece has it easy: a sovereign default and devaluation solves a lot of its problems at a stroke. Spain, on the other hand, has a much tougher task ahead of it, since private-sector defaults won’t make the country any more competitive. And it’s already got unemployment over 20%. Only tough structural reforms have any chance of working, and those will take a long time, and face enormous political opposition. As Andrew Eatwell says:

Having squandered the opportunity to embark on unpopular economic, labour and pension reforms when his popularity ratings were relatively high after the 2008 general election –a period in which he fervently denied that Spain was facing an economic crisis– Zapatero now faces the prospect of tackling those issues while trailing the main opposition centre-right Popular Party in the polls and with a string of potentially tight regional elections around the corner. Necessary but unpopular measures may therefore be put on the backburner or at least kept to a minimum for fear of a voter backlash that could cost the governing Socialist Party dearly in regions such as Catalonia, where the Socialists lead a coalition government and elections are due this autumn. Zapatero also faces a general election in early 2012.

With regional governments accounting for 57 percent of total public spending in Spain, there is a serious risk that national interests and the economy as a whole may find itself subordinated to entrenched regional interests, crowd-pleasing promises and partisan politics.

All of which is different only in degree, not in kind, to what we’re seeing in the US right now.

PD1: ¿Qué le ha pasado a Grecia para estar tan mal? Cuando estuvo creciendo más que la media europea, como España, durante muchos años.

Pero incurrió en nuestros mismos problemas de excesos. Poca productividad y muchas deudas, duplicaron las deudas en 10 años, resultado: fiasco.



PD2: Esto tiene una pinta malísima. A ver qué pasa el fin de semana.

El ministro alemán de Finanzas advierte de que los mercados "están fuera de control"

El ministro alemán de Finanzas, Wolfgang Schäuble, advierte de que los mercados financieros están "fuera de control", por lo que reclama una "regulación efectiva" de los mismos que garantice su funcionamiento apropiado.

En una entrevista concedida al diario Financial Times, Schäuble apunta que los mercados no funcionaran correctamente mientras "los riesgos y las recompensas sigan completamente desequilibrados" y señala la necesidad de estandarizar los productos financieros, regular las transacciones en mercados no cotizados (OTC) y mejorar la transparencia para todos los partícipes del mercado.

Asimismo, el titular de la cartera de Finanzas de Alemania muestra su apoyo a la instauración de un impuesto a nivel internacional que grave las transacciones financieras y propone su discusión "sin prejuicios" en la próxima reunión del G20 en Toronto (Canadá) que se celebrará en junio, aunque si no se alcanzara un acuerdo la UE debería considerar aplicarlo por su cuenta.

El apoyo del ministro alemán a la imposición de una tasa sobre las transacciones financieras refleja la creciente presión de la opinión pública para que los bancos asuman una mayor parte del coste de la crisis, después de los multimillonarios rescates recibidos.

Por otro lado, Schäuble defiende el compromiso de Alemania de aportar hasta 150.000 millones de euros al plan de rescate de 750.000 millones de euros pactado por los líderes europeos para asistir a los miembros más débiles en el caso de que se recrudezcan las presiones del mercados y reitera que este plan es esencial para preservar la estabilidad del euro.

"Los estados miembros de la zona euro tienen la determinación de defender la moneda común (...) Si tienen la determinación necesaria, entonces se mantendrá como una moneda estable", señala el ministro germano, quien reconoció que se esperaba una reacción algo más positiva por parte de los mercados. (cotizalia)

Se van a gastar 750.000 millones de euros y no sirven para nada. El mercado está dando su veredicto. Ahora hay prisas por regular. Llevamos desde el 2008 con la crisis a cuesta y las prisas son ahora.

Han tragado con el “carry trade” de los bancos (se financian al 1% y compraban deuda pública al 4% ganando la diferencia para volúmenes exagerados y dejando estrangulado el mercado de crédito). Pues eso, que les frían a tasas e impuestos a los bancos que no es de recibo ver como las entidades bancarias se hinchan a ganar dinero en épocas de recesión, haciendo gala del tópico: “la banca siempre gana”.

Vivimos sobre montañas de OTCs, de CDOs, de CDS… millones de euros y dólares de derivados, estructuras financieras y más estructuras complejas. Tenemos que simplificar el sistema financiero y comprobar que todo cuadra, que todo el mundo es solvente, que las entidades, privadas y públicas, pueden hacer frente a sus deudas. Queremos solvencia y queremos creer que el sistema financiero está limpio y es fiable. Sino, la salida de esta crisis no será viable ni posible. Y seremos susceptibles de empeorar hasta que esto se nos garantice. Que sí, que regulen todo lo que quieran, que lo simplifiquen y que garanticen y den cobertura al valor del dinero, que hoy por hoy, lo está perdiendo o lo tiene ya perdido. Glubs.