Libero da Confini

Remunerazione degli amministratori esecutivi

2009-06-11T05:49:00.000-07:00

Il dibattito sulle remunerazioni degli esecutivi è sempre più incandescente.

Tim Geithner in un recente intervento ha posto l'accento sulla necessità di arginare gli eccessi e ha proposto in tal senso che i comitati remunerazione siano composti unicamente da amministratori indipendenti, a cui sia concessa la facoltà di avvalersi di esperti esterni - a spese della società - per valutare i termini delle remunerazioni agli esecutivi.

La proposta è certamente condivisibile e dovrebbe essere presa in considerazione da Borsa Italiana nella prossima edizione del Codice di Autodisciplina.

Attualmente il Codice di Autodisciplina dispone che il comitato remunerazione sia composto da non esecutivi, la maggioranza dei quali sia indipendente.

Mentre, per il futuro, dovrebbe essere previsto che il comitato sia composto unicamente da indipendenti, con possibilità per il comitato stesso di farsi assistere da esperti del settore al fine di verificare se la remunerazione degli esecutivi sia eccessiva o meno.

La proposta Schumer sulla corporate governance: un placebo?

2009-06-10T06:00:00.000-07:00

Alcuni giorni orsono il Sen Schumer (NY) ha presentato lo Shareholder Bill of Rights Act of 2009 che, inter alia, prevede:(1) l'eliminazione dei staggered boards per le quotate, (2) l'obbligo di sottoppore al voto assembleare (non vincolante) le remunerazioni degli esecutivi e i golden parachutes, (3) l'attribuzione della presidenza del cda a un indipendente nelle quotate; (4) la costituzione obbligatoria di un comitato rischi in seno al cda composto unicamente da indipendenti “which shall be responsible for the establishment and evaluation of the risk management practices of the issuer».

La presenza di un comitato rischi sembra però essere un mero placebo, come nota giustamente il Prof. Steven Davidoff, il quale rileva: «The Schumer bill seems to assume that independent directors with less familiarity than management can understand the risks associated with a company. It also assumes that every company, including a Tootsie Pop factory as well as a sophisticated financial institution, requires a risk committee.

Yet in many cases, management is not certain of the risk associated with their operations. How do we expect a part-time board to understand and manage this risk? Is this really necessary, or is it a form of false comfort and insurance?».

German banks loaded with 816 billion in toxic paper

2009-04-27T09:23:00.000-07:00

On Friday, the German daily Süddeutsche Zeitung (SZ) leaked a bombshell - a confidential report by Bafin, the Federal Financial Supervisory Authority, found that German banks were sitting on over 800 billion euros in toxic assets. Just three months ago, the reports coming out suggested the problem was only half as large, 400 billion euros.

This new account has been all over the news in Germany because Germans are becoming quite frightened about the health of their banking system and are angry because the German economy was largely absent from the bubbles of the past decade. Germans are beginning to ask quite openly why banks like Commerzbank and the state-owned land banks as well as institutions like Hypo Real Estate are being rescued with taxpayer money. This is a debate now ongoing in a number of countries, the U.S., the U.K. and Ireland most prominent among them. In an election year in Germany, this issue is sure to have an impact.

Credit Writedowns

Money for Nothing

2009-04-27T09:12:00.000-07:00

By PAUL KRUGMAN

On July 15, 2007, The New York Times published an article with the headline “The Richest of the Rich, Proud of a New Gilded Age.” The most prominently featured of the “new titans” was Sanford Weill, the former chairman of Citigroup, who insisted that he and his peers in the financial sector had earned their immense wealth through their contributions to society.

Soon after that article was printed, the financial edifice Mr. Weill took credit for helping to build collapsed, inflicting immense collateral damage in the process. Even if we manage to avoid a repeat of the Great Depression, the world economy will take years to recover from this crisis.

All of which explains why we should be disturbed by an article in Sunday’s Times reporting that pay at investment banks, after dipping last year, is soaring again — right back up to 2007 levels.

Why is this disturbing? Let me count the ways.

First, there’s no longer any reason to believe that the wizards of Wall Street actually contribute anything positive to society, let alone enough to justify those humongous paychecks.

Remember that the gilded Wall Street of 2007 was a fairly new phenomenon. From the 1930s until around 1980 banking was a staid, rather boring business that paid no better, on average, than other industries, yet kept the economy’s wheels turning.

So why did some bankers suddenly begin making vast fortunes? It was, we were told, a reward for their creativity — for financial innovation. At this point, however, it’s hard to think of any major recent financial innovations that actually aided society, as opposed to being new, improved ways to blow bubbles, evade regulations and implement de facto Ponzi schemes.

Consider a recent speech by Ben Bernanke, the Federal Reserve chairman, in which he tried to defend financial innovation. His examples of “good” financial innovations were (1) credit cards — not exactly a new idea; (2) overdraft protection; and (3) subprime mortgages. (I am not making this up.) These were the things for which bankers got paid the big bucks?

Still, you might argue that we have a free-market economy, and it’s up to the private sector to decide how much its employees are worth. But this brings me to my second point: Wall Street is no longer, in any real sense, part of the private sector. It’s a ward of the state, every bit as dependent on government aid as recipients of Temporary Assistance for Needy Families, a k a “welfare.”

I’m not just talking about the $600 billion or so already committed under the TARP. There are also the huge credit lines extended by the Federal Reserve; large-scale lending by Federal Home Loan Banks; the taxpayer-financed payoffs of A.I.G. contracts; the vast expansion of F.D.I.C. guarantees; and, more broadly, the implicit backing provided to every financial firm considered too big, or too strategic, to fail.

One can argue that it’s necessary to rescue Wall Street to protect the economy as a whole — and in fact I agree. But given all that taxpayer money on the line, financial firms should be acting like public utilities, not returning to the practices and paychecks of 2007.

Furthermore, paying vast sums to wheeler-dealers isn’t just outrageous; it’s dangerous. Why, after all, did bankers take such huge risks? Because success — or even the temporary appearance of success — offered such gigantic rewards: even executives who blew up their companies could and did walk away with hundreds of millions. Now we’re seeing similar rewards offered to people who can play their risky games with federal backing.

So what’s going on here? Why are paychecks heading for the stratosphere again? Claims that firms have to pay these salaries to retain their best people aren’t plausible: with employment in the financial sector plunging, where are those people going to go?

No, the real reason financial firms are paying big again is simply because they can. They’re making money again (although not as much as they claim), and why not? After all, they can borrow cheaply, thanks to all those federal guarantees, and lend at much higher rates. So it’s eat, drink and be merry, for tomorrow you may be regulated.

Or maybe not. There’s a palpable sense in the financial press that the storm has passed: stocks are up, the economy’s nose-dive may be leveling off, and the Obama administration will probably let the bankers off with nothing more than a few stern speeches. Rightly or wrongly, the bankers seem to believe that a return to business as usual is just around the corner.

We can only hope that our leaders prove them wrong, and carry through with real reform. In 2008, overpaid bankers taking big risks with other people’s money brought the world economy to its knees. The last thing we need is to give them a chance to do it all over again.

NYT

Le svalutazioni dei toxic assets: a che punto siamo secondo l'IMF

2009-04-27T07:52:00.000-07:00

Fonte: IMF

The Turner Review: a regulatory response to the global banking crisis

2009-03-20T02:27:00.000-07:00

Following the banking crisis, the Chancellor of the Exchequer asked Lord Turner, in his capacity as our Chairman, to review and make recommendations for reforming UK and international approaches to the way banks are regulated.

The Turner Review

Bernanke e le riforme

2009-03-10T08:22:00.000-07:00

Financial Reform to Address Systemic Risk

500 miliardi per RBS e Lloyd TBS

2009-02-24T06:22:00.000-08:00

Taxpayers may become liable for £500bn of poor loans and investments made by Royal Bank of Scotland and Lloyds TSB.
Negotiations are at an advanced stage on what the Treasury has called its Asset Protection Scheme, which would involve taxpayers insuring banks against future losses on their less prudent lending and investment.
It is understood that each of Lloyds and Royal Bank hope to insure £250bn of their loans and investments.

They are working towards a deadline of Thursday for Royal Bank and Friday for Lloyds to agree the outline of the deal with the Treasury.

If £500bn of their assets are insured, this would be a bold attempt by the Treasury to achieve two outcomes: first, to strengthen their balance sheets to avoid having to nationalise the banks fully if their losses increase: second, to release resources within the banks to generate perhaps £30bn or £40bn of new lending to companies and homebuyers.
It would also, however, lift the total of British taxpayer support for our banks since the start of the credit crunch - in the form of loans, guarantees, insurance and investment - to a remarkable £1.3 trillion, more-or-less equivalent to the entire annual output of the British economy or GDP.

Sources close to the negotiations said there are still important disagreements between the Treasury and the banks on the terms of the deal.

One contentious area is the size of the loss - known as the first loss - that the banks must incur before taxpayers pick up the tab.

The Treasury wanted the banks' owners, their shareholders, to be liable for the first 10 per cent of the loss.

But on £500bn of assets, that 10 per cent loss would potentially destroy their balance sheets - and thus end up weakening the banks, rather than strengthening them.

Second, is the size of the fee payable by the banks.

This would be in the form of participating preference shares to be issued to the Treasury and would probably be classed under banking regulations as core tier one capital - which means they would reinforce the financial robustness of the banks.

These shares would carry no votes. So the Government's voting control of Royal Bank would remain at 70 per cent and 43 per cent for Lloyds TSB.

But if the fee were set high, the Government's economic interest in these banks - it claims over the banks' assets - could approach 100 per cent.

In the sense of rights over the banks' profits and assets, there would be little or nothing left for Royal Bank's and Lloyds' private sector shareholders. This would represent "economic" nationalisation of the banks, if not formal nationalisation.

The banks and Treasury officials, together with teams of City advisers, are struggling to construct a formula that avoids this economic nationalisation.

Peston's Picks

Lo Schleswig-Holstein e la città di Amburgo lanciano un salvagente a HSH Nordbank

2009-02-24T05:53:00.000-08:00

Two German federal states on Tuesday agreed a €13bn ($16.6bn) bail-out of HSH Nordbank, the shipping financier, whose losses on complex structured financial products have crippled the regional lender and blown a hole in government finances.

Government leaders from Schleswig-Holstein and the city state of Hamburg met in Kiel to thrash out a rescue package which was comprised of a €3bn capital injection and €10bn in guarantees to cover future losses.

The deal was put together after Germany’s financial regulator had threatened to shut the bank down unless it raised capital, but must still be approved by both state parliaments.

Schleswig-Holstein and Hamburg together own around 60 per cent of HSH, while a further 26 per cent is controlled by JC Flowers, the US investor.

HSH said the injection will raise the bank’s Tier 1 capital from around 7 per cent to almost 9 per cent. The bank also said it planned to reduce the size of its balance sheet by half to around €100bn in the coming years.

“This is good news for the region, the bank, our staff and our clients,” said Dirk Jens Nonnenmacher, HSH chief executive of HSH.

Rasmus Vöge, the regional deputy head of chancellor Angela Merkel’s Christian Democratic Union party, told a newspaper on Tuesday that Schleswig-Holstein was “quasi-bankrupt” as a result of HSH’s losses.

The sentiment was echoed by Wolfgang Kubicki, state head of the Free Democratic party, who warned that without federal assistance Schleswig-Holstein faced “political bankruptcy like Iceland”.

Mr Kubicki told Reuters that HSH would require around up to €9bn in capital over the next four to five years.

Although it is constitutionally impossible for a federal state to declare bankruptcy, the comments underscore the depth of the financial calamity that has befallen the region.

HSH posted a €2.8bn loss last year and was forced to secure €30bn in lending guarantees from Soffin, the federal government’s stabilisation fund. Soffin declined to provide further assistance until the bank met certain conditions.

Around one-quarter of HSH’s 4,000 employees are set to lose their jobs as a result of a restructuring plan that will see the bank cut non-core operations and focus more on its clients in northern Germany.

FT.com

Ribassi storici del mercato finanziario

2009-02-24T05:10:00.001-08:00

Banche fallite negli USA ad oggi

2009-02-24T05:05:00.000-08:00

2008 and 2009 Bank and Thrift Failures ($Mil)

Date	Failed Institution	City	State	Regulator	Total Assets	FDIC Insurance Fund's Estimated Loss	Acquired By	Uninsured Deposits not Acquired	Dividends on Uninsured Deposits
02/13/09	Sherman County Bank	Loup City	Neb.	State	$130	$28	Heritage Bank of Wood River, Neb.	$0.0	N/A
02/13/09	Riverside Bank of the Gulf Coast	Cape Coral	Fla.	State	$539	$201.5	TIB Financial Corp (TIBB) of Naples, Fla.	$0.0	N/A
02/13/09	Corn Belt Bank and Trust	Pittsfield	Ill.	State	$272	$100	Carlinville National Bank, Carlinville, Ill.	$0.0	N/A
02/13/09	Pinnacle Bank	Beaverton	Ore.	State	$73	$12.1	Washington Trust Bank, Spokane, Wash.	$0.0	N/A
02/06/09	County Bank	Merced	Calif.	State	$1,700	$135	Westamerica Bancorporation (WABC)	$0.0	N/A
02/06/09	Alliance Bank	Culver City	Calif.	State	$1,140	$206	California Bank & Trust, held by Zions Bancorporation (ZION).	$0.0	N/A
02/06/09	FirstBank Financial Services	McDonough	Ga.	State	$337	$111	Regions Financial (RF)	$0.0	N/A
01/30/09	Ocala National Bank	Ocala	Fla.	OCC	$224	$100	CenterState Banks of Florida (CSFL)	$0.0	N/A
01/30/09	Suburban FSB	Crofton	Md.	OTS	$360	$126	Bank of Essex, Tappahannock, Va.	$0.0	N/A
01/30/09	Magnet Bank	Salt Lake City	Utah	State	$293	$119	No Acquirer.	$0.0	N/A
01/23/09	1st Centennial Bank	Redlands	Calif.	State	$803	$227	First Califorina Financial Group (FCAL), Camarillo, Calif.	$12.8	0%
01/16/09	Bank of Clark County	Vancouver	Wash.	State	$447	$120 to $145	Umpqua Holdings Corp. (UMPQ), Roseburg, Ore.	$39.3	0%
01/16/09	National Bank of Commerce	Berkely	Ill.	OCC	$431	$97	Republic Bank of Chicago, Oak Brook, Ill.	$0.0	N/A
12/12/08	Sanderson State Bank	Sanderson	Texas	State	$37	$13	The Pecos County State Bank, Fort Stockton, Texas	$0.0	N/A
12/12/08	Haven Trust Bank	Duluth	Ga.	State	$572	$200	BB&T Corp. (BBT)	$0.0	N/A
12/05/08	First Georgia Community Bank	Jackson	Ga.	State	$238	$72	United Bank, Zebulon, Ga.	$0.0	N/A
11/21/08	PFF Bank & Trust	Pomona	Calif.	OTS	$3,700	$700	U.S. Bancorp (USB)	$0.0	N/A
11/21/08	Downey Savings & Loan, FA	Newport Beach	Calif.	OTS	$12,800	$1,400	U.S. Bancorp (USB)	$0.0	N/A
11/21/08	The Community Bank	Loganville	Ga.	State	$681	$200 to $240	Bank of Essex, Tappahannock, Va.	$0.0	N/A
11/07/08	Security Pacific Bank	Los Angeles	Calif.	State	$561	$208	Pacific Western Bank, San Diego, Calif., held by PacWest Bancorp (PACW).	$0.0	N/A
11/07/08	Franklin Bank, SSB	Houston	Texas	State	$5,100	$1,479	Prosperity Bancshares (PRSP), Houston, Texas	$0.0	N/A
10/31/08	Freedom Bank	Bradenton	Fla.	State	$287	$92	Fifth Third Bancorp (FITB)	$0.0	N/A
10/24/08	Alpha B&T	Alpharetta	Ga.	State	$354	$158	Stearns Bank, NA, St. Cloud, Minn.	$0.4	0%
10/10/08	Meridian Bank	Eldred	Ill.	State	$39	$9	National Bank, Hillsboro, Ill.	$0.0	N/A
10/10/08	Main Street Bank	Northville	Mich.	State	$98	$36	Monroe Bank & Trust, Monroe, Mich.	$0.0	N/A
09/25/08	Washington Mutual Bank	Seattle	Wash.	OTS	$307,000	$0	JPMorgan Chase (JPM)	$0.0	N/A
09/19/08	Ameribank, Inc.	Northfork	W.Va.	OTS	$115	$42	Pioneer Community Bank, Iaeger, W. Va., and The Citizens SB, Martins Ferry, Ohio.	$0.0	N/A
09/05/08	Silver State Bank	Henderson	Nev.	State	$1,957	$505	Nevada State Bank, Las Vegas, held by Zions Bancorporation (ZION).	$26.1	0%
08/29/08	Integrity Bank	Alpharetta	Ga.	State	$1,107	$295	Regions Financial (RF)	$0.0	N/A
08/22/08	The Columbian B&TC	Topeka	Kan.	State	$752	$62	Citizens B&T, Chillicothe, Mo,	$28.2	0%
08/01/08	First Priority Bank	Bradenton	Fla.	State	$259	$72	SunTrust Banks, Inc. (STI)	$2.1	50%
07/25/08	First Heritgage Bank, NA	Newport Beach	Calif.	OCC	$254	$42	Mutual of Omaha Bank, Omaha, Neb.	$0.0	N/A
07/25/08	First NB of Nevada	Reno	Nev.	OCC	$3,411	$820	Mutual of Omaha Bank, Omaha, Neb.	$0.0	N/A
07/11/08	IndyMac Bank, FSB	Pasadena	Calif.	OTS	$30,699	$8,900	FDIC conservatorship, since sold to consortium led by J.C. Flowers & Co.	$539.6	50%
05/30/08	First Integrity Bank, NA	Staples	Minn.	OCC	$55	$2	First International B&T, Watford City, N.D.	$0.0	N/A
05/09/08	ANB Financial, NA	Bentonville	Ark.	OCC	$2,100	$214	Pulaski B&TC, Little Rock, Ark., held by IberiaBank Corp. (IBKC).	$10.4	12%
03/07/08	Hume Bank	Hume	Mo.	State	$19	$3	Security Bank, Rich Hill, Mo.	$0.4	63%
01/25/08	Douglass National Bank	Kansas City	Mo.	OCC	$59	$6	Liberty B&TC, New Orleans, La.	$0.0	N/A

The Street.com

La situazione in centro ed est Europa

2009-02-20T05:03:00.000-08:00

Europe’s top banks are bracing for a tough year as concerns grow over the worsening economic situation, especially in eastern and central Europe.

It seems investors are adjusting their ideas about Eastern Europe from a hot growth story to toxic investment -- as countries from Latvia to Bulgaria face potential economic collapse.

And Western banks that went into this market hoping to make a killing – may instead become dead meat, themselves.

According to Reuters, UniCredit (CRDI.MI), Erste Group Bank (ERST.VI), Raiffeisen International (RIBH.VI) and Societe Generale (SOGN.PA) are the biggest Western banks in Eastern Europe. They bought most of emerging Europe's banking sector in past years to tap into the rampant credit growth that fueled the region's boom.

However, since that time the local currencies have fallen in value. (Remember many of the nations in Eastern Europe are not on the euro and many countries in Eastern Europe have racked up massive amounts of debt.)

The fear is rapidly falling currencies could weigh down these banks' profitability and potentially erode their capital base – as loans are repaid in currencies that are worth less and less.

Should you take a short position in any of these currencies? According to Traxis Partners managing partner Barton Biggs probably not.

He tells Fast Money, “I would be very nervous about being short the core Eastern European currencies particularly Poland’s currency."

"And I would be nervous about being short the euro. The euro has already fallen on concerns that its finished and I don’t think that’s the case.”

In fact if you have short positions Biggs says to cover them.

CNBC

Le preoccupazioni di Moody's

2009-02-17T09:25:00.000-08:00

The banking system in eastern Europe is increasingly vulnerable to a severe economic downturn, Moody’s has warned, saying western European banks with local subsidiaries are at risk of ratings downgrades.

“The relative vulnerabilties in east European banking systems will be exposed by an increasingly tougher operating environment in eastern Europe as a result of a steep and long economic downturn coupled with macroeconomic vulnerabilities,” Moody’s said in a report.

The ratings agency said it expected “continuous downward pressure on east European bank ratings” because of deteriorating asset quality, falling local currencies, exposure to a regional slump in real-estate and the units’ reliance on scarce short-term funding.

Eurozone banks have the largest exposure to central and eastern Europe, with liabilities of $1,500bn – about 90 per cent of total foreign bank exposure to the region.

Shares of the handful of banks with substantial investments in eastern Europe – led by Austria’s Raiffeisen and Erste Bank, Société Générale of France, Italy’s UniCredit (which owns Bank Austria) and Belgian group KBC – tumbled after the ratings agency said it was concerned about the impact of a slowdown and the ability of the parent banks to support their support units in the region.

The Austrian banking system is the most vulnerable, with eastern Europe accounting for nearly half of its foreign loans, while Italian banks are exposed to Poland and Croatia and Scandinavian institutions to the Baltic states.

Central and eastern European currencies have come under intense pressure in recent weeks. The credit crisis has raised fears over the region’s ability to finance its current account deficits and slowing global growth has heightened concerns over the health of its export-dependent economies.

The Polish zloty plunged to a five-year low against the euro on Tuesday, while the Czech koruna hit a three-year trough against the single currency and the Hungarian forint falling to a record low.

The Prague and Warsaw stock indices meanwhile fell to their lowest levels in five years, while the smaller markets of Budapest, Zagreb and Bucharest skirted close to multi-year lows.

The euro dropped to a two-month low against the dollar on Tuesday on heightened concerns over eurozone banks’ exposure to the worsening conditions in eastern Europe.

Amid the growing sense of crisis in eastern European economies, Hungary on Tuesday outlined plans to save Ft210bn (€680m, $860m) this year to prevent an increase in the budget deficit. Hungary’s economy is expected to contract by up to 3 per cent this year, much more than earlier expectations.

Antje Praefcke at Commerzbank said eastern European currencies were in a “self-feeding depreciation spiral.”

“The creditworthiness of local banks, companies and private households, who hold mainly foreign currency denominated debt, is deteriorating with each depreciation in eastern European currencies, thus further undermining confidence in the currencies,” she said.

Ms Praefcke said further depreciation of eastern European currencies was thus a distinct possibility, which was likely to undermine the euro.

“The collapse of these currencies is likely to constitute a risk for the euro,” she said. “So far markets have largely ignored this fact, but are unlikely to be able to maintain this approach if the weakness of the eastern European currencies continues.”

Western European banks have piled into the former Communist countries in recent years as economic growth in the region outpaced domestic gains. The accession of 10 new members to the European Union in 2004, and of Romania and Bulgaria in 2007, added to optimism about the region. In 2007, Raiffeisen and Erste Bank earned the vast majority of their pre-tax profits in eastern European countries including Russia and Ukraine.

Since the onset of the global financial crisis, Hungary, Latvia and Ukraine have all received emergency loans from the International Monetary Fund, with other countries in the region expected to follow.

FT.com

Titoli di Stato: la forbice si allarga

2009-02-17T03:47:00.000-08:00

Disparities in the European government bond market increased to the most in at least 10 years after Moody’s Investors Service said it may downgrade some banks with units in Eastern Europe.

The difference between what Germany and Austria pay to borrow for 10 years widened to a record, while the gap between Greek and German 10-year yields increased to the most in a decade. Lenders from Austria, Italy, France, Belgium, Germany and Sweden account for 84 percent of western European bank loans in eastern Europe, Moody’s said.

East European banks, which are mainly subsidiaries of financial institutions such as Austria’s Raiffeisen Zentralbank Oesterreich AG, Italy’s UniCredit SpA and Paris-based Societe Generale SA, are likely to come under “downward pressure” which may also weaken their parent companies, Moody’s wrote in a report today in London.

The difference in yield, or spread, between the 10-year German bund, Europe’s benchmark government security, and the equivalent Austrian security was 129 basis points by 9 a.m. in London, from 120 basis points yesterday and 88 basis points a week ago. The average in the past 10 years is 15 basis points.

The difference in yield between 10-year Italian and German bunds widened to 163 basis points, from 155 basis points yesterday and 119 basis points a week ago.

Bloomberg.com

Quale futuro per l'Europa dell'Est (e per Unicredit)?

2009-02-17T03:39:00.000-08:00

«We've commented from time to time that a possible financial flashpoint is countries that got themselves in the same fix as Iceland , of having a banking sector engaged in the generally risky practices that were standard form recently, and was outsized relative to the economy (Willem Buiter also points out that that precarious situation is made worse by having your own teeny currency).

While Ireland is in that position, a more immediate trigger for trouble is Eastern Europe.

We've mentioned in particular the precarious position of Austria, which was a big lender to the region. As Ambrose Evans-Pritchard remarks in the Telegraph:

Austria's finance minister Josef Pröll made frantic efforts last week to put together a €150bn rescue for the ex-Soviet bloc. Well he might. His banks have lent €230bn to the region, equal to 70pc of Austria's GDP.

"A failure rate of 10pc would lead to the collapse of the Austrian financial sector," reported Der Standard in Vienna. Unfortunately, that is about to happen.

The European Bank for Reconstruction and Development (EBRD) says bad debts will top 10pc and may reach 20pc. The Vienna press said Bank Austria and its Italian owner Unicredit face a "monetary Stalingrad" in the East.

Mr Pröll tried to drum up support for his rescue package from EU finance ministers in Brussels last week. The idea was scotched by Germany's Peer Steinbrück. Not our problem, he said.....

Yves here. Recall we said a few days ago (based on admittedly a small number of conversations, but the Austrian and German businessmen were knowledgeable) that the Austrian banks were widely known to be bankrupt, that Austrians knew they needed to be rescued and would need help. The Austrians were highly confident that Germany would fund a bailout, and the Germans were mystified that the Austrians were so certain. The Germans' doubts appear to have been well founded. Back to the piece:
Stephen Jen, currency chief at Morgan Stanley, said Eastern Europe has borrowed $1.7 trillion abroad, much on short-term maturities. It must repay – or roll over – $400bn this year, equal to a third of the region's GDP. Good luck. The credit window has slammed shut....

"This is the largest run on a currency in history," said Mr Jen.

In Poland, 60pc of mortgages are in Swiss francs. The zloty has just halved against the franc. Hungary, the Balkans, the Baltics, and Ukraine are all suffering variants of this story. As an act of collective folly – by lenders and borrowers – it matches America's sub-prime debacle. There is a crucial difference, however. European banks are on the hook for both. US banks are not.

Almost all East bloc debts are owed to West Europe, especially Austrian, Swedish, Greek, Italian, and Belgian banks. En plus, Europeans account for an astonishing 74pc of the entire $4.9 trillion portfolio of loans to emerging markets....

Whether it takes months, or just weeks, the world is going to discover that Europe's financial system is sunk, and that there is no EU Federal Reserve yet ready to act as a lender of last resort or to flood the markets with emergency stimulus....

Erik Berglof, EBRD's chief economist, told me the region may need €400bn in help to cover loans and prop up the credit system....

The sums needed are beyond the limits of the IMF, w...We are nearing the point where the IMF may have to print money for the world, using arcane powers to issue Special Drawing Rights.

Its $16bn rescue of Ukraine has unravelled. The country – facing a 12pc contraction in GDP after the collapse of steel prices – is hurtling towards default, leaving Unicredit, Raffeisen and ING in the lurch. Pakistan wants another $7.6bn. Latvia's central bank governor has declared his economy "clinically dead" after it shrank 10.5pc in the fourth quarter...

"This is much worse than the East Asia crisis in the 1990s," said Lars Christensen, at Danske Bank.

This is looking ugly indeed, and that's before you consider that European banks are on average much more leveraged than their US counterparts».

Naked Capitalism

Lloyds TBS / HBOS

2009-02-17T03:36:00.000-08:00

L'amaro post di Robert Peston sul drammatico stato di salute della superbanca.

The 10 people most responsible for the recession

2009-02-17T03:30:00.000-08:00

1. Dick Fuld

Multi-billionaire and US squash all-star Dick Fuld, 62, was CEO of Lehman Brothers when it went bust in September last year. Dubbed the “scariest man on Wall Street”, Dick Fuld is blamed for a litany of mistakes that include leaving Lehman Brothers heavily exposed to toxic US sub-prime mortgage debt and other assets that collapsed in value in the wake of the credit crunch.

His secretive work ethic, which rewarded loyalty over all else, has been criticised for silencing potential whistleblowers. In its final months a series of interested buyers surfaced to save Lehmans, but Mr Fuld would not sell at the prices offered. Had he acted sooner, he would have been able to avoid bankruptcy. Institutional Investor magazine named Dick “America’s top chief executive” in 2006. The collapse of Lehmans triggered the second destructive phase in the credit crunch and laid the foundations for a full blown global recession.

2. Hank Paulson

If Dick Fuld is responsible for the collapse of Lehman Brothers, Henry Paulson, the former US Treasury Secretary, is the man who let it happen. Anatole Kaletsky, of The Times, says: “The global banking collapse could perhaps be described as a bullet in the head, since its proximate cause was a conscious decision by the US Treasury to jeopardise the stability of the world economy in pursuit of an essentially political objective - to show that the Bush Administration was willing to act ruthlessly against at least one big Wall Street investment bank. Until that point, savers and investors around the world had assumed that financial institutions such as Lehman were “too big to fail” and would always be supported by their governments. By shattering this belief Henry Paulson triggered a run on every important bank in the world and caused the sudden implosion of consumer and business confidence seen in the past two months.”

Hank didn’t just let Lehmans fail. He made a series of mistakes in the run up to the Lehmans collapse. He also proposed a £700 billion package to boost the US banking system. And how did Hank come up with a figure of £700 billion? “It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com, the US financial website. “We just wanted to choose a really large number.”

3. Alan Greenspan

Alan Greenspan was feted for his management of the US economy while he stood in charge of the US Treasury, but has since been put under the spotlight. He was responsible for cutting interest rates to near zero in the US in the aftermath of September 11, flooding the world with cheap and easily available money. Did this pave the way for a “once-in-a-century credit tsunami"? In October last year he said: “I made a mistake in presuming that the self-interest of organisations, specifically banks and others, was such that they were best capable of protecting their own shareholders.”

Allan Meltzer is a professor of political economy at the Carnegie Mellon University in Pittsburgh, said: “Alan Greenspan was much too afraid of a slowdown or other recession…he allowed the credit to expand too rapidly."

4. John Tiner/Hector Sants

John Tiner was in charge of the Financial Services Authority, the watchdog that polices the UK ’s complex financial services industry until 2007, when it was taken over by Hector Sants. The FSA failed to keep a close eye on Northern Rock, the Newcastle-based ex-mutual which gorged on wholesale mortgage securitisation and came a cropper as a result. A key parliamentary committee has said that the FSA was guilty of a "systematic failure". Mr Sants accepted that the organisation under Mr Tiner failed to stress-test the business model of Northern Rock and spot signs that the bank was dangerously dependent on interbank funding to remain in business. "We should have been in more intense dialogue earlier", he has said.

5. Fred “the shred” Goodwin

The "world's worst banker" has brought the Royal Bank of Scotland (RBS), Britain's second biggest bank, to its knees. Last week it announced humiliating losses of £28 billion, the biggest in British corporate history, and economists and analysts have concluded that it could soon be fully-nationalised. In mid-January, taxpayers saw their stake in the banking giant increase from 58 per cent to 70 per cent.

Sir Fred joined RBS in 2000 and promptly embarked on a spending spree, acquiring 26 banks in seven years for more than £35 billion. These included NatWest and stakes in America and the Bank of China. In 2006, its share price stood at £13. But at the close of trading on January 28, RBS shares were trading at a near-worthless 15.9p.

In 2000, after the takeover of NatWest, RBS’s board rewarded Sir with a £2.1 million annual salary, including a bonus of £814,000 for the takeover — more than any other UK bank chief received that year. It paled in comparison with his £2.86 million bonus in 2007. Three months ago, in October, Sir Fred left the bank under a dark cloud that has now mushroomed into a thunderstorm. On the day his departure was announced, Sir Fred said he was "sad", adding: "Nobody will ever tell you that they feel good the day they have to step down.” The Prince's Trust recently dumped Fred The Shred and the campaign to strip him of his knighthood is gathering pace.

6. Gordon Brown

Apparently Gordon Brown predicted the global financial crisis ten years ago, in a speech he made to Harvard students. Sadly he did little to prevent it. James Gordon Brown was Chancellor of the Exchequer during “the longest period of growth” in the UK ’s history, but economists blame Mr Brown for encouraging soaring house price inflation and the spread of credit which fuelled the years of boom and led eventually to the current bust.

In a recent speech to the London School of Economics, George Osbourne, the Shadow Chancellor, said: "Our competitors used the fat years to prepare for the lean years. Britain did not. We are the least prepared country in the developed world to cope with the current financial turbulence. Our financial reputation has been badly damaged by the only run on a retail bank in the world. Our double deficits - external and fiscal - are worse than any other European economy. Taken together, they are worse than the United States." The blame "lies squarely and fairly with Gordon Brown", he concluded.

7. George Bush

The former President was in charge during the boom years when the seeds of the sub-prime implosion were sown, but has failed to take any responsibility for the financial disaster which occurred on his watch. In a speech last year he blamed the bankers in New York for the problems facing his country's economy. “Wall Street got drunk…The question is, how long will it [take to] sober up and not try to do all these fancy financial instruments?”

8. Kathleen Corbet

The credit rating agencies have been blamed for failing to ask tough questions about the collateralised debt products containing so many toxic sub-prime mortgages, which investors traded for millions of dollars during the booming housing years. The three biggest agencies have been accused of taking the word of investors and not properly assessing the risks involved in securitisation. Mrs Corbet was head of the biggest credit rating agency, Standard & Poors, before she quit amidst heavy criticism in 2007. Critics argue that S&P and its main rival Moody's, as well as other agencies, face an inherent conflict of interest, in that many of their clients issue securities that are rated by its analysts.

9. "Hank" Greenberg

Another Hank. This one was head of AIG, the insurance giant that had to be rescued in an £47 billion US government bailout just days after Lehman Brothers was allowed to go bust. Hank was in charge between 1967 until 2005, during which time the insurer got heavily involved in the murky world of credit default swaps. Mr Greenberg appealed to the US Government to save the company last September, saying: "It's a healthy company financially except for liquidity. No organisation around the world has the spread of risk that AIG does. It's a company that opens markets - letting it go down would be a dramatic mistake."

10. Angelo Mozilo

Mr Mozilo was head of the largest sub-prime mortgage lender in the US, Countrywide, until July 2008. Sub-prime lenders in the US have been accused of using misleading marketing to push unsuitable mortgages on sub-prime homeowners who could not afford to service the debt, the root cause of the credit crunch. During the housing boom, Mr Mozilo reportedly earned $470 million in salary and other income. Mr Mozilo has also been under the spotlight for a VIP programme in which politicians and senior officials in the Government were offered favourable mortgage deals. Earlier this month Bank of America agreed to buy Countrywide for about $4 billion (£2 billion). Meanwhile, Mozilo unloaded $141m in stock options before the company's share price collapsed.

Money Central (votate per il sondaggio)

S&P 500: giugno 2008 - gennaio 2009

2009-02-12T11:29:00.000-08:00

1 6/3 Obama Clinches Nomination.

2 6/7 Markets Slammed by Oil, Crude Leaps Nearly $11.
3 6/10 Big Loss At Lehman Intensifies Crisis Jitters.
4 6/11 Inflation’s Bite Worsens Around World.
5 6/21 Ford Reels as Truck Sales Plunge.
6 6/28 Dow Hits Bear-Market Territory.
7 7/12 Crisis Deepens as Big Bank Fails: IndyMac Seized In Largest Bust In Two Decades.
8 7/14 Treasury and Fed Pledge Aid For Ailing Mortgage Giants.
9 7/16 SEC Moves to Curb Short Selling.
10 8/11 Russia Widens Attacks on Georgia.
11 9/8 US Seizes Mortgage Giants FNM and FRE.
12 9/15 Crisis on Wall Street as Lehman Totters, Merrill Is Sold, AIG Seeks to Raise Cash.
13 9/17 US To Take Over AIG in $85 Billion Bailout; Central Banks Inject Cash as Credit Dries Up.
14 9/20 US Bailout Plan Calms Markets, But Struggle Looms Over Details.
15 9/22 Goldman, Morgan Scrap Wall Street Model, Become Banks in Bid to Ride Out Crisis.
16 9/26 WaMu Is Seized, Sold Off to JP Morgan, In Largest Failure in US Banking History.
17 9/30 Bailout Plan Rejected, Markets Plunge, Forcing New Scramble to Solve Crisis.
18 10/4 Historic Bailout Passes As Economy Slips Further.
19 10/14 US to Buy Stakes in Nation’s Largest Banks.
20 10/23 Markets Fall as Fears of Slump Span World.
21 10/28 Crisis Deals New Blow to Japan: Stocks at ‘82 Levels.
22 11/5 Obama Sweeps to Historic Victory.
23 11/19 Big Three Plead For Aid.
24 11/24 US Agrees to Rescue Struggling Citigroup.
25 12/12 Top Broker Accused of $50 Billion Fraud.
26 12/17 Fed Cuts Rates Near Zero to Battle Slump.
27 12/29 Israel Pounds Gaza Again, Signals More on the Way.
28 1/3 Manufacturing Tumbles Globally.
29 1/8 Corporate Scandal Shakes India.
30 1/10 Citigroup Takes First Step Toward Breakup.
31 1/15 Bank of America to Get Billions in US Aid.
32 1/21 President Barack Obama.
33 1/23 Thain Ousted in Clash at Bank of America.

The Big Picture

8 banchieri alla berlina

2009-02-12T09:20:00.000-08:00

Ieri sono stati messi alla berlina dallo House Financial Services Committee 8 banchieri di Wall Street circa l'uso dei fondi ottenuti attraverso l'adesione ai TARP

I CEO chiamati a testimoniare: Kenneth D. Lewis - Bank of America; Robert P. Kelly - Bank of New York Mellon; Vikram Pandit - Citigroup; Lloyd C. Blankfein - Goldman Sachs; Jamie Dimon - JPMorgan Chase; John J. Mack - Morgan Stanley; Ronald E. Logue - State Street; e John G. Stumpf - Wells Fargo.

DealBook ha pubblicato il resoconto dell'audizione che riporto qui di seguito.

5:03 p.m. | It’s over: The hearing adjourns.

4:58 p.m. | Lending — a tough job: Representative Dan Maffei, Democrat of New York, asks Mr. Dimon how he his going to get money into the system. Mr. Dimon says all the government programs need to be implemented quickly and on a coordinated basis. He also notes that nonbank financing companies have essentially dropped off lending leaving the banks to make up for that gap, which will be tough to fill.

4:50 p.m. | That other bailout (autos): Asked whether they have received any specific proposals from the auto industry for overhauling its debt. Mr. Lewis says his bank is deep in discussions with the automakers. Asked whether the auto companies should go into bankruptcy, Mr. Dimon says it depends on the terms, but either way his bank will not make money.

4:49 p.m. | We love Michigan, but…: Representative Gary Peters, Democrat of Michigan, asks if his state is being singled out as a place where the banks won’t lend. Mr. Dimon and Mr. Lewis say that they want to make every good loan they can, but that because Michigan has the highest unemployment in the nation, they will likely do less business there.

4:42 p.m. | Rewards for the long term: Representative Jim Himes, Democrat of Connecticut, asks if any of the bankers if they will craft compensation plans that reward people for longterm performance and not for taking huge risks. They all agree to do so.

4:33 p.m. | Lingering questions about A.I.G.: Mr. Blankfein is asked how much money Goldman Sachs received from the rescue of A.I.G. Mr. Blankfein says that his bank was called by the New York Fed to advise it on a private market solution to A.I.G., but that Goldman did not have unhedged exposure to A.I.G.

4:31 p.m. | No daydream believers: Representative Andre Carson, Democrat of Indiana, tells the bankers that “the public doesn’t believe you learned from your errors.”

4:27 p.m. | Survivor (not the TV show): Representative Donald A. Manzullo, Republican of Illinois, asks the bankers whether they would survive if unemployment rose to 11 percent and a 25 percent further decline in real estate prices Mr. Mack says it would be painful, but Morgan Stanley would survive. Mr. Blankfein says Goldman would survive, but “we may be in a downward bubble” since everyone is pessimistic.

4:20 p.m. | “Feed the troops”: Representative Joe Donnelly, Democrat of Indiana, tells the bankers to “feed the troops before they feed themselves.” “We are counting on your good judgment,” he says. He also asks the bankers whether they can work with small businesses who are paying their loans but their ratios might be off. Mr. Stumpf says they are working with small companies.

4:16 p.m. | Mark to market: Mrs. Biggert asks whether anyone would do away with mark-to-market accounting. Mr. Stumpf and Mr. Lewis said it should be modified for extraordinary times when there is no market for products.

4:13 p.m. | “We’re still standing”: Representative Judy Biggert, Republican of Illinois, asks how banks can restore confidence, and Mr. Dimon offers up some patriotic words: “We will beat this thing. We are bruised and battered, but we’re still standing and I believe America will do what it’s always done” and get through the problem.

4:10 p.m. | “Not a bad thing”: Responding to a question of whether some banks are too big, Mr. Mack says Morgan Stanley isn’t too big and he intends to grow, but notes there could be an issue with banks getting into too many businesses. Mr. Dimon says that “large itself is not a bad thing” and notes the United States military is big.

4:05 p.m. | Into the unknown: “The question I and nobody else will know is what would have happened” if the TARP money wasn’t there, Mr. Dimon says.

4:01 p.m. | Solvency? Yes. Nationalization? No!: Responding to a question about bank solvency, Mr. Pandit says Citigroup’s Tier 1 capital ratio is 12 percent, well above what the regulators require, and he believes the bank is very well capitalized. Mr. Lewis says his Tier 1 capital ratio is about 10.6 percent and notes that Bank of America made money last year. Asked about whether Bank of America or Citigroup should be nationalized, both bankers said no.

3:50 p.m. | Seeking commitments: Representative Mary Jo Kilroy, Democrat of Ohio, asks Mr. Lewis if he stands by his commitment that Bank of America will not need additional government funding. Mr. Lewis says stands by the statement. Ms. Kilroy asks the other members whether they can commit to fully paying back the government. Mr. Blankfein says that it is his expectation to pay the government back. Mr. Dimon, Mr. Kelly and everybody else says they also expect to repay the government. Mr. Pandit says he cannot commit to not accepting more capital under a government program because it may be beneficial to his shareholders.

3:42 p.m. | No less anger: A congressman from Texas says the American people won’t have any less anger after the hearing because they don’t know where the money has gone. He asks if the bankers can ascertain the amount of new money that has been lent out directly attributable to TARP. Everybody raises their hands except for Mr. Stumpf, who says all of the loans go into the same pool of capital.

3:30 p.m. | “Mr. Countrywide”: A congessman from Florida doesn’t seem to know who the bankers are. He mispronounces Mr. Dimon’s name and asks the panel who “Mr. Countrywide” is. Mr. Lewis said he is “not Mr. Countrywide.”

3:27 p.m. | More calls for a moratorium: Mr. Frank notes that the Office of Thrift Supervision has also asked for a moratorium on foreclosures until the home modification plan is in effect.

3:20 p.m. | “The better angels”: Representative David Scott, Democrat of Georgia, asks the bankers to “let the better angels of our nature to shine through,” quoting Abraham Lincoln. He asks them to commit to having a moratorium on all foreclosures until the Treasury secretary can implement his rescue plan. “That would be a tremendous gesture,” Mr. Scott says. Mr. Lewis asks for a time frame, Mr. Scott says three weeks. Mr. Pandit as well as everyone else says they will commit to keeping people in their homes.

3:10 p.m. | Reaching out to homeowners: Responding to a question from Representative Rubén Hinojosa, Democrat of Texas, Mr. Pandit says Citigroup tries to reach out to homeowners before they start missing payments.

3:08 p.m. | “They are suffering”: Representative Walter B. Jones, Republican of North Carolina, says: “For God sakes Mr. Lewis, do everything you can to free credit because they are suffering”

3:04 p.m. | And we’re back: Apparently in the middle of questioning.

3 p.m. | Still on break: Voting takes time, apparently.

2:22 p.m. | Break: A 20-minute recess while the representatives vote.

By the way, some advice for the panel: Mr. Blankfein’s name is pronounced “Blank-fine,” not “Blank-fin” or “Blank-feen.” Mr. Dimon’s name is pronounced “Dye-mon.”

Separately, banking chiefs: make sure your microphone is on before you start speaking. Thank you from the spectators’ seats.

2:15 p.m. | Was the bailout necessary?: At the time, Mr. Blankfein and Mr. Lewis say, no. But in hindsight, yes, in order to bring about stability.

A followup: Why can’t consumers get access to credit? Mr. Lewis ventures that it’s because of declining home values. Some verbal jujitsu follows, as the congressman assails the once-plentiful availability of credit cards. (His own daughter was once offered a card when she was younger.) “We’re the ones having to bail you out because of the losses there,” he says. The chiefs remain silent.

Now we move onto best practices. Applied to risk management, Mr. Mack says, the term would mean that the risk-management team would report directly to the chief executive and not a trading group.

2:11 p.m. | Where’s the private capital?: When private capital will come back into the banks? Mr. Blankfein says that it will come when uncertainty lifts.

Over-regulation is a potential problem, some of the chiefs agree with their interrogator.

2:06 p.m. | Where’s the money?: Will the banks lose more money? Mr. Stumpf recollects his time as a collector and says that job losses are key to answering the question. Mr. Pandit agrees that unemployment is important; when asked about when credit will flow again, he says “we’re doing everything we can.”

Mr. Mack says Morgan Stanley is lending to corporations. It doesn’t do much to consumers because it’s not a very consumer-facing firm.

2:02 p.m. | Back to TARP 2: First and foremost, this admission from Mr. Blankfein: Trains are more relaxing and conducive to reading.

Will TARP 2 work, asks Representative Patrick T. McHenry of North Carolina? Mr. Blankfein, Mr. Dimon and Mr. Kelly say yes, if done well. Mr. Lewis, his Carolinian compatriot, is asked about transparency — on the government side? Sure, comes the reply.

1:55 p.m. | “America doesn’t trust you anymore.”: How many banks lent money to investors who in turn bought credit default swaps? How many invested in CDS or off-balance-sheet vehicles like SIVs? More than a few executives raise their hands at one point or another.

“All of your or at least most of you engaged in at least some of the activities that led us to this crisis,” the interlocutor responds, specifically SIVs. “I can’t believe that no one has prosecuted any of you over this.”

Coming to Congress on their bicycles, after having bought Girl Scout cookies, and saying they’re sorry? Not enough. The congressman compares banking chiefs to bank robbers who say they’re sorry.

1:44 p.m. | Autos and bonuses: What are these banking chiefs’ views on the viability of the American auto industry? Several executives say that they are supportive of the industry, including by making auto loans.

Back to TARP money received in 2008, salary and bonuses, or lack thereof.

Mr. Stumpf: $25 billion. $850,000 salary. No bonus.

Mr. Pandit: $45 billion. $1 million salary. No bonus. He will take $1 salary until Citi turns a profit again.

Mr. Mack: $10 billion. $800,000 salary. No bonus.

Mr. Logue: $2 billion. $1 million salary. No bonus.

Mr. Lewis: $15 billion. $1.5 million salary. No “incentive.”

Mr. Kelly: $3 billion. $1 million salary. No bonus.

Mr. Dimon: $25 billion. $1 million salary. No bonus.

Mr. Blankfein: $10 billion. $650,000 salary. No bonus.

1:39 p.m. | All apologies?: Should the industry apologize for what happened? Mr. Mack says, essentially, yes, the industry has responsibility to shoulder for what has happened to the economy and to shareholders. He accepts some.

1:35 p.m. | What’s needed next: What can the government do to bring back stability? Mr. Pandit: stabilize housing and create jobs. Mr. Geithner’s speech on Tuesday was a good start, he said, but banks are awaiting more details.

Mr. Dimon: good fiscal stimulation is crucial. Mortgage-modifications are good.

Mr. Lewis: The TARP doesn’t have to have permanently changed the face of the free-market economy in the United States. Mr. Kelly agrees.

1:32 p.m. | Raise your hands: An insistent Mr. Ackerman asks about dividend payments made after the banks received government money. “Money is fungible, don’t insult our intelligence,” he says, before urging the banking chiefs to adopt a policy forbidding the payment of dividends.

Then he asks who owns or leases a corporate jet. All but Mr. Blankfein raise their hands. Mr. Ackerman again strongly suggests that banking chiefs forego their private corporate jets.

He then asks Mr. Pandit why Citi will not issue additional securities to protect taxpayers. Mr. Pandit says that he and his firm are striving to make taxpayers a profit.

1:22 p.m. | We’re back: Representative Scott Garrett of New Jersey asks Mr. Blankfein about Goldman’s exposure to A.I.G. The banking chief says that the insurance giant was a major player in the credit markets. While its notional exposure was $20 billion, Goldman significantly hedged its exposure and was collateralized, Mr. Blankfein said.

12:35 p.m | Break time: The hearing takes a short recess. The grilling will resume at 1:15 p.m.

12:32 p.m. | Skin in the game: The banking chiefs are asked how much personal money they have invested in their companies in the last six months. Mr. Dimon says $12 million, Mr. Lewis says he bought 400,000 Bank of America shares, and Mr. Pandit says $8.4 million; the rest of them say they had put nothing new into their companies.

12:30 p.m. | Where did it go?: The overarching question of the day gets asked again: “What did you do with the new money?” asks Gary Ackerman of New York, who comments that it seems to him that the banks aren’t loaning it out. Mr. Dimon says bank lending is flat year over year, but adds that there is a huge amount of nonbank lending that has gone away. Car financing, money funds and others stopped lending, he says, adding that JPMorgan lent out $50 billion to $75 billion to nonprofits and other institutions.

12:24 p.m. | Paying it back: Executives at some big banks have already suggested that they want to repay their TARP funding as quickly as possible. But Mr. Dimon of JPMorgan tells the panel that there is a legal impediment to paying the TARP money back before three years, even if he wanted to, because TARP recipients are required to replace it with private funds, and many banks don’t want to do that.

12:22 p.m. | Pay restrictions: Mr. Hensarling asks about executive compensation restrictions and whether they will lead to a loss of talent; this is an issue commonly raised by those who oppose pay limits for TARP recipients. Mr. Mack of Morgan Stanley says that at the most senior levels, he’s not concerned, but below that level he as already seen defections to European competitors and others.

12:19 p.m. | Too big to fail: Ms. Capito poses this question to the banking bosses on the panel: Are you too big to fail? Mr. Pandit replies that his company is a large bank, and in the current environment, nobody has been spared. But he also notes that Citi is reorganizing into two parts that are a lot smaller. Mr. Lewis says that diversified companies have done better, but asserts that the issue is not size, but a financial institution’s role in the capital markets in general. The real question, he says, is not size but “if you’re systemically important.”

12:17 p.m. | Back to credit cards: Representative Shelley Moore Capito of West Virginia revisits the credit card issue, asking why card holders who haven’t missed any payments are seeing an increase in their interest rates. Mr. Pandit responds that Citigroup hadn’t raised rates in two years, and states that funding costs went up, so they had to raise rates. Mr. Dimon tells the congresswoman to send him any customers who think they shouldn’t have their rates increased and he’ll deal with them.

12:10 p.m. | The Pfizer-Wyeth deal: The bankers are asked about the merger of drug companies Pfizer and Wyeth, which is being financed by billions of dollars in loans, some from banks represented at today’s hearing. The question comes from Representative Nydia M. Velazquez of New York, who says that the merger is expected to result in the loss of 19,000 jobs and wants to know why banks are lending only to big companies but not to small business. None of the bankers answer the question.

12:00 p.m. | Fannie and Freddie: Representative Edward R. Royce asks to what extent the mortgage securitization process, led by Fannie Mae and Freddie Mac, was part of the problem. Mr. Stumpf of Wells Fargo — which originated relatively few of the most exotic kinds of mortgage loans — says that the problem started a long time before 2007 with “crazy things” such as negative amortization loans and so-called liar loans. “There’s no question that Fannie and Freddie played a part in that,” Mr. Stumpf says.

11:58 a.m. | Valuing bad assets: Responding to a question from Representative Luis V. Gutierrez of Illinois, Mr. Pandit of Citigroup says that valuing assets on a company’s books is a complicated process. One way to do it is for the government to take the bad assets, take the losses and then “send us a bill” when the economy recovers.

11:51 a.m. | Super-regulator: Representative Peter King of New York asks about the creation of a systemic risk regulator and how that would work. Mr. Mack says the idea of a systemic risk regulator “is critical” and praises the idea of combining several regulators and having more global coordination. “We need to have a super-regulator,” he says.

Mr. Dimon also states that the regulators aren’t to blame for what happened, but says there is an alphabet soup of regulators and several unregulated businesses. He says he sees tremendous benefits to having one regulator that looks at everything with an eye toward systematic risk and suggests the Federal Reserve could be up to the job.

11:44 a.m. | Those Merrill bonuses: The conversation inevitably turns to the $3.6 billion in bonuses paid to Merrill Lynch employees right before the firm was bought by Bank of America. Representative Carolyn Maloney of New York asks: “How can you justify paying bonuses to managers who are running the company into the ground so much that they were forced to sell?”

Mr. Lewis says his personal involvement was very limited, but states that his company urged Merrill to reduce the bonuses substantially. Still, he says, Bank of America had no authority to force them to do anything before the merger closed.

11:39 a.m. | ‘An awful year’: “This is going to be an awful year for the credit card industry,” Mr. Lewis says, adding that he is prepared to deal with the loses. Mr. Dimon says he expects credit card losses at JPMorgan to be more than $10 billion this year, or 8 percent of the total credit card debt outstanding.

11:32 a.m. | Credit card rates: Representative Maxine Waters of California wants to know if any of the bankers have increased the interest rates on credit cards since they received TARP money. Mr. Lewis says Bank of America increased rates on 9 percent of its customers in 2008. The other bank executives also raise their hands and say they increased credit card rates.

Then Ms. Waters raises another issue: She says Bank of America paid itself $30 million in fees just to take the TARP money. Mr. Lewis says he doesn’t know what she is talking about. Mr. Pandit of Citigroup says the fees were paid to underwriters for issuing government-backed debt, which is standard industry practice.

11:27 a.m. | A market solution?: Is it time for the government to step back and let the market work through the toxic assets on banks’ balance sheets? That’s what Representative Randy Neugebauer is asking: “The deeper we get into this, the tougher the exit strategy is,” he says.

Mr. Blankfein says that accounting regimes allow banks to mark their assets at what they expect the value would be in the future. Mr. Pandit says his company has sold a lot of troubled assets over the last few months, but adds that there is not enough capital in the market to buy these assets unless they go for extremely low prices.

11:24 a.m. | When the wind shifted: Mr. Lewis of Bank of America says he began seeing economic headwinds in late July 2007 but thought “the economy was in pretty good shape” going into the fourth quarter of that year. Mr. Blankfein of Goldman says Wall Street became aware of the problem earlier, but people didn’t realize how much Wall Street was tied to Main Street.

11:20 a.m. | Preventing a replay: Representative Paul E. Kanjorski asks about what steps the government could take to make sure “this never happens again.” He also asks the Wall Street bankers how they missed the problems in the economy.

11:15 a.m. | A TARP optimist: Mr. Bachus notes that he thinks the TARP funds will be a very good investment for American taxpayers. He praises the banks for their efforts to reduce risk and leverage. He also says he “was shocked that lending wasn’t down 15 or 20 percent.” Mr. Bachus asks if the banks can avoid forcing good borrowers to make principal payments.

11:10 a.m. | On bonuses: “If you weren’t getting a bonus,” Mr. Frank asks, “what would you not do? Would you take longer lunches or leave early on Wednesday?” He goes on: “Why do you need to be bribed to have your interests aligned with the company?” Mr. Mack replies that “we love what we do, if you gave us no bonus we would still be here.”

11:08 a.m. | Foreclosures: Mr. Frank urges all the banks to withhold any foreclosures until the government’s rescue plan goes into effect.

11:06 a.m. | Opening statements end: It’s question time — or castigating time, depending on your point of view.

11:01 a.m. | And yet more loans: Mr. Stumpf, of Wells Fargo, says the bank made $72 billion in new loans in the fourth quarter. “We do business and lend money the old fashion way — responsibly and prudently,” he says. “We are Americans first and bankers second.”

10:55 a.m. | Citi’s plane: Toward the end of his speech, Mr. Pandit goes off script and acknowledges the public criticism earlier this month when Citigroup was set to take control of a new $50 million corporate jet. He apologizes for not reacting fast enough to the public outrage: “I get the new reality,” Mr. Pandit says.

10:52 a.m. | A few missteps: Mr. Mack says Morgan Stanley has increased transparency and reduced risk, “but they didn’t do everything right” and he takes full responsibility for that. In the fourth quarter, the firm raised over $50 billion in debt for corporations like General Electric and Time Warner Cable. Later, he says: “I know that the Americans are outraged about compensation costs.”

10:48 a.m. | Mutual funds: Mr. Logue, of State Street, says that after receiving the TARP funds, his firm helped made $1.5 billion in capital available to mutual funds to help them meet their redemption requests.

10:42 a.m. | More loans: Bank of America is lending, Mr. Lewis says in his opening statement. In the fourth quarter, the bank made $115 billion of new loans to consumers and businesses and refinanced thousands of loans over the quarter. “We understand that taxpayers are angry” and they deserve to know how we are spending their money, he said.

10:39 a.m. | A profitable bank:: Mr. Kelly, of Bank of New York Mellon, noted that his bank was profitable every quarter last year and said it didn’t really need the TARP funds. The funds allowed the bank to purchase mortgage securities and $900 million of debt securities from other financial institutions. “We have not used any of the funds to pay dividends or compensation,” he says.

10:34 a.m. | JPMorgan’s loans: Jamie Dimon is next — the bankers are speaking in alphabetical order — and he said he did not seek the government’s money. He also tells lawmakers that JPMorgan made over $150 billion in new loans in the fourth quarter, not including $50 billion in loans to other banks that the firm made on an overnight basis.

10:32 a.m. | Goldman’s bonuses: Addressing the sensitive issue of compensation, Mr. Blankfein says Goldman’s bonuses in 2008 were down 65 percent on average, and senior executives’ bonuses were down 75 percent. Goldman’s top management decided not to take any bonuses this year.

10:28 a.m. | Now to the bankers: Mr. Blankfein, the Goldman honcho, points out that his firm recently committed capital to student lender Sallie Mae to allow it to make more loans.

10:24 a.m. | Market confidence (or lack thereof): Representative David Scott of Georgia seems to want the bankers to single-handedly restore confidence to the markets at the hearing. “If there’s one thing you gentlemen can do today is to demonstrate that what has happened in the past is an aberration,” he said. “At the heart of this hearing is confidence.”

10:22 a.m. | Public perception: Representative J. Gresham Barrett of South Carolina says “his folks” haven’t seen the evidence that the money given to the banks is working and making their lives better.

10:17 a.m. | Government’s role: Representative Jeb Hensarling of Texas says some of the public pillorying that the bank executives are going to take today is deserved, but adds that government also has to own up to its responsibility as well.

10:13 a.m. | A distinction: Representative Spencer Bachus, the Republican from Alabama who is the committee’s ranking Republican member, offers a word of caution — “some wanted the money; some didn’t want the money” — and says it would be a mistake for the American people to look at this group as one group.

10:10 a.m. | ‘Collateral benefit’: “We are now in a serious negative economic situation,” Mr. Frank says in his opening remarks. “We have to get out from under where we are now.” Now he points to the banking executives. “You are the recipients of collateral benefit, but you need to understand how angry that makes people.”

10:05 a.m. | Not a laughing matter: Representative Barney Frank, the Massachusetts Democrat who chairs the committee, lays down the law to the audience. While he says he supports free speech, he wants the audience to stay silent, including any “forced laughter” that may come out of anyone’s comments.

10:01 a.m. | Paparazzi: Before the hearing starts, the always-colorful Jamie Dimon asks the gaggle of photographers, “What do you guys do with all these pictures?”

9:23 a.m. | The bankers’ statements: In statements submitted before the hearing and posted on the committee’s Web site, the executives generally defended how they have been deploying the funds they received from the government’s Troubled Asset Relief Program, or TARP.

Mr. Blankfein of Goldman Sachs said his firm was “actively putting our capital to work”; Mr. Lewis of Bank of America said his company was “lending far more” that it would have without the TARP; Mr. Dimon of JPMorgan said his firm continued to make loans even as it sought to maintain a “fortress balance sheet.”

DealBook

Bank Executives Tell House Panel They Are Lending

Bebchuk e Posner sui limiti ai compensi per i managers

2009-02-12T08:26:00.000-08:00

Per diverse ragioni sia Bebchuk sia Posner si dicono contrari ai limiti salariali per i managers.

Bebchuk

Posner

Le lacune del piano Geithner 2

2009-02-10T10:22:00.000-08:00

Felix Salmon su Portfolio

«I like the symmetry here. On November 21, when Barack Obama announced that he was nominating Tim Geithner to be his Treasury secretary, the Dow rose 494 points and broke through the 8,000 barrier. On February 10, when Geithner gave his first major speech as Treasury secretary, the Dow fell 273 points and broke through the 8,000 barrier.

The speech was surprising only in its vagueness. It's been over 11 weeks since Obama's announcement, and this is the best that Geithner can come up with?

We are exploring a range of different structures for this program, and will seek input from market participants and the public as we design it.

Geithner promises unprecedented levels of transparency for the new plan. So far, all we have is talk. The markets will wait to actually see the details -- and, of course, will wait for Congressional approval of all this -- before they start believing.»

Le lacune del piano Geithner

2009-02-10T10:18:00.000-08:00

The leading indices had opened lower as investors began to digest leaked details of the proposals and awaited expected Senate approval of the economic stimulus package.

“The slide in US equities are a fairly obvious thumbs down,” wrote Marc Ostwald, Strategist at Monument Securities. “It certainly looks like Mr Geithner and his team will need to go back to the drawing board again. A lot of this looks like a re-working of existing plans/programmes.”

Alan Ruskin, senior analyst at RBS’s global banking and markets division, said that, based on the leaked excerpts, the plans looked “worryingly short of new initiatives; short on detail on the main fresh initiative; and, short on the confidence factor that this will all work out fine.”

FT.com

Tim Geithner parla e il mercato crolla

2009-02-10T10:12:00.000-08:00

La freccia indica l'inizio del discorso di Geithner

Alea

Non va poi tutto così male

2009-02-10T10:02:00.000-08:00

Mario Margiocco ha scritto sul Sole 24 Ore del 1° febbraio un bell'articolo in cui sono messi in risalto i dati positivi, nonostante la crisi, di alcuni settori.

«Così Silicon Valley salva Wall Street

Il 3 ottobre 1934, per volontà di David D. Rockefeller jr., si inaugurava al 65° piano del GE building, al Rockefeller center, la Rainbow room, gran ritrovo al top del mondo. La disoccupazione era oltre il 20 per cento, negli Stati Uniti. Da allora, la Rainbow Room è stata lo specchio della fiducia di New York.

Oggi una parte rischia la chiusura, c'entra anche il calo della ristorazione di lusso, ma la disputa è soprattutto su un aumento del canone d'affitto che Cipriani, dal '98 gestore dei locali, ritiene esoso: la proprietà si comporta come se gli affitti crescessero al ritmo di ieri, ma non è più così, e la vertenza è mediata da un giudice. Può darsi che l'intera Rainbow room sopravviva intatta. Come continua ai piedi del Rockefeller Center il Radio City Music Hall, altro simbolo della fiducia controcorrente ai tempi della Depressione. Nato per grandi musical, che non reggevano nel '32, passò ai film l'anno dopo, inaugurati da "L'amaro thé del generale Yen" di Frank Capra, e da allora è simbolo di una New York che non cede.

È possibile, anche oggi, salvare una riserva vitale di fiducia. Accanto a molte imprese e settori che riducono il personale, non manca chi assume. Per prima cosa, e malgrado i pessimi dati economici su quasi tutti i fronti, quasi sempre i crolli di produzione, gli aumenti di disoccupazione, la frenata dei consumi hanno ancora un precedente peggiore negli ultimi 60 anni. Questo vuol dire che altre volte l'economia mondiale si è trovata in condizioni non troppo diverse.

Due aspetti tuttavia pesano oggi in modo abnorme e sembrano identificare lo specifico della stagione attuale: il debito, che mai è stato sul Pil ai livelli 2007/2008 soprattutto in Stati Uniti e Gran Bretagna; e il pessimismo, che però come l'ottimismo di alcuni anni fa ha senz'altro una componente irrazionale. Del tutto irrazionale l'ottimismo di ieri, certo in parte irrazionale il pessimismo di oggi. Non a caso i due troppo a lungo inascoltati maestri dell'irrazionalità economica, John Maynard Keynes e Hyman Minsky, sono tornati in gran voga.

In molti hanno scritto che i due emblemi della grande crisi, negli Stati Uniti, sono Wall Street smembrata e la Silicon Valley in letargo. Wall Street è a pezzi, chissà quando e come risorgerà, e si è portata dietro una fetta non piccola, tra l'altro, del potere americano. Dalla Silicon Valley tuttavia le notizie non sono così brutte. La Hewlett Packard, primo gruppo tecnologico mondiale, ha cancellato gli aumenti di stipendio che dovevano scattare a febbraio, ma continua l'ambizioso programma di rinnovamento tecnologico affidato al Cio, Randy Mott.

Attorno alla società che ha creato la Silicon Valley, e che fu fondata nel cuore della Grande Depressione (1935), non tutto è fermo. Chi fornisce software as a service, o Saas (su misura), sta spesso assumendo, come ad esempio LiveOps, che vende un Saas in grado di sostituire le tradizionali attività di call center. «È una situazione un pò surreale, perché stiamo crescendo bene e investendo mentre il resto del mondo sembra scioglersi», ha dichiarato nei giorni scorsi l'amministratore delegato Maynard Webb al Mercury News, il quotidiano di San José. Altre aziende locali stanno assumendo. E i salari dei top people non stanno scendendo.

Le cifre sulla perdita di posti di lavoro negli Stati Uniti e in Europa, già evvenuti e previsti, sono impressionanti e direttamente legate al crollo del Pil. Ma da un lato le prospettive di disoccupazione non superano ancora punte già toccate in passato, dall'altro non tutto è fermo. E soprattutto, come ricorda un recentissimo studio di McKinsey, «i diversi settori si comportano in modo diverso». Le esperienze passate indicano la strada.

Sanità ed energia

Chi lavora nella sanità, compresa progettazione, costruzione vendita e manutenzione di apparecchiature sanitarie, ha poco da temere. Nel caso americano la spesa sanitaria è aumentata nelle crisi precedenti, rispetto all'aumento medio di spesa delle famiglie nell'intero periodo 84-2006, del '90-91 e del 2001-2002, del 29 per cento in più. (si veda grafico). Ugualmente positive le previsioni per l'energia, soprattutto rinnovabile, ma non solo.

Alimentari

Anche qui spesa in aumento durante le crisi. Notizie di questa settimana dall'Europa lo confermano. La catena low cost inglese Asda, che fa capo a Wal Mart, apre nuovi centri vendita e assume 7mila persone. Non getta la spugna la francese Carrefour, che rimpiazza il turnover. Si spende drasticamente meno per il ristorante, ma di più per il vitto in casa.

Scuola

Balzano le spese per l'educazione. I programmi pubblici hanno un ruolo in questo, ma anche la spesa privata va alla ricerca di knowhow.

Editoria e tv

Buone notizia per libri, giornali e riviste. Lo svago riflessivo e a buon mercato fa valere il suo fascino discreto. La spesa media è aumentata del 53% in più rispetto alla media di tutte le spese, come spiegato sopra a proposito della sanità. L'entertainment, turismo compreso, regge. L'inglese BSkyB, rete tv dell'impero Murdoch, ha appena annunciato mille assunzioni in Gran Bretagna, vista la buona campagna abbonamenti. Altre notizie che definire buone sarebbe eccessivo, ma incoraggianti sì, sono venute in questi giorni da Francia, Germania e altri Paesi europei.

Abbigliamento

Persino un settore in genere perdente nelle crisi, come l'abbigliamento, ha qualche spunto positivo, con la svedese H&M che ha annunciato 7mila assunzioni.

La psiche collettiva si è fermata forse troppo su esperienze passate, come il crollo dei salari durante la Grande Depressione, quando negli Stati Uniti il taglio medio degli stipendi fu del 18% tra il '29 e il '33, con una punta del 58% per le female clerical workers, in pratica le segretarie. In Europa, Italia prima e Germania poi, in molti si mettevano una divisa che assicurava un pane, e sognavano conquiste africane, fuori tempo massimo.

Ma ci si dimentica l'altro aspetto, e cioè che i periodi di crisi sono stati di grande innovazione. Non solo tecnologica, con i grandi passi avanti fatti negli anni '30 da motori, aerodinamica, chimica, trasmissioni. Ma anche nella storia delle imprese. Sedici delle 30 società che formano l'indice Dow Jones industriale sono nate in anni di crisi, dalla Generale Electric durante il panico del 1873 alla stessa Microsoft nel non certo brillante 1975.

«Una notevole parte delle nostre attività economiche dipende più da un istintivo ottimismo che da aspettative matematiche», più «da una spontanea urgenza ad agire contrapposta a un non agire» che non da valutazioni complesse, rifletteva Keynes nel bel mezzo della Depressione.

Frastornati dalle tante voci di sventura, anche sulle sorti dell'euro, gli europei potrebbero fra l'altro trarre un po' di conforto da quanto scriveva nei giorni scorsi (il Sole 24 Ore online ne ha già dato conto) l'autorevole storico dell'economia e delle monete Barry Eichengreen, dalla lontana Baia di San Francisco. L'Europa non è poi così malmessa, osserva Eichengreen. E il fatto che gli attacchi della crisi siano ormai simmetrici, tocchino cioè tutti i Paesi, aiuta a una risposta convergente, e aiuta la tenuta dell'euro. «L'euro non è stato un errore». Il 2008 che ha colpito vari Paesi Uem in modo diverso ha visto preoccupazioni per la moneta unica. Il 2009 potrà far valere tutta l'importanza e la forza dell'euro, se Bce e classe politica agiranno senza timidità e paure».

Il Sole 24 Ore

UBS quarto trimestre: perdita 5,3 miliardi di euro

2009-02-10T03:28:00.000-08:00

UBS riporta una perdita per il quarto trimestre pari a CHF 8,1 miliardi e ha annunciato oggi modifiche organizzative

Risultati UBS

UBS riporta una perdita per il quarto trimestre pari a CHF 8,1 miliardi; escludendo alcuni elementi significativi i risultati operativi netti rettificati (al lordo delle imposte) evidenziano un saldo negativo di CHF 2,8 miliardi Coefficiente di capitale Tier 1 pari all'11,5% a fine 2008

Preparare UBS per le nuove condizioni di mercato

UBS ha annunciato oggi modifiche organizzative per adeguarsi alle nuove condizioni di mercato e ai cambiamenti in atto nel settore.

UBS

Il portafoglio dello Zio Sam

2009-02-09T08:04:00.000-08:00

Nella tabella qui sotto sono riportate le spese e le disponibilità del governo USA rispetto al salvataggio del sistema finanziario.

Portofolio.com

Le automobili abbadonate a Dubai

2009-02-06T05:56:00.000-08:00

Sempre più expatriates fuggono da Dubai abbandonando le loro auto di lusso per evitare la prigione a seguito del mancato pagamento dei debiti contratti per l'acquisto dell'auto.

Two tales of a city — and Dubai’s luxury car giveaway

La lista completa dei clienti di Bernie Madoff

2009-02-05T05:37:00.000-08:00

Bernie Madoff's Clients: The List

Publish at Scribd or explore others: Wills and Trusts Business & Legal culture job

Soldi pubblici e compensi: il piano Obama

2009-02-05T05:14:00.000-08:00

The WSJ reported that, as predicted on this Blog, the Obama Administration would quickly come down with tougher rules on executive compensation in the aftermath of President Obama describing bonuses by companies participating in the bailout as "shameful." The most severe restrictions will apply only to companies receiving "exceptional assistance." As the article reports:

Under the new rules, companies that receive "exceptional assistance" from taxpayers may not pay any top executive more than $500,000 a year, an administration official said. Any additional compensation would have to be in restricted stock that will not vest until taxpayers have been repaid, the official said.

Treasury's description of the restrictions is here. The provision walks a delicate line. On the one hand, the public needs to be appeased by restricting the compensation practices of companies taking public money. On the other hand, harsh limits will discourage financial institutions from participating in TARP and slow down the financial recovery. At least 50 banks have declined to participate and some financial institutions are talking about paying back their TARP funds as quickly as possible in order to get out from underneath the tougher government scrutiny.

In walking this line, Treasury is adopting harsh restrictions but applying them in a sparse manner. The restrictions limit corporate officials (including the CEO) to $500,000 a year, although they permit some extra compensation in the form of restricted stock (apparently without limit). They apply only to companies accepting "exceptional assistance." The term is currently undefined. The WSJ suggests that the term will apply to bailouts of the magnitude of AIG. That one involved somewhere around $85 billion. In other words, the restrictions will only apply to the most massive of the buyouts. When all is said and done, the number of financial institutions subject to the severe restrictions will probably amount to no more than the fingers on a single hand.

Most interestingly, the Administration will also require that companies accepting exceptional assistance institute "say on pay," an advisory vote for shareholders on compensation practices. Similarly, other financial institutions taking bailout funds may avoid the $500,000 cap on executive compensation if they provide the same advisory vote. As Treasury has indicated: "Companies that participate in generally available capital access programs may waive the $500,000 plus restricted stock rule only by disclosure of their compensation and, if requested, a non-binding “say on pay” shareholder resolution."

First, President Obama is on record favoring legislation that would mandate say on pay for all public companies, not just those participating in the bailout. Thus, it is at least possible that this effort represents a retreat. After all, it will apply say on pay to only a limited class of companies and the restrictions will expire once the bailout money is paid back.

Second, though, it will provide many companies with experience with say on pay. In truth, say on pay gives little authority to shareholders but it does require management to make its case for compensation in a very public way. Say on pay may prove less painful to companies and may benefit them by taking away some of the shareholder animosity towards compensation practices. The experience may weaken the issuer opposition to implementation of say on pay in a broader way.

All of these reforms are stop gaps. They do not address the systemic problems that cut across all industries, not just those in the financial markets. The White House and Treasury have announced a Conference on Long-Term Executive Pay Reform that will seek guidance on "model executive pay initiatives in the cause of establishing best practices and guidelines on executive compensation arrangements for financial institutions." In the end, it is this conference that holds out the prospect of something more systematic and more permanent.

The Race to the Bottom

Abercrombie & Fitch

2009-02-05T05:08:00.000-08:00

A&F ce la farà a sopravvivere? La strategia di non abbassare i prezzi pagherà?

Analyst downgrades Abercrombie & Fitch

Markopolos non le manda a dire

2009-02-04T23:59:00.000-08:00

Harry Markopolos, a former investment manager who tried to warn U.S. regulators about Bernard Madoff, joined lawmakers in blasting the Securities and Exchange Commission but said he was forwarding more tips to the agency.

Markopolos told a congressional hearing on Wednesday that SEC staff were neither willing nor able to uncover what Madoff, arrested in December and charged with a record-shattering $50-billion fraud, was really doing.

Calling SEC staff "too slow, too young and too undereducated," Markopolos said the regulator was hindered by lawyers, did not understand red flags, could not do the math and was captive to the financial industry.

"They looked at the size of Madoff and said he's a big firm and we don't attack big firms," said Markopolos, who became aware of Madoff when the firm he worked for tried to pursue the same kind of strategy Madoff did but never got the same steady, strong returns.

Members of the House Financial Services subcommittee hailed Markopolos but excoriated five SEC officials who declined to answer specific questions about the Madoff case, citing ongoing investigations.

"You couldn't find your backside with two hands if the lights were on... You have totally and thoroughly failed in your mission," said New York Democratic Rep. Gary Ackerman,

Markopolos said he knows the names of a dozen so-called feeder funds that helped Madoff raise money from pension funds and wealthy investors and that he would turn these over to regulators this week.

Markopolos, now a fraud investigator, said Madoff could not have acted alone, citing accountants and people helping convey money to his scheme. Madoff was arrested after his sons went to authorities saying their father had confessed to them.

LOW POINT FOR THE SEC

Madoff, a former chairman of the Nasdaq stock market, has been accused of running a massive Ponzi scheme in which he paid off earlier investors with money from later investors.

Asked if there were other Madoffs waiting to be discovered, Markopolos said he was forwarding information to the SEC about a Ponzi scheme of around $1 billion.

For the SEC, Wednesday's testimony marked what some insiders called the worst day in the agency's history, further tarnishing its reputation and sending morale to a new low.

Lawmakers angrily questioned the SEC's head of enforcement, Linda Chatman Thomsen; the agency's top examiner Lori Richards; Erik Sirri, the SEC's trading and markets chief; Andrew Donohue, who is in charge of investment management and the SEC's acting general counsel, Andrew Vollmer.

Capital markets subcommittee chairman, Paul Kanjorski, a Democrat from Pennsylvania, threatened to reform the SEC out of existence.

And Ackerman, who personally escorted Markopolos out of the hearing room, told the SEC officials: "We thought the enemy was Mr. Madoff, I think it was you. You were the shield,"

Markopolos described his failed efforts to get regulators to probe Madoff from 2000 on. "I gift-wrapped and delivered the largest Ponzi scheme to them," he told the lawmakers.

Markopolos became suspicious of Madoff's ways in 1996 after he and a friend pored over mathematical models that might recreate Madoff's returns only to determine that there was no way Madoff could consistently outperform the markets.

HARSH WORDS

Harsh words were lobbed at former SEC employees including Meaghan Cheung, the agency's New York branch chief whom Markopolos contacted in 2005. Cheung, Markopolos said, was arrogant, never grasped the concepts in his report or asked him any questions. Cheung left the SEC in fall of 2008.

The SEC division heads told the panel that the agency was considering a number of changes in light of the Madoff case, including how frequently investment advisers are examined.

Thomsen, who appeared visibly shaken during the hearing, responded to charges that her enforcement division had too many lawyers. "Within enforcement we have lots of accountants, lots of market specialists and investigators."

Republican Rep. Spencer Bachus, of Alabama, was the only lawmaker who praised the agency. "We don't mean to convey that there hasn't been good work by the SEC," he said at the end of the hearing.

Kanjorski said he was going to introduce legislation that would give the Public Company Accounting Oversight Board, the authority to examine the auditors of broker-dealers.

Madoff's auditor was a small, unknown firm that was not registered with the PCAOB.

Reuters.com

Che vento tira all'Est?

2009-02-04T23:49:00.000-08:00

Eastern Europe tops the list of emerging market regions susceptible to a full-blown financial crisis. Unlike emerging markets elsewhere, Eastern European economies are heavily dependent on external financing and current account deficits have been the norm. So, the sharp drop-off in capital inflows - expected in 2009 - will not only be a major blow to growth, but it could also potentially trigger a regional financial crisis. The Baltics, Bulgaria, Romania and Hungary stand out as particularly vulnerable but a crisis in one country could trigger a regional domino effect.

The strong foreign banking presence in the region, long hailed as a strength, now increasingly looks like a potential weakness. Depending on the country, foreign banks hold about 60-90% market share. These foreign parent banks, under pressure from the global financial crisis and slowdowns in their home countries, are reducing lending to their Eastern European offspring. In an extreme (albeit unlikely) scenario, there is the risk that foreign parent banks, in the face of rising defaults and prohibitively expensive refinancing, would pull out of these markets.

In recent months, the IMF has agreed to dole out more than $18 billion in emergency loans to Hungary and Latvia. Since most economies in the region have similar vulnerabilities, the question is: Who could be next?

Estonia and Lithuania look to be headed down the same path as Latvia and may also be forced to turn to the IMF for help. All three boomed in recent years, at times posting double-digit growth rates, helped by cheap credit and strong capital inflows in conjunction with their EU membership in 2004. While Latvia is in the worst shape of the three due to a wider current-account deficit (the region’s largest in 2007 at almost 24% of GDP) and higher external debt, the other two Baltics are in similar straits. Like Latvia, they have double-digit current-account deficits, which make them especially vulnerable to the drop-off in capital inflows. Whereas these current account gaps were once funded primarily with FDI, this is changing, as evidenced by the buildup of external debt.

Bulgaria’s key vulnerability is its massive current-account deficit, which Moody’s expects to widen to around 23% of GDP in 2009, making it the region’s highest – and like others in the region is increasingly debt financed. Bulgaria’s external debt-to-GDP ratio is particularly high, above 100%. Like Estonia and Lithuania, Bulgaria runs a currency board, which the government staunchly supports. One strength - the government runs one of the biggest budget surpluses in Europe (projected at 7.5% of GDP in 2009) - a distinct contrast from fiscal deficits elsewhere in the region. And unlike the Baltics, Bulgaria is still expected to post positive growth in 2009 of around 2%, although its vulnerabilities pose substantial downside risk.

Once high-flying, Romania is poised to slow sharply to around 2% in 2009, but simmering vulnerabilities pose significant downside risks and an outright financial crisis cannot be ruled out. In recent months, S&P and Fitch cut its sovereign credit ratings to ‘junk’ status. On top of its double-digit current-account deficit (the 5th highest in the region), the country’s budget deficit is ballooning and is forecast to breach the 3% Maastricht Treaty limit in 2009. While external debt –about 60% of GDP in 2008 - is still moderate compared to Bulgaria and the Baltics, FDI coverage has been on a steady decline, meaning external debt will likely continue to rise rapidly. Unlike Bulgaria and the Baltics, Romania has a flexible exchange rate, but it’s unlikely to be a significant cushioning tool since it like most other CEE countries, has a high degree of foreign currency lending. Any significant depreciation of the leu would result in the insolvency of a great number of Romanian households and businesses, potentially posing a risk to financial stability.

Hungary secured a $25.5 billion loan package from the IMF, EU and World Bank in October 2008 to avert crisis. While the package may have alleviated external financing risks in the near-term, Hungary still has a long list of underlying vulnerabilities (examined in detail in an RGE post in October), which means the country could still be susceptible to crisis down the road. Hungary continues to suffer from twin deficits and high foreign currency lending, which could affect financial stability and constrain monetary policy. Unusual for the region, Hungary has a high government debt to GDP ratio of an estimated 73% - far and away the highest in the region. Long a regional growth laggard, GDP may contract 3% in 2009.

Despite a strong banking system and a prudent fiscal target for 2009, Serbia's vulnerabilities are growing. The current-account deficit, at an eye-catching 18% of GDP in 2008 is among the highest in the region while the currency has declined 20% since October 2008 despite repeated central bank interventions. As a precautionary measure, Serbia reached a $520 million standby agreement with the IMF in November 2008 which it is hoped will help stave off crisis in the face of the sharp re-adjustment.

Also worrying are the vulnerabilities in Serbia's western neighbor - Croatia. The large external debt (at around 90% of GDP), current account deficit (around 10% of GDP), and short-term financing needs of the government and corporate sector are key challenges given the tighter global financing conditions. To bolster investors’ confidence, Croatia’s government may also seek a precautionary program from the IMF.

While Turkey is headed towards an economic contraction, an outright financial crisis should be averted. Turkey is close to signing a deal with the IMF, which will reassure foreign investors and rein in government spending. The IMF package is expected to be in the range of $20-25 billion, although there is some concern at the fact that an agreement has not yet been announced. While Turkey’s banking sector is in much better shape following the 2001 crisis, its current account deficit (forecast at about 5% of GDP in 2008) and heavy external financing requirements make it vulnerable to tightening global credit conditions. According to S&P, Turkey’s external financing requirement stands at around 140% - one of the higher ratios among emerging markets.

Oil exporters like Russia, Kazakhstan and several GCC countries are now facing a reversal in their fiscal and current account balances which are shifting into deficit territory. Ample savings from the oil boom will now be drawn down to support growth and in many cases help the corporate and financial sectors pay off their large foreign debts accrued during the boom years. For GCC countries, the real vulnerability is their contingent liabilities, accrued through support of the financial system. Dubai corporates have been particularly hard hit by the credit crunch and their exposure to the domestic property markets.

Of the GCC countries, the UAE has the highest short-term debt relative to forex reserves which leaves it highly vulnerable. Its short-term external debt as a share of total external debt is expected to rise to 72.5% in 2009. Other vulnerability indicators put it among the worst in the Middle-East and well above the average of developed economies. It will likely call on its savings in 2009 to finance its spending as its current account also shifts into a deficit – Look for Abu Dhabi to support Dubai. Kuwait too is vulnerable, with its banks struggling to find new sources of finance in the face of defaults and Kuwaiti corporates facing investment losses. Kuwaiti financial institutions have already suffered some defaults, and further ratings downgrades are possible. Kuwaiti political divergence could also increase the difficulty of responding to the crisis. By contrast, Saudi Arabia may be least vulnerable given its ample reserves, conservative investment strategy and well-capitalized banking sector.

While Russia is unlikely to default on its sovereign debt, its corporate and financial sector debts now outstrip its stock of foreign exchange reserves ($386 bn in mid-January 2008). Although 2008 refinancing was accomplished, more than $110 bn in foreign debt will come due in 2009 and the depreciation of the rouble raises the risk of a cascade of non-payments. Russia’s economic indicators have quickly reversed along with oil prices and the country is likely to run its first 'twin deficit' in a decade in the midst of a sharp economic contraction in 2009. The fall in the value of the rouble, lack of finance, and the plunge in consumption (jobs are being shed at a faster pace than during the 1998 financial crisis) are also causing imports to contract which may limit the deterioration of the current account. Yet, the rapid depletion of reserves and use of the assets in its wealth and reserve funds to finance its fiscal deficit (a deficit of as much as 10% of GDP is possible in 2009) may trigger further ratings downgrades. All of this is likely to weigh on the rouble which has crashed through the new trading band.

Like Russia, Kazakhstan saved the bulk of its oil windfall, but Kazakh banks and companies borrowed heavily and have now turned to the government for funds. Kazakhstan will thus be left with little cushion if commodity prices continue to be weak through 2009-10. Further capital flight is possible if oil prices remain at current levels - uncertainty about the value of the tenge, which is likely to be devalued, could trigger a speculative attack putting pressure on the fragile banking system that is struggling to meet or roll over the foreign debts due for repayment in 2009. Kazakhstan was one of few oil exporters to run a current account deficit routinely during the boom years, and this deficit will widen in 2009.

Ukraine will see the sharpest slowdown in Eastern Europe in 2009 with a growth contraction of at least 6%. Its terms of trade is set to deteriorate further due to weak external demand and prices for key exports, especially metals. With steel exports falling along with the slowdown in FDI inflows, balancing the current account will be a major challenge in 2009. Yields on Ukraine’s $105.4 bn of government and corporate debt are amongst the highest for any country with dollar-denominated debt. If the hryvnia-dollar exchange rate widens further, mass loan defaults are expected. The latest gas accord with Russia increases Ukraine’s spending on gas by almost 7% at a time when Ukraine’s economy is surviving on the first installment of the IMFs $16.4 bn bailout. The IMF fiscal conditions are likely to rein in social expenditure including likely public sector wage arrears in 2009, deepening the Ukraine’s political divisions.

Similarly, Belarus received a $2.5 bn IMF credit line as adverse terms of trade, falling demand for its exports and lack of external financing led to a sharp decline in the country's forex reserves. To stop the reserves outflow and increase competitiveness, the Central bank devalued the Belarusian rouble by 20%, one of the IMF’s requirements.

RGE Monitor.com

Aumenti capitale EU nel 2009: previste emissioni per 300 miliardi

2009-02-04T05:03:00.000-08:00

Funds raised in European equity issues could reach as much as €300bn ($386bn) in 2009 as companies attempt to shore up their balance sheets, say bankers and analysts. The sharp increase in issues so far this year is likely to accelerate, with funds raised in 2009 expected to reach their highest level since 2001. Goldman Sachs predicts that, outside of financials, companies will try to raise €100bn to €300bn in 2009. Industries making cash calls are likely to include real estate, construction, utilities, and metals and mining. Goldman estimated that net debt to equity for European companies was 54%, compared with an average of 48% since 1988. The scale of the potential cash calls has raised concerns about the market’s capacity to absorb all the new equity issued.

FT.com/alphaville

I numeri del salvataggio made in UK

2009-02-04T00:41:00.000-08:00

Here's a jaw-dropping measure of the failure of the banking system over the past nine months.

Through just one funding initiative, the Bank of England's Special Liquidity Scheme, taxpayers have pumped a staggering £185bn into 32 British banks and building societies - according to figures released a few minutes ago.

The Bank of England has provided this £185bn in the form of Treasury Bills - which are short-dated government bonds that can easily be turned into cash. And in return it has received £287bn of collateral from the banks, in the form of loans made by those banks.

All of those loans received from the banks have been securitised or turned into tradable securities. And most of them are residential mortgages converted into mortgage-backed securities.

So the best way of seeing all this is as a three-year loan of £185bn to the banks, made by all of us as taxpayers, for which we've received £287bn of assets.

And, what's more, we've received a fee of 1.15% for our trouble.

For British taxpayers, that doesn't look such a terrible deal. The risk of loss to us, given that we've lent £102bn less than the face value of the collateral we've been given, looks pretty small.
But it shows you quite how serious it was that the commercial market for mortgage-backed securities had collapsed and quite how desperate the banks were to raise cash.

The banks were prepared to pay through the nose for our money, because without taxpayers' financial support they would have collapsed.

Here's another number that gives me the willies.

The Bank of England says that as at 30 January 2009 it values the £287bn of collateral at £242bn.

That implies that the value of these mortgage-backed securities has fallen by £45bn or nearly 16%.

Or to put it another way, the Bank of England calculates that our banks and building societies have lost £45bn on just these mortgages and loans.

Which is a scarily big number - and may explain why the Governor of the Bank of England has consistently refused to rule out the possibility that some of our biggest banks may yet have to be fully nationalised (though the Treasury's new scheme to insure the banks against some of these losses may prevent nationalisation).

Peston's Pick

Markopolos / Madoff / House Financial Services Committee

2009-02-04T00:34:00.000-08:00

Oggi Harry Markopolos darà la sua versione dei fatti.

Qui potete trovare lo scritto preparato da Markopolos per lo House Financial Services Committee.

Si tratta di un vero e proprio j'accuse nei confronti della SEC, che per ben 9 anni ha sistematicamente ignorato Markopolos e i segnali d'allarme lanciato dallo stesso a proposito di Madoff.

Intervista di Mario Draghi al Wall Street Journal

2009-02-04T00:17:00.000-08:00

Restoring confidence with more transparency

WSJ: Are there any signs markets are stabilizing or improving and if so, how much should we read into it?

Mr. Draghi: There are markets that have started to function again, though at a reduced level. Spreads on the interbank market have narrowed considerably, and the corporate-bond market has shown signs of being alive. There has been a flurry of new issuances in the first few weeks of January. We will get little bits of good news and we can enjoy them. But we shouldn't make too much out of it.

WSJ: What is the priority for regulators at the moment?

Mr. Draghi: Credit circuits have been clogged now for more than a year...The very first thing to do is restore confidence in the banking sector, because it's clear that until that is done there will be no significant flow of private capital to the banking sector.

WSJ: How do you restore that confidence when the market has become so skeptical and skittish?

Mr. Draghi: The only thing we can do to help restart the market is to tell the world that there are certain kinds of real products that are simple to understand, easy to price and satisfy certain legal conditions.

WSJ: How do you do that beyond emergency measures and into the medium and long term?

Mr. Draghi: There needs to be significant progress in developing greater transparency so we can understand what's on banks' balance sheets and what valuations are.

WSJ: More specifically?

Mr. Draghi: In the future, there is going to be an unavoidable move toward standardization... With standardization, regardless of whether you have regulation, you will have a powerful push toward transparency, because people would understand and price products with full knowledge of them. It is also of primary importance that we create a centralized clearing and settlement process.

WSJ: Aren't you afraid that the push for more regulation will put a brake on financial innovation?

Mr. Draghi: We want to create a system which doesn't destroy the prospectives of the banking industry. Standardization may well hamper growth of financial innovation, but this growth will be more sustainable through time.

WSJ: All things considered, what do you think the banking landscape will look like in the future?

Mr. Draghi: What we want is a financial industry, and banking sector especially, where you have more capital, less debt, more rules and much stronger supervision. You can have that only if there is a level playing field and broad endorsement by political leaders. It has to be done in a way that you keep the market alive. That's the art of doing it.

WSJ: You talk about engaging political leaders. The G-20 is looking at a variety of changes to the global financial regulatory system. What do you hope will come out
of it?

Mr. Draghi: I am confident that this group will not only endorse a global response but also contribute to shaping it.

WSJ: Is there a sense that we could see political leaders make a coordinated statement about their goals— for instance, increasing transparency—and then leave it to each nation's discretion on how to implement the shared goal?

Mr. Draghi: Yes. I think that is exactly the process. There is a great need for political endorsement at the global level. Then implementation is going to be,
unavoidably, national. There is a shared sense that one of the great benefits for the financial-services industry was that over the last, say, 20 years, it has became
global. Nobody denies this benefit now. We will lose all this if we become protectionist again by taking up initiatives purely at a national level.

WSJ: If you achieve all these goals, is the end result a world in which crises become less likely?

Mr. Draghi: No. I think crises are part and parcel of the market functioning. Our aim is to make sure you don't amplify normal market oscillations, either by regulation or by individual behavior. That's the ideal regulatory action plan.

Banca d'Italia

Irlanda peggior debitore

2009-02-02T06:56:00.001-08:00

According to CMA DataVision, Ireland CDS (265) are trading well above Greece (250), the previous riskiest name in Euroland.

Alea

EU’s McCreevy: Complexity Is at Heart of Crisis

2009-02-02T06:41:00.000-08:00

Charlie McCreevy, European Commissioner for the Internal Market and Services, spoke with The Wall Street Journal about how the European and global regulatory landscape needs to change in order to prevent a repeat of the current crisis. Here are edited excerpts from the conversation.

WSJ: The talk at Davos is all about how to reform the financial system to prevent the next blowup. Where do you stand?

CM: I’ve always believed the best result will come out, economically and in terms of wealth creation, from open markets. But we need to have appropriate regulation alongside that. Getting the balance right is the trick.

WSJ: Did we get the balance wrong?

CM: It’s hard to know. In my view, there’ll be multiple reasons as to the cause of the financial crisis [when we look back], of which regulation perhaps in certain ways will play a role. But it won’t be the only reason. In fact, it’ll be only one of, say, 25 other reasons.

WSJ: Can you think of one particular mistake we need to correct now?

CM: Complexity is at the heart of it. It’s very obvious that the top management of financial institutions didn’t understand the products they were taking on or selling. The investors who were buying them certainly didn’t understand them. It’s obvious the directors didn’t understand them either. And I don’t believe, myself, that the regulators were in a position to understand them either.

WSJ: You’ve been advocating an overhaul of European banking supervision for banks that operate across borders. European Central Bank president Jean-Claude Trichet has indicated recently the ECB might be best-placed to supervise those cross-border banks.

CM: That is a separate debate. I think we should try to agree just how we will supervise those institutions that operate across member states, then secondly deal with the location. I’m easy about that. I’m neither for nor against.

WSJ: After U.K. bank Northern Rock suffered a run and was nationalized last year, you said if a similar thing had happened with a big bank that operates across borders in the euro zone, it would have been “chaos” to coordinate an emergency response. Then we had the weekend rescue of Fortis NV, which operated in Belgium, the Netherlands and Luxembourg. Was it chaos?

CM: Fortis is a very good example. You could not get a closer group [of countries], proximity-wise, with good understanding between them, and all three were founding members of the European Union. And it’s not a secret that it was a very, very troublesome negotiation. I think it proves the case.

WSJ: The idea that there might be supervisory “colleges,” comprised of supervisors from different countries that would supervise cross-border banks has taken off internationally. Do you think it has legs?

CM: I imagine it’ll have to be something like that. I’d be somewhat taken aback if, as a result of this international financial crisis that when the leaders of the G-20 meet, they don’t advance global cooperation in some of these areas. It’d be somewhat illogical if they don’t do so.

WSJ: The Basel II capital standards are one example of where you might say global cooperation in financial regulation hasn’t worked all that well. They’re coming under increased fire from all parts of the globe.

CM: We should go back to a cruder measurement of the adequacy of capital. Simple, direct routes may be the way forward. But I also say that policy makers should not be afraid to stand back — no matter how august a body has come up with ideas — to say, well, that mightn’t be the way [for us]. Whatever Basel comes up with, then I think the people that put that into effect — say, congresspeople in America, or legislators here in Europe — should be prepared to say well, ok, that’s what they came up with. But we can approach it somewhat differently.

WSJ: The ECB is reluctant to take the kind of steps the U.S. Federal Reserve has taken, of buying assets directly. If they were to decide to buy euro-zone government debt, would there be a competition issue? There are after all 16 euro-zone members.

CM: Well, there may be. But there hasn’t been a government that’s made changes in this area [during the crisis] that hasn’t raised some type of state-aid issue. And the Commission has been pretty flexible, dealing with these particular measures, because we’ve had to be. Now, would some of those issues arise if the ECB did that? Possibly. We’ll have to wait and see what Mr. Trichet and his board decide to do.

Real Time Economics

Il prezzo è giusto?

2009-02-02T06:38:00.000-08:00

«As the Obama administration prepares its strategy to rescue the nation’s banks by buying or guaranteeing troubled assets on their books, it confronts one central problem: How should they be valued?

Not just billions, but hundreds of billions of taxpayer dollars are at stake.

The Treasury secretary, Timothy F. Geithner, is expected to announce details of the new plan within weeks. Administration and Congressional officials say it will give the government flexibility to buy some bad assets and guarantee others in an effort to have a broad impact but still tailor the aid for different institutions.

But getting this right will not be easy. The wild variations on the value of many bad bank assets can be seen by looking at one mortgage-backed bond recently analyzed by a division of Standard & Poor’s, the credit rating agency.

The financial institution that owns the bond calculates the value at 97 cents on the dollar, or a mere 3 percent loss. But S.& P. estimates it is worth 87 cents, based on the current loan-default rate, and could be worth 53 cents under a bleaker situation that contemplates a doubling of defaults. But even that might be optimistic, because the bond traded recently for just 38 cents on the dollar, reflecting the even gloomier outlook of investors.

The bond analyzed by S.& P. is just one of thousands that the government might buy or guarantee should it go forward with setting up a “bad bank” that would acquire $1 trillion or more of toxic assets from banks.

The idea is that, free from the burden of carrying these bad assets, banks would start lending again and bolster the faltering economy. The bad bank set up by the government would, over time, sell the assets and recover some or most of what it had paid.

While the government is considering several approaches to helping the banks, including more capital injections, buying or insuring toxic assets is likely to be a centerpiece. Determining the right price for these assets is crucial to success. Placing too low a value would force institutions selling and others holding similar investments to register crushing losses that could deplete their capital and make it harder for them to increase lending.

But inflated values would bail out the companies, their shareholders and executives at the expense of taxpayers, who would swallow the losses if the government could not recoup what it had paid.

Some critics of the plan warn that the government should not buy the assets, because banks will try to get too high a price and leave taxpayers holding the bag.

“To date, the banks have stuck their heads in the sand,” said Lynn E. Turner, a former chief accountant for the Securities and Exchange Commission, “and demanded that they be paid the price of good apples for bad apples.”

But many believe that, given the depth of the problem and the fact that it keeps getting worse, the government has little choice.

Finance experts from Wall Street and academia are advising the administration on other options. To sidestep the thorny valuation problem, some have suggested that the bad bank acquire only assets that have already been marked down significantly and guarantee other assets, but officials would have just as difficult a task in determining how much to charge for insuring risky assets.

Economists predict that the cost of the program will most likely exceed the $350 billion remaining in the $700 billion Troubled Assets Relief Program that Congress approved in October.

They say the Obama administration may need upwards of $1 trillion in additional aid for banks — on top of the more than $800 billion the administration is seeking in an economic stimulus measure moving through Congress.

Many in Washington question whether the rescue has achieved its goal of stabilizing the financial markets. A report by the General Accountability Office on Friday concluded that whether the bailout program had been effective might never be known.

“While the package helped avoid a financial collapse, many are frustrated by the results — and rightfully so,” President Obama said in his weekly address on Saturday. “Too often taxpayer dollars have been spent without transparency or accountability. Banks have been extended a hand, but homeowners, students, and small businesses that need loans have been left to fend on their own.”

Mr. Obama and many lawmakers have expressed anger that banks that received the first batch of aid money do not appear to have increased their lending significantly, even as some firms have spent billions on bonuses, corporate jets and other perks. In two weeks the House will hold a hearing to ask chief executives of the eight largest banks about their spending controls.

As early as this week, the Treasury Department may impose new limits on the executive pay of companies receiving financial assistance. The Oversight Panel created by Congress to monitor the program is also expected to publish a report this week looking at whether the government paid too much to the large banks that they have provided with assistance.

A frequent refrain in Washington and on Wall Street is that there are no current market prices for toxic securities. But people who buy and sell these investments say that is a simplistic reading of the problem. They say most kinds of securities can be valued and are being traded, but trading has slowed as sellers and buyers disagree about what that the price should be.

The value of these securities is based on the future cash flow they provide to investors. To determine that, traders have to make assumptions about the housing market and the economy: How high will the unemployment rate go in the coming years? How many borrowers will default? What will homes be worth?

The Standard & Poor’s group, Market, Credit and Risk Strategies, which operates independently from the company’s credit ratings business, has been studying troubled securities for investors and banks. The bond that is trading at 38 cents provides a vivid illustration of the dilemma in valuing these assets.

The bond is backed by 9,000 second mortgages used by borrowers who put down little or no money to buy homes. Nearly a quarter of the loans are delinquent, and losses on defaulted mortgages are averaging 40 percent. The security once had a top rating, triple-A.

Michael G. Thompson, a managing director at the S.& P. group, says his computer models can easily calculate what the bond is worth under different situations. “This is not rocket science, this is straight bond math,” he said. But determining what the future holds is much harder. “We are not masters of the universe who can predict the macroeconomic environment,” he added

Some would-be buyers of these assets fear that a deep recession could drive up default rates and push down home prices much further. They also worry that a cataclysm like the failure of a big bank could send prices tumbling again, just as the collapse of Lehman Brothers did in September. Others see no reason to bid up prices because those who need to sell are desperate.

Big banks and other owners of mortgage investments have argued that the low market prices reflect fire sales. Many have classified such securities as level-three assets, for which accounting rules allow them to determine values using computer models rather than the marketplace. Mr. Thompson estimates that at the end of September financial firms had $600 billion in such hard-to-value assets.

But critics like Mr. Turner say that the banks’ accounting for these assets cannot be trusted because they have an incentive to use optimistic assumptions.

In some instances, the government has guaranteed losses on certain assets for big, systemically important companies like Citigroup and Bank of America.

Policy makers have found such arrangements appealing because they do not require upfront payments and they can be customized for each bank, Douglas J. Elliott, a fellow at the Brookings Institution, wrote in a recent paper.

Still, government guarantees need to be based on sound valuations, Mr. Elliott and others say. If the government underestimates the risks of default, taxpayers could eventually lose tens of billions of dollars. The cost of insuring such assets in the private market is often several times greater than the price the government is charging banks.

Whatever approach the Obama administration takes, investors and policy makers say it should provide more and clearer information about the health of banks and the risks that the government is taking.

Many analysts do not trust what they are told about the quality of the securities and loans held by banks and other financial firms. Most banks provide only a very general description of their holdings, because they consider the information privileged.

But the government, using its power as a big investor, could compel the banks to divulge more specific data, without giving away the names of individual bonds or loans, analysts said. The market could then do its own analysis on what the assets are worth.

“At least it would give the government one objective measure of the value of these assets,” said Anthony Lembke, co-head of investments at MKP Capital Management, a hedge fund firm that is a big investor in mortgages. “In the absence of transparency and clarity, investors are going to assume a value that will be conservative and then add a risk premium”».

Risks Are Vast in Revaluation of Assets

I costi delle carte di credito

2009-01-30T06:11:00.000-08:00

Se siete curiosi di sapere quanto incassano per ogni transazione le società che forniscono carte di credito fate un salto su questo sito: The True Cost of Credit.

Ecco alcuni esempi con la mia carta VISA:

A pack of gum at a convenience store: $1.50
Credit Card Fees: $0.37 (25.0%)
Percent: 1.541% Per-Item: $0.35

Jill's Sandwich Shop: $7.00
Credit Card Fees: $0.36 (5.2%)
Percent: 1.656% Per-Item: $0.24

SuperCheese Pizza Delivery: $25.00
Credit Card Fees: $0.84 (3.4%)
Percent: 1.873% Per-Item: $0.35

Tank of Gasoline at a fueling station: $30.00
Credit Card Fees: $0.64 (2.1%)
Percent: 1.528% Per-Item: $0.15

Books at Bookseller.com: $50.00
Credit Card Fees: $1.14 (2.3%)
Percent: 1.896% Per-Item: $0.15

Groceries at your local Jewel/Osco: $100.00
Credit Card Fees: $1.52 (1.5%)
Percent: 1.332% Per-Item: $0.10

Electricity Bill over the phone: $150.00
Credit Card Fees: $1.11 (0.7%)
Percent: 0.138% Per-Item: $0.76

Flight to California on BlueSky.com: $300.00
Credit Card Fees: $6.76 (2.3%)
Percent: 2.126% Per-Item: $0.11

Flatscreen TV at Electronics Depot: $800.00
Credit Card Fees: $19.05 (2.4%)
Percent: 2.276% Per-Item: $0.11

Guerre, attentati e mercati finanziari

2009-01-30T06:00:00.000-08:00

Qui di seguito un interessante articolo (di qualche anno fa) in cui sono analizzati gli effetti di eventi straordinari, quali guerre e attentati, sui mercati finanziari.

"The Historical Impact of Crises on Financial Markets

12 September 2001

Amid the horror of the last couple of days, and all the writing and media coverage, we found that the following article provides some useful insight for investors, and have asked permission to reproduce it for our readers.

With the terrorist attacks on the World Trade Center in New York and elsewhere in the United States took place on September 11, 2001, there were immediate concerns about their impact on world financial markets. Although this event is without precedent, by looking at military and political crises of the past, we can hopefully learn what to expect from this horrible event.

The general pattern we have found is that there is initially a flight to safety in financial markets, producing a decline in stock markets and volatility in commodity markets. The impact of the crisis itself is short-term. After a brief period of time, calm returns and markets return to their situation before the crisis. Although financial markets react quickly to all news, they can also process the information and quickly incorporate the news into the market to reflect the long-term impact of these crises on the markets. Financial markets are only impacted if the crisis creates a long-term change in the fundamental nature of the economy.

Let’s see how markets reacted in the past.

World War I

The assassination of Archduke Francis Ferdinand on June 28, 1914 precipitated a series of events that led to Austria-Hungary declaring war on Serbia on July 28 and war throughout Europe within a week. All the world’s financial markets were closed by August 1, 1914. In New York, there was large selling on the New York Stock Exchange in the last days of July 1914 to raise money and return it to Europe. The selling led to the closure of the exchange. The New York Stock Exchange remained closed until it was reopened on December 12, 1914. London’s stock market remained closed until January 1915, and allowed only limited trading during 1915. The Paris Stock exchange reopened in 1915 and the Berlin Stock Exchange reopened in 1917.

Although the New York Stock Exchange itself did not reopen until December, curb trading in New York began in September. The prices of stocks actually hit their lowest point in October of 1914, and by the time the market reopened in December, stocks had returned to the level they had been at before World War I began. The market continued to rise until November 1916. World War I provided an important lesson for financial markets. Closing them does not solve any problems. It is best to let markets digest the information and allow financial prices to reflect the change in circumstances.

Currency market were initially disrupted by the war, with the British Pound rising 20% against the US Dollar as people tried to repatriate money to England, but within a week of the beginning of the war, currency exchange rates returned to their pre-war levels. Bond markets were generally unaffected by the war. Interest rates only began to rise once inflation began to build up later in the war.

This pattern, as we will see, was consistently followed in other crises. Initially, there is a flight to safety, leading to declines in the market and increases in the value of commodities. Once the long-term impact of the crisis is understood, markets return to their conditions before the crisis. Thereafter, markets move up or down as investors perceive that the crisis will be resolved.

World War II

There were several phases to how markets reacted to World War II. There were a series of crises during World War II: the attack of Germany on Poland in September 1939, the attack on France and the collapse of France in May 1940, and the attack on Pearl Harbor on December 7, 1941.

Surprisingly, the New York Stock Market rose when Germany attacked Poland on September 1, 1939, primarily because investors thought the United States would benefit from the demand for goods generated by the war. The market barely moved until the collapse of France in May 1940. The collapse of France and Dunkirk precipitated a 25% decline in the market in May 1940 in a massive sell-off. But again, the market jumped back quickly. The market first bottomed on May 22 and hit its final bottom on June 11, 1940. As the news got worse in the war, markets gradually declined throughout 1941, and when Pearl Harbor was attacked, the market declined around 10% in the next two weeks. The market bottomed in April 1942, and moved up after that for the rest of the war as the war moved in the favor of the Allies.

Unlike World War I, the New York Stock Exchange did not close during World War II. The London Stock Exchange was closed for only one week in September when Germany attacked Poland. The New York Stock Exchange remained open throughout the war. In fact, the NYSE was open on Monday, December 8, the day after the attack on Pearl Harbor. The Stock Exchanges found that people will find a way to trade stocks and other financial assets outside of the exchanges if people cannot trade stocks on open markets. Moreover, the quicker markets are allowed to process news, the quicker markets can adjust to the economic and financial changes that have occurred.

The Gulf War

During the Gulf War, the market followed the pattern shown in World War I and World War II. Stock markets sold off and oil prices rose when Saddam Hussein invaded Kuwait. Oil prices were at $17 a barrel at the end of June 1990, and peaked at $40 on October 9, 1990. The price then proceeded to decline to $20 a barrel by January of 1991, and continued to decline throughout most of the 1990s.

The stock market had been rising prior to Saddam Hussein’s invasion of Kuwait. The market topped out on July 17, 1990 and declined 20% until the market bottomed on October 11, 1990. When the attack on Iraq finally began, the market jumped up, rising almost 20% over the next month. The war was over with in a few days and despite a recession in the United States that followed the Gulf War, the market did not decline and stayed within a trading range for the rest of 1991.

During the Gulf War there was a reduction in airplane travel, which did affect the airline industry. But the long-term impact on stock markets and even oil markets was minimal, even though it was followed by a recession in the United States. In fact, the price of oil continued to decline after the war was over with.

The 1993 World Trade Center Bombing

The World Trade Center was bombed on February 26, 1993. This attack had virtually no impact on the stock market. In fact, the Dow Jones Industrials moved up on that day.

A similar situation occurred in August 1991 when there was an attempted coup in Russia. European markets sold off over 10% within one day, but recovered all of their losses within a week after the coup attempt collapsed. As in other crises, the market quickly recovered and never looked back once it was clear the crisis was over with.

The Terrorist Attack of September 2001

As could be expected, world markets sold off as soon as news of the attack was heard. The London Stock market was down 5%, Germany 8% and Paris 5%. US Stock Markets never opened because the attack occurred before 9:30.

What will be the reaction of financial markets to this crisis?

This event is different from the other crises because it was a direct attack on the financial center of the United States. The World Trade Center houses many of the most important financial firms in the world, including the New York Mercantile Exchange, which physically no longer exists. This raises important concerns because many of the people who operate financial markets in the United States probably died.

But as we have seen, markets bounce back from these crises and bounce back quickly. The reason is that markets are efficient at processing information. They both overreact initially when the crisis occurs, and quickly bounce back once markets have determined the impact of these crises on the economy will be minimal.

The primary way in which this attack could impact financial markets is if it materially impacts the economy. In and of itself, the attack is unlikely to do this. It all depends upon how the government reacts to return the economy and the market to normal in the next few weeks. One fear would be that the attack might lead to greater isolationism in the world economy, but this would be exactly the wrong reaction. Globalization of markets and trade has provided immense benefits over the past decades and in many ways was responsible for the growth in the world economy during the 1990s. If anything, this attack should make provide us with an even greater commitment to free trade to defeat the goals of the terrorists.

Although many people worry that the integration of the world’s stock markets could cause a ripple effect through the world’s markets, and that their integration makes them all vulnerable to attack. The technology that is currently available can also help markets to bounce back. Markets such as Nasdaq and the London Stock Exchange require no physical location. One result of the terrorist attack may be to quicken the move of financial markets into cyberspace. Exchanges with a single location where stocks or commodities can be traded are likely to become rarer in the future. Experience of previous crises shows that people find ways to buy and sell financial assets regardless of whether markets are officially open or not.

To conclude, markets quickly assess the impact of crises. The quicker markets are allowed to digest news, the quicker markets can recover from the crisis. The consistent pattern in past crises is a sell off when the news breaks, a short period of evaluation, and a bounce back in financial markets once investors realize that the crisis, in and of itself, will not have a long-term impact on financial markets.

The key to making sure that this crisis does not impact the rest of the economy and the global economy, and push an already weak global economy into recession is to keep financial markets open and promote international trade".

Dr. Bryan Taylor
Global Financial Data
September 12, 2001

Il debito delle famiglie

2009-01-30T01:06:00.001-08:00

Indebitamento delle famiglie italiane

525 miliardi di euro

Indebitamento finanziario delle famiglie

(in percentuale del reddito disponibile lordo)

Fonte: Banca d'Italia, Istat

Crescita del mercato del credito al consumo in Italia

(dati in percentuale)

Fonte: Osservatorio Assofin

Grafico

L'espresso.it

Honda - 90

2009-01-30T00:38:00.000-08:00

Honda Motor Co. said Friday its fiscal third-quarter profit totaled 20.2 billion yen ($222 million), or 11 yen a share, from 200 billion yen, or 110 yen a share, in the same quarter a year before. Like many of its peers with strong export business, the No. 2 Japanese automaker was hit by a strengthening yen and reduced demand due to the global economic slump. Revenue for the quarter was 2.53 trillion yen compared to 3.04 trillion yen in the year-ago period. Honda also said it had reduced its profit outlook for the full fiscal year ending March 31 to 80 billion yen, which would mark an 87% drop from the previous year's results.

Marketwatch.com

Bonus 2008 a Wall Street: 18,4 miliardi

2009-01-29T10:01:00.000-08:00

«By almost any measure, 2008 was a complete disaster for Wall Street — except, that is, when the bonuses arrived.

Despite crippling losses, multibillion-dollar bailouts and the passing of some of the most prominent names in the business, employees at financial companies in New York, the now-diminished world capital of capital, collected an estimated $18.4 billion in bonuses for the year.

That was the sixth-largest haul on record, according to a report released Wednesday by the New York State comptroller.

While the payouts paled next to the riches of recent years, Wall Street workers still took home about as much as they did in 2004, when the Dow Jones industrial average was flying above 10,000, on its way to a record high.

Some bankers took home millions last year even as their employers lost billions.

The comptroller’s estimate, a closely watched guidepost of the annual December-January bonus season, is based largely on personal income tax collections. It excludes stock option awards that could push the figures even higher.

The state comptroller, Thomas P. DiNapoli, said it was unclear if banks had used taxpayer money for the bonuses, a possibility that strikes corporate governance experts, and indeed many ordinary Americans, as outrageous. He urged the Obama administration to examine the issue closely.

“The issue of transparency is a significant one, and there needs to be an accounting about whether there was any taxpayer money used to pay bonuses or to pay for corporate jets or dividends or anything else,” Mr. DiNapoli said in an interview.

Granted, New York’s bankers and brokers are far poorer than they were in 2006, when record deals, and the record profits they generated, ushered in an era of Wall Street hyperwealth. All told, bonuses fell 44 percent last year, from $32.9 billion in 2007, the largest decline in dollar terms on record.

But the size of that downturn partly reflected the lofty heights to which bonuses had soared during the bull market. At many banks, those payouts were based on profits that turned out to be ephemeral. Throughout the financial industry, years of earnings have vanished in the flames of the credit crisis.

According to Mr. DiNapoli, the brokerage units of New York financial companies lost more than $35 billion in 2008, triple their losses in 2007. The pain is unlikely to end there, and Wall Street is betting that the Obama administration will move swiftly to buy some of banks’ troubled assets to encourage reluctant banks to make loans.

Many corporate governance experts, investors and lawmakers question why financial companies that have accepted taxpayer money paid any bonuses at all. Financial industry executives argue that they need to pay their best workers well in order to keep them, but with many banks cutting jobs, job options are dwindling, even for stars.

Lucian A. Bebchuk, a professor at Harvard Law School and expert on executive compensation, called the 2008 bonus figure “disconcerting.” Bonuses, he said, are meant to reward good performance and retain employees. But Wall Street disbursed billions despite staggering losses and a shrinking job market.

“This was neither the sixth-best year in terms of aggregate profits, nor was it the sixth-most-difficult year in terms of retaining employees,” Professor Bebchuk said.

Echoing Mr. DiNapoli, Professor Bebchuk said he was concerned that banks might be using taxpayer money to subsidize bonuses or dividends to stockholders. “What the government has been trying to do is shore up capital, and any diversion of capital out of banks, whether in the form of dividends or large payments to employees, really undermines what we are trying to do,” he said.

Jesse M. Brill, a lawyer and expert on executive compensation, said government bailout programs like the Troubled Asset Relief Program, or TARP, should be made more transparent.

“We are all flying in the dark,” Mr. Brill said. “Companies can simply say they are trying to do their best to comply with compensation limits without providing any of the details that the public is entitled to.”

Bonuses paid by one troubled Wall Street firm, Merrill Lynch, have come under particular scrutiny during the last week.

Andrew M. Cuomo, the New York attorney general, has issued subpoenas to John A. Thain, Merrill’s former chief executive, and to an executive at Bank of America, which recently acquired Merrill, asking for information about Merrill’s decision to pay $4 billion to $5 billion in bonuses despite new, gaping losses that forced Bank of America to seek a second financial lifeline from Washington.

A Treasury department official said that in the coming weeks, the department would take action to further ensure taxpayer money is not used to pay bonuses.

Even though Wall Street spent billions on bonuses, New York firms squeezed rank-and-file executives harder than many companies in other fields. Outside the financial industry, many corporate executives received fatter bonuses in 2008, even as the economy lost 2.6 million jobs. According to data from Equilar, a compensation research firm, the average performance-based bonuses for top executives, other than the chief executive, at 132 companies with revenues of more than $1 billion increased by 14 percent, to $265,594, in the 2008 fiscal year.

For New York State and New York City, however, the leaner times on Wall Street will hurt, Mr. DiNapoli said.

Mr. DiNapoli said the average Wall Street bonus declined 36.7 percent, to $112,000. That is smaller than the overall 44 percent decline because the money was spread among a smaller pool following thousands of job losses.

The comptroller said the reduction in bonuses would cost New York State nearly $1 billion in income tax revenue and cost New York City $275 million.

On Wall Street, where money is the ultimate measure, some employees apparently feel slighted by their diminished bonuses. A poll of 900 financial industry employees released on Wednesday by eFinancialCareers.com, a job search Web site, found that while nearly eight out of 10 got bonuses, 46 percent thought they deserved more».

What Red Ink? Wall Street Paid Hefty Bonuses

The Story So Far: Greed + Incompetence + A Belief in Market Efﬁciency = Disaster

2009-01-29T06:01:00.000-08:00

«Greed and reckless overconﬁdence on the part of almost everyone caused us to ignore risk to a degree that is probably unparalleled in breadth and depth in American history. Even more remarkable was the lack of insight and basic competence of our leadership, which led them to ignore this development, or worse, to encourage it. Ingenious new ﬁnancial instruments certainly facilitated and exaggerated these weaknesses, but they were not the most potent ingredient in our toxic stew. That honor goes to the economic establishment for building over many decades a belief in rational expectations: reasonable, economically-induced behavior that would always guarantee approximately efﬁcient markets. In their desire for mathematical order and elegant models, the economic establishment played down the inconveniently large role of bad behavior, career risk management, and ﬂat-out bursts of irrationality.

The dominant economic theorists so valued orderliness and rationality that they actually grew to believe it, and this false conviction became increasingly dangerous. It was why Greenspan and Bernanke were not sure that bubbles – outbursts of serious irrationality – could even exist. It was why Bernanke, who had studied the bubble of 1929, could still not see it as proof of irrationality and could still view the Depression (à la Milton Friedman) as a mere consequence of incredibly bad, easily avoidable policy measures.

Of more recent importance, it was why Bernanke could dismiss a dangerous 100-year bubble in U.S. housing as being nonexistent. It was why Hyman Minsky was marginalized as an economist despite his brilliant insight of the “near inevitability” of periodic ﬁnancial crises. It was why the suggestion in academic circles of stock market inefﬁciencies, let alone major dysfunctionality, was considered a heresy. It was why Burton Malkiel could rationalize the 1987 crash as being an efﬁcient response to 12 or so triggers. These triggers, however, had a trivial weakness: seasoned portfolio managers at the time had never even heard of most of them. Never underestimate the power of a dominant academic idea to choke off competing ideas, and never underestimate the unwillingness of academics to change their views in the face of evidence. They have decades of their research and their academic standing to defend.

The incredibly inaccurate efﬁcient market theory was believed in totality by many of our ﬁnancial leaders, and believed in part by almost all. It left our economic and governmental establishment sitting by conﬁ dently, even as a lethally dangerous combination of asset bubbles, lax controls, pernicious incentives, and wickedly complicated instruments led to our current plight. “Surely none of this could happen in a rational, efﬁ cient world,” they seemed to be thinking. And the absolutely worst aspect of this belief set was that it led to a chronic underestimation of the dangers of asset bubbles breaking – the very severe loss of perceived wealth and the stranded debt that comes with a savage write-down of assets. Well, it’s nice to get that off my chest once again!».

GMO QUARTERLY LETTER January 2009

CDS: case automobilistiche e Credit Suisse

2009-01-29T05:35:00.000-08:00

Il costo per assicurarsi dal default delle case autobilistiche europee continua a crescere così come per Credit Suisse.

CDS Report: Equities spoil the mood in credit markets

Free Market: fiducia ai minimi

2009-01-28T04:10:00.000-08:00

«I started my day in Davos with Richard Edelman of the eponymous public relations company at a breakfast to launch its annual trust barometer report.

The conclusion is that trust in chief executives and private enterprise is at an all-time low. Trust in US business fell from 58 per cent last year to 38 per cent, bringing it in line with levels similar to the other side of the Atlantic.

The statistic I found most interesting is that only 49 per cent of Americans, living in the country of capitalism and free enterprise, thought the free market should be allowed to operate independently».

John Gapper - FT.com/davosblog

Paulson chiude le posizioni su RBS e porta a casa 370 milioni

2009-01-28T04:06:00.000-08:00

«U.S. hedge fund Paulson & Co made a profit of at least 270 million pounds ($376.2 million) betting on a fall in the share price of Royal Bank of Scotland (RBS.L) over the past four months, the Financial Times reported.

The newspaper said Paulson, run by billionaire John Paulson, covered its short position in RBS on Friday, according to a regulatory filing, dropping below the 0.25 percent disclosure limit.

Paulson & Co was not immediately available for comment.

British banking stocks slumped last Friday after a ban on hedge funds short-selling banks came to an end. Shares in RBS fell by 13 percent that day.

Short-sellers borrow and sell shares in the hope of buying them back for less and making profits after the price has fallen».

Reuters.com

- 70.000

2009-01-27T03:32:00.000-08:00

+ Drugmaker Pfizer Inc, which is acquiring rival Wyeth, plans to cut 15% of the companies' combined 130,000 workers - about 19,500 jobs.

+ Caterpillar Inc, the world's largest maker of heavy equipment, plans to lay off 17,000 workers and buy out 2,500 others to cut costs.

+ U.S. mobile phone service provider Sprint Nextel Corp plans to reduce staff by 8,000, or 14% of its work force.

+ Home Depot Inc, the world's largest home improvement retailer, said it would eliminate 7,000 jobs, or 2% of its work force, as it closes its Expo home design unit.

+ Amsterdam-based banking and insurance group ING said it plans to cut 7,000 jobs to save US$1.3-billion (1 billion euros) in 2009.

+ Dutch conglomerate Philips Electronics will cut 6,000 jobs after reporting its first loss since 2003.

+ Corus, Europe's No. 2 steelmaker, said it would cut 3,500 jobs worldwide, 8% of its work force.

+ Spanish steel producer Acerinox said it may temporarily lay off workers at its Spanish factory, which employs 2,500 people, if demand does not improve.

Financial Post.com

Dopo Madoff e Nadel ecco Cosmo

2009-01-27T03:25:00.000-08:00

Un altro Ponzi Scheme è venuto alla luce: Nicholas Cosmo/Agape World Inc (New York's Long Island).

Buco stimato: 400 milioni.

E non sarà l'ultimo!

Reuters.com

La banda dei 25 al centro della crisi

2009-01-27T01:58:00.000-08:00

Alan Greenspan, chairman of US Federal Reserve 1987- 2006
Mervyn King, governor of the Bank of England
Bill Clinton, former US president
Gordon Brown, prime minister
George W Bush, former US president
Senator Phil Gramm
Abby Cohen, Goldman Sachs chief US strategist
Kathleen Corbet, former CEO, Standard & Poor's
"Hank" Greenberg, AIG insurance group
Andy Hornby, former HBOS boss
Sir Fred Goodwin, former RBS boss
Steve Crawshaw, former B&B boss
Adam Applegarth, former Northern Rock boss
Dick Fuld, Lehman Brothers chief executive
Ralph Cioffi and Matthew Tannin
Lewis Ranieri
Joseph Cassano, AIG Financial Products
Chuck Prince, former Citi boss
Angelo Mozilo, Countrywide Financial
Stan O'Neal, former boss of Merrill Lynch
Jimmy Cayne, former Bear Stearns boss
Christopher Dodd, chairman, Senate banking committee (Democrat)
Geir Haarde, Icelandic prime minister
The American public
John Tiner, FSA chief executive, 2003-07

Guardian.co.uk

Quale soluzione adotterà Barack Obama per tentare di risolvere la crisi?

2009-01-21T05:05:00.000-08:00

Le soluzioni sul tavolo paiono essere le seguenti:

vendita dei toxic assets sul mercato attraverso apposite aste;
costituzione di una garanzia da parte dello Stato a favore delle banche in caso di svalutazione (i.e. il modello Citi e BofA);
creazione di una bad bank sulla base del modello svedese.

Certo non è un problema di facile soluzione per il neo presidente.

Obama Has No Quick Fix for Banks

Bond anti crisi: e la trasparenza?

2009-01-21T02:17:00.000-08:00

Il Sole 24 Ore riporta la notizia che una nuova versione del decreto attuativo del Tesoro per l'emissione dei bond delle banche destinato a essere sottoscritto da via XX settembre e' sui tavoli delle maggiori banche italiane.

Ma sul sito del Ministero non vi è nulla di pubblicato in tema, né la prima bozza né la seconda bozza del decreto sono pubblici. Complimenti per la trasparenza!

Madoff il primo, Nadel il secondo, quanti altri ce ne sono?

2009-01-21T01:31:00.000-08:00

Arthur Nadel

Lolfed

Il sistema bancario USA è fallito? Secondo Roubini sì

2009-01-20T06:50:00.000-08:00

Nouriel Roubini is just a day late to make the most depressing day of the year just that little bit more painful, but his latest missive is sure to continue the pain into Tuesday.

By his calculations we are not even halfway through the fallout from the financial crisis. In fact, we seem at least a couple of trillion away from it:

U.S. financial losses from the credit crisis may reach $3.6 trillion, suggesting the banking system is “effectively insolvent,” said New York University Professor Nouriel Roubini, who predicted last year’s economic crisis.

“I’ve found that credit losses could peak at a level of 3.6 trillion for U.S. institutions, half of them by banks and broker dealers,” Roubini said at a conference in Dubai today. “If that’s true, it means the U.S. banking system is effectively insolvent because it starts with a capital of $1.4 trillion. This is a systemic banking crisis.”

Losses and writedowns at financial companies worldwide have risen to more than $1 trillion since the U.S. subprime mortgage market collapsed in 2007, according to data compiled by Bloomberg…

“The problems of Citi, Bank of America and others suggest the system is bankrupt,” Roubini said. “In Europe, it’s the same thing.”

On commodities, Roubini is also proving to be the anti-Goldman.
Oil prices will trade between $30 and $40 a barrel all year, Roubini predicted.

“I see commodities falling overall another 15-20 percent,” Roubini said. “This outlook for commodity prices is beneficial for oil importers, it’s going to imply that economic recovery might occur faster, but from the point of view of oil exporters, this will be very negative.”

FT Alphaville

Krugman, la Spagna e l'Euro

2009-01-20T02:25:00.000-08:00

«… isn’t hard to explain. Spain was basically Florida, with a housing bubble inflated by both resident and holiday purchases, and now the bubble has burst.

But Spain is in worse shape than Florida, for two reasons — reasons familiar to anyone who was involved in the great debate about whether the euro was a good idea.

First, Europe doesn’t have a central government; Spain, unlike Florida, can’t draw on Social Security and Medicare checks from Washington. So the burden of recession falls entirely on the local budget — hence the country’s declining credit rating.

Second, the United States has a more or less geographically integrated labor market: workers move from distressed regions to those with better prospects. (The housing bust has, however, reduced mobility because people can’t sell their houses.) Europe does not: yes, there’s a fair bit of mobility both among the elite and among low-wage workers at the bottom, but nothing like the US level.

So what can Spain do? It needs to become more competitive — but it can’t have a devaluation, because it’s a euro country. So the only alternative is wage cuts, which are desperately hard to achieve (and create big problems for debtors.)

Contrary to what everyone seemed to be saying even a few weeks ago, being a member of the eurozone doesn’t immunize countries against crisis. In Spain’s case (and Italy’s, and Ireland’s, and Greece’s) the euro may well be making things worse.

And Britain’s plunging pound, unpopular though it is, may turn out to have been a very good thing».

Pain in Spain

Einhorn illustra le strategie di Greenlight Capital al Financial Times

2009-01-19T13:02:00.000-08:00

(luglio 2008)

Fiat acquista un pezzo di Chrysler?

2009-01-19T12:37:00.000-08:00

«Fiat SpA is in talks with Chrysler LLC over the possibility of taking a stake in the U.S. automaker as part of a strategic partnership that could allow Fiat to manufacture and sell its small cars in the U.S., according to a person familiar with the matter.

As part of the potential deal, Fiat aims to share its engine and transmission technology with Chrysler, according to the person familiar with the matter. This cooperation would allow the U.S. automaker to also introduce new models of small cars with low emissions to its fleet, this person added.

For months Fiat has been exploring ways to gain a foothold in the North American car market, hunting for a partner that could manufacture its Fiat 500 model and re-launch its high-end Alfa Romeo brand in the U.S.

As part of the deal, Fiat is exploring whether it could sell its cars through Chrysler's US dealership network, the person said.

A Chrysler spokesperson did not immediately return calls seeking comment».

WSJ.com

«Fiat is talking with Chrysler LLC about giving it access to its technology in exchange for a stake in the U.S. car maker, a source close to the Italian group said on Monday.

"Between the two groups there is talk about Chrysler possibly using Fiat technology in exchange for a stake," the source told Reuters, confirming a report by industry publication Automotive News Europe. The source spoke on condition of anonymity.

Citing people familiar with the matter, Automotive News said in a report posted on its website (www.autonews.com) earlier in the day that Fiat could give Chrysler access to platforms, engines and transmissions.

The source told Reuters a deal with Fiat would help Chrysler make vehicles that produce fewer harmful emissions.

"To get financing U.S. (car makers) have to show that they are really committed to developing over the short term a new family of vehicles that pollute less," the source said. "By itself, Chrysler would not be able to meet this condition."

Along with General Motors, Chrysler has gotten billions of euros in government loans to avert collapse in exchange for meeting certain cost-cutting targets and demonstrating that they are viable by the end of March.

Neither Fiat, Chrysler nor its owner, Cerberus Capital Management, were immediately available for comment.

Fiat's stock ended 4.9 percent lower at 4.48 euros, recovering some lost ground after earlier news that it could only meet its 2010 targets if the market returned to normal -- something seen by analysts as being far from likely.

BET ON CHRYSLER'S FUTURE

In an interview with the same publication in December, Fiat Chief Executive Sergio Marchionne said Fiat needed a partner because it was too small to survive the crisis alone. He said automakers needed to have scale -- producing at least 5.5-6.0 million cars a year -- to have a chance of making money.

One London analyst said scale was probably the reason behind Fiat's interest in Chrysler, despite the U.S. car maker's desperate situation.

"This is a bet that Chrysler in some form will exist (in the future)," he said on condition of anonymity.

Apart from Ferrari and Maserati, Fiat does not sell cars under its three other brands in the United States.

Before crisis struck the car industry and decimated sales, Fiat had been talking with the three U.S. automakers about using some of their idle production lines to help it make a return to the U.S. market.

A second London analyst said the stake that Fiat could take in Chrysler would likely be a token 5 percent. Fiat would probably use Chrysler's dealership network to sell small cars, something which is lacking from Chrysler's product portfolio, the analyst said.

Although Chrysler denies positioning itself for a sale, it has been in talks with other manufacturers.

Chrysler Vice Chairman Tom LaSorda said last week it was not selling brands but hoped to sell equipment used to make one of its models, the PT Cruiser.

He declined to comment on a Reuters report about Chrysler having discussed selling assets to Renault-Nissan and Magna International.

Seen as the weakest of the Detroit manufacturers, Chrysler is in such a difficult situation that analysts question whether it can survive without a merger partner.

It suffered a 30 percent drop in sales in 2008.

In the second half of 2008, it burned through $9 billion to end the year with $2 billion in cash.

In a bid to cut costs and save cash, it has shut down all 30 of its U.S. plants for a month from the middle of December.

Fiat and other car makers have also been halting production to lower their inventories of unsold vehicles.

Moving the metal has meant offering attractive deals to lure drivers back to showrooms.

In Chrysler's case, its finance arm has begun offering zero percent financing after getting a $1.5 billion loan from the U.S. Treasury».

Reuters.com

La RIIA sconfitta?

2009-01-19T09:22:00.001-08:00

The Recording Industry Association of America (R.I.A.A.) has quietly ended its campaign to sue illicit digital music sharing into oblivion, the Wall Street Journal reports.

The first R.I.A.A. lawsuits were filed in September 2003, against individuals allegedly caught sharing music illegally online. By the time R.I.A.A. halted its legal campaign this past fall, they’d managed to issue 35,000 suits, win none of them, spend more money on legal fees than they recovered in settlements, and plunge the industry into a public relations quagmire — all the while failing to stop either music piracy or the continuing decline of CD sales.

Meanwhile, innovations in legal distribution of digital music, especially music-based video games like Guitar Hero and Rock Band, have fueled a major rise in legitimate purchases of digital music, outside the music industry’s traditional business model.

To get a sense of the marketing power of these games, consider this: after Aerosmith’s song “Same Old Song and Dance” (released in 1974) was released for Guitar Hero, online sales of the old song surged, up 446 percent on iTunes and other legal sites for the two months after the Guitar Hero release.

Independent record labels are coming into their own, eating away at the market share of the four major music conglomerates. Musicians, from Radiohead to Jonathan Coulton and many others, are striking out on their own, distributing music themselves online, without having to give up any of their earnings to a label.

With these innovations changing the way we listen to music, and with more on the way, what is the likelihood that major record labels become as superfluous as full-fee real-estate agents, whose commissions rarely add value for homesellers?

Are Record Labels the New Realtors?

Direttiva Prospetto: consultazione

2009-01-19T08:27:00.000-08:00

La Commissione Europea ha avviato una consultazione pubblica sulle proposte di modifica alla Direttiva Prospetto (Direttiva 2003/71/EC), con l’obiettivo di migliorarne e semplificarne l’applicazione a livello dei singoli Stati membri (è anche disponibile un cd. background document).

La Direttiva, attuata nel nostro ordinamento con il d.lgs. n. 51 del 2007 che ha modificato il Tuf, ha instaurato, tra l’altro, un sistema di regole di disclosure in materia di offerta pubblica o di ammissione alla negoziazione di strumenti finanziari.

A distanza di cinque anni dall’ entrata in vigore, la Commissione Europea ha ritenuto necessario, procedere ad un riesame del provvedimento elaborando proposte di revisione, parte delle quali suggerite dal Gruppo ESME.

La consultazione terminerà il 10 Marzo 2009.

Le proposte di modifica di interesse per gli emittenti riguardano:

1. Definizione di investitore qualificato: l’attuale nozione di “investitore qualificato” non comprende le figure, introdotte dalla Direttiva 2004/39/CE (MiFID), di “cliente professionale” e “controparte qualificata”. Ciò genera inevitabili difficoltà di coordinamento nonché maggiori costi di compliance per gli emittenti, specialmente per quanto riguarda l’individuazione dei soggetti destinatari dell’offerta di strumenti finanziari. La proposta mira ad estendere la portata della definizione di “investitore qualificato” per allinearla a quella dettata dalla MiFID.

2. Casi di esonero dall’obbligo di pubblicazione del prospetto: la proposta di modifica riguarda i casi di successive rivendite di valori mobiliari (cd “retail cascade”), che si realizzano quando il collocamento di strumenti finanziari avviene tramite intermediari finanziari e non attraverso l’emittente. La Commissione ritiene che la pubblicazione di un nuovo prospetto corrispondente rappresenti un requisito eccessivamente gravoso per gli emittenti e ne suggerisce pertanto l’eliminazione.

3. Strumenti finanziari offerti a dipendenti: l’offerta di strumenti finanziari ad amministratori o dipendenti rientra tra le ipotesi di esenzione dall’obbligo di pubblicazione del prospetto. Tale previsione non trova applicazione nei confronti delle società non quotate e nei confronti delle società quotate in un mercato regolamentato extra UE. La Commissione ritiene opportuno estendere l’esenzione anche a queste società poiché la redazione del prospetto impone costi che non sono giustificati in termini di protezione degli investitori.

4. Informazioni: la previsione attuale che impone agli emittenti la pubblicazione di un documento annuale riepilogativo di tutte le informazioni rese disponibili nei precedenti dodici mesi, risulta superata e ridondante in virtù della disciplina introdotta dalla Direttiva Transparency (Direttiva 2004/109/CE) che prevede la pubblicazione delle cd. informazioni regolamentate che include buona parte di quelle pubblicate nel documento ex art. 10 della Direttiva Prospetto. La Commissione propone pertanto la rimozione dell’articolo in commento.

5. Revoca dell’accettazione del prospetto: oggi, qualora, dopo la pubblicazione del prospetto, sopravvengano nuovi fatti significativi in grado di influire sulla valutazione degli strumenti finanziari, gli investitori possono revocare l’accettazione del prospetto entro un certo termine dalla pubblicazione del supplemento. Dall’esame delle soluzioni adottate nei singoli Stati emerge una carenza di armonizzazione nella definizione di questo termine. Si ritiene pertanto necessario fissare in due giorni lavorativi dopo la pubblicazione del supplemento del prospetto l’intervallo temporale comune.

6. Modifica delle soglie per la determinazione dello Stato membro d’origine: gli emittenti di strumenti finanziari diversi dai titoli di capitale possono scegliere lo Stato membro d’origine solo laddove il valore nominale unitario degli strumenti suddetti sia almeno 1000 euro; la rimozione di tale soglia permetterebbe agli emittenti di scegliere, case-by-case, l’autorità competente più appropriata.

Assonime.it

La crisi dei mutui: un aiuto dal mondo dell'eros

2009-01-19T08:11:00.000-08:00

Jayshree Gupta reclined on an English-style sofa in her Beverly Hills penthouse as crews buzzed around taping protective paper over the hardwood floors and wheeling in crates of camera gear.

She was hosting a television-commercial shoot. It meant allowing dozens of strangers and 400-pound klieg lights into her home for a full day, and it was worth every minute, Gupta said.

“I am doing it because I need money to maintain my lifestyle,” she said, perched near a portrait of herself painted by her friend Barbara Carrera, the Bond girl in 1983’s “Never Say Never Again.” “A lot of my money is either gone or tied up. Right now I am hurting.”

Gupta, a clothing and jewelry designer, is among an increasing number of recession-pinched Los Angeles homeowners turning to Hollywood for help, offering their houses as sets for feature films, commercials and even adult movies.

“We are getting a lot of calls,” said Joseph Darrell, whose Los Angeles-based Joe Darrell Location Service represents Gupta. “They say, ‘Can you help me to bring a production to my home, because I have trouble making my payments.’”

The daily fee paid for the sort of work done at Gupta’s 3,000-square-foot condo in the city’s signature 90210 ZIP code is usually $2,000 to $3,000, Darrell said. That would cover about half of her monthly household bills, including maid service.

Bloomberg.com

Gordon si è risentito

2009-01-19T07:52:00.000-08:00

Gordon Brown today said he was "angry" with the Royal Bank of Scotland over a strategy that has left it with potential losses of £28 billion, as the Prime Minister defended the Government’s second attempt to rescue Britain’s struggling lenders.

Mr Brown said this morning that Britons had a right to be furious at "irresponsible" behaviour which saw RBS spend billions last year acquiring ABN Amro, the Dutch bank which had exposure to US sub-prime mortgages, as well as investing directly in the American home loan market.

“Yes, I’m angry about what happened at the Royal Bank of Scotland," he said.

(...)

Mr Brown added: "Now we know that so much was lost in sub-prime loans in the US and now we know that some of that was related to the purchase of ABN Amro, I think people have a right to be angry that these write-offs are happening and that these write-offs were caused by decisions that were made about international investments that were clearly wrong investments.”

RBS confirmed this morning that it will report a full-year loss in February which could hit £28 billion - with £20 billion of the total related to the acquisition of ABN.

It is the biggest-ever loss in British corporate history and is nearly double to current £15 billion record set by Vodafone, the UK telecoms giant, in 2006.

RBS also confirmed that the Government is set to increase its stake in the bank from 58 per cent to 70 per cent. Last October, the Treasury sank £37 billion into the banking sector – the Government’s first attempt to stabilise the market – with RBS taking £20 billion of funding.

RBS - 28

2009-01-19T07:47:00.000-08:00

Royal Bank of Scotland (RBS) confirmed today that losses for the full-year could reach as much as £28 billion ...

The bank said this morning that it will make an annual loss of between £7 billion and £8 billion, when it announces its results on February 26.

However, it also expects to announce a charge of between £15 billion and £20 billion related to last year's acquisition of ABN Amro, the Dutch bank, which it acquired with Spain's Santander and Fortis, the Belgium bank.

The potential £28 billion loss is nearly twice the size of Vodafone's £15 billion deficit in 2006, currently the biggest-ever corporate loss in UK history.

Times Online

Collapse of confidence in banks

2009-01-19T07:44:00.000-08:00

As I said this morning, this is not a bank rescue plan. But if it had been, it would have failed miserably.

Barclays' share price has fallen again today. At the current price of 90p, this bank's entire market value is £7.5bn. And remember, this is a bank that said on Friday night that its profits for 2008 were considerably more than £5.3bn.
In other words, investors currently value this giant international bank at a little over one year's profits. Which is little short of extraordinary.

And let's not even mention that Royal Bank of Scotland's shares are down by more than 50%, on the supposedly reassuring news that taxpayers will be sharing in its future pain.
Confidence has drained from the banking system. And to state the obvious, today's myriad announcements from the Treasury have not succeeded in rebuilding that confidence, which is so vital to a functioning economy.

Peston's Pick

OECD says EU Should Consider Single Financial Supervisor

2009-01-19T07:26:00.000-08:00

The OECD urges a more centralized and integrated approach to financial regulation in European Union, including considering a single supervisor.

In its just released Economic Survey of the Euro Area, the OECD accepts that the current regulatory regime in the EU does have a number of advantages. It aligns regulatory and legal responsibility for firms with political and fiscal responsibility, should things go wrong, and with the operation of national insolvency law and the operation of national deposit guarantee schemes. “However, the EU’s current regime and the patchwork of different instruments, institutions and responsibilities does carry some disadvantages, especially as large complex financial institutions have extensive cross-border activities and the potential to have a significant impact on the wider economy, the OECD says.

Research Recap

Citadel, gli hedge funds e la situazione di mercato

2009-01-19T06:05:00.000-08:00

Hedge Funds, Unhinged

Il costo del denaro per le imprese

2009-01-19T05:13:00.000-08:00

Cost of Borrowing Zooms Up for Corporations

Ue, crollo del Pil nel 2009:-1,9%

2009-01-19T04:02:00.000-08:00

MILANO - La crisi economica e finanziaria si farà sentire anche nel 2009. E gli effetti saranno preoccupanti: crollo della produzione, milioni di posti di lavoro in meno, aumento del deficit dei vari Paesi. E l'Italia, in questo contesto, appare piuttosto esposta alle turbolenze. A dipingere un quadro tutt'altro che rassicurante sono le previsioni intermedie pubblicate da Eurostat. Primo dato: la Commissione Ue rivede drasticamente al ribasso le sue precedenti stime di crescita dell'economia europea e prevede per il 2009 un crollo del Pil (prodotto interno lordo) a quota -1,9%. Bruxelles, comunque, spera che la ripresa possa manifestarsi già entro la fine dell'anno, e prevede che il 2010 si chiuderà con un +0,4%. Tra i principali Paesi della zona euro, la Germania chiuderà il 2009 a quota -2,3%, la Francia -1,8% e la Spagna, come l'Italia, a -2%.

DEFICIT - La recessione, riducendo il Pil, fa schizzare in alto proporzionalmente i deficit pubblici dei paesi dell'eurozona (4,0% del Pil) e dell'Ue nel complesso (4,4%). Secondo le stime, fra i membri dell'euro il deficit più alto rispetto al Pil è quello dell'Irlanda (11,0%), che già nel 2008 era a 6,3%. Ma le previsioni sul deficit (vale a dire la spesa pubblica non coperta dalle entrate) sono molto oltre la barra del 3% anche per la Spagna (6,2%), la Francia (5,4%), e il Portogallo (4,6%). Sforamento, ma più lieve, anche per l'Italia (3,8%) e la Grecia (3,7%), mentre restano vicini ai limiti di Maastricht la Germania (2,9%) e il Belgio (3%). Fuori dall'eurozona, la caduta più impressionante è quella del Regno Unito (8,8%), ed è significativo anche il dato della Romania (7,5%). Va male anche per la Lituania (6,3%), mentre gli altri due Paesi baltici restano sul 3% (Lettonia) o poco sopra (Estonia, 3,2%).

DISOCCUPAZIONE - La disoccupazione fa, purtroppo, un balzo in avanti. Nella zona euro il dato sarà del 9,3% e nei Ventisette dell'8,7%, con 3,5 milioni di posti di lavoro in meno. In Italia il tasso di disoccupazione sarà dell'8,2%, contro il 6,7% del 2008. L'inflazione, nel nostro Paese, scenderà all'1,2% nel 2009, per poi risalire al 2,2% nel 2010. Nelle zona euro l'inflazione scenderà all'1% nel 2009 per poi salire all'1,8% il prossimo anno.

ITALIA - A proposito del nostro Paese, la Commissione europea spiega che «l'elevatissimo debito pubblico impedisce al governo di ricorrere in maniera più ampia a strumenti fiscali» per far fronte alla crisi. «Un ricorso agli stabilizzatori automatici - prosegue - porterebbe il disavanzo delle amministrazioni pubbliche ben al di sopra del 3% del Pil nel 2009, con un solo un marginale miglioramento atteso nel 2010. Questo, insieme con una crescita non certo esuberante - prosegue la Commissione Europea - implica l'aumento del debito. Ed eventuali ricapitalizzazioni bancarie potrebbero far salire ancora di più l'alto debito».

ALMUNIA - «Le misure anticrisi prese dal governo italiano - afferma il commissario Ue agli Affari economici, Joaquin Almunia - costituiscono una adeguata combinazione tra l'esigenza di stimolare l'economia e l'esigenza di mantenere prudenza» di bilancio. «L'8 febbraio - ha aggiunto Almunia - faremo una prima valutazione sui Paesi che si trovano con un deficit superiore al 3%. Io non posso dire al momento se ci sarà una procedura nei confronti dell'Italia».Corriere.it

Burberry, Nokia e Fiat

2009-01-19T03:22:00.000-08:00

Settimana intensa in Europa: Burberry, Nokia e Fiat comunicano i risultati di periodo.

Krugman e la bad bank

2009-01-19T03:13:00.000-08:00

Il disastro della finanza globale

2009-01-19T00:39:00.000-08:00

La storia degli ultimi trent’anni insegna: le recessioni peggiori dopo le crisi bancarie. Ne parla Massimo Mucchetti su Corriere.it.

USA: deflazione o inflazione?

2009-01-19T00:01:00.000-08:00

Secondo Askari e Krichene gli Stati Uniti sono sia in deflazione sia in inflazione, dipende da dove si guarda la situazione e da quali prezzi vengono presi in considerazione.

Towards an inflationary twilight zone

Governance: più esperti nei board migliori risultati?

2009-01-18T23:53:00.000-08:00

Secondo Hau, Steinbrecher e Thum le banche tedesche nel cui consiglio di sorveglianza sedevano o siedono persone competenti hanno sofferto minori perdite legate alla crisi dei subprime. Perciò una governance migliore potrebbe essere una soluzione per risolvere gli attuali problemi dell'industria finanziaria, senza dover attivare altri più penetranti strumenti di controllo di fonte normativa nei confronti delle banche.

Board (in)competence and the subprime crisis

I costi straordinari della finanza

2009-01-18T13:11:00.000-08:00

Dicembre 2007 - gennaio 2009: stanziati 7,8 trillioni, spesi 3,3

Economy rescue: Adding up the dollars

La mappa dei pignoramenti a fine 2008

2009-01-16T09:44:00.001-08:00

RealtyTrac reported this week that in 2008, the U.S. had a total of 3,157,806 foreclosure filings — default notices, auction sale notices and bank repossessions — on 2,330,483 U.S. properties. This was an 81% increase over 2007, and a 225% percent increase from 2006.

The report also shows that 1.84 percent of all U.S. housing units (one in 54) received at least one foreclosure filing during the year, up from 1.03 percent in 2007.

The Big Picture

Altri Madoff all'orizzonte?

2009-01-16T09:34:00.000-08:00

Politico suggests that the Obama Administration is concerned that during the current financial turmoil matters may become even more destabilized by the surfacing of additional frauds. One commentator noted that there was probably "another Bernie Madoff out there." Possible evidence?

Are there other firms out there with unblemished quarterly records? Yes. According to research done for Politico by Morningstar Inc., there are 1,684 hedge funds that have disclosed their results for the past 20 consecutive quarters. Of those, Morningstar found that 34 have never reported a down quarter in the past five years. And of those 34, at least seven funds, or their parent firms, are in some way connected to the Madoff scandal as investors in Madoff’s operation. That leaves 27 firms that have a five-year track record of gains and no known connection to Madoff.

To the extent that additional frauds surface and hedge funds rest at the center (either as the perpetrators of the fraud or as depositors with advisors who commit the fraud), it is worth remembering that on this issue the Securities and Exchange Commission tried to be proactive.

It adopted a rule that required hedge funds to register with the agency and file reports about its activities.

What happened to the rule? The DC Circuit, the circuit full of political appointees who are often too toxic to get appointed in their own circuit (and who often want to attract the attention of those looking for prospective Supreme Court nominees), struck down the modest rule. Why? Parsing through the contorted reasoning of the decision, the panel largely objected to increased government regulation of the markets. In other words, it was less about law and more about an excessive deference to the market place. That philosophy explains in large part why we are in the current mess.

Theracetothebottom

The 10 most unethical people in business

2009-01-16T09:24:00.000-08:00

Bernard Madoff. Turns out a lot of people were suspicious of Madoff's ability to deliver high percentage returns like clockwork for long periods of time. It also turns out that he allegedly ran a $50 billion Ponzi scheme that, when discovered, ruined many a life savings. It's not yet clear how many people at Bernard L. Madoff Investment Securities knew of the scam, but it's clear that Madoff was the mastermind.
David Colby. Colby, the former CFO of Wellpoint, was caught carrying on multiple affairs, even once texting "ABORT!!" to one of his many girlfriends after discovering she was pregnant. He carried on relationships with over 30 women and proposed to at least 12 of them.
Rod Blagojevich. Blagojevich is the governor of Illinois who allegedly tried to "sell" the Senate seat vacated by President-elect Barack Obama. Some reports say he tried to trade the seat for ambassadorships, money and positions within pro-union groups and even a $150,000 salary for his wife.
Heinz-Joachim Neubürger, Karl-Hermann Baumann and Johannes Feldmayer. The two former CFOs and former chairman of Siemens, respectively, got busted over bribery and their company was fined billions. The bribes that they paid to earn contracts could not have been worth more than the $1.4 billion settlement the company agreed to pay.
Ted Stevens. Stevens is the former senator from Alaska who was found guilty of failing to report gifts given to him by various contractors. He faces up to five years for each of the seven counts against him. His sentencing hearing is scheduled for February 25.
Bruno A Kaelin. Kaelin, a former senior vice president and head of corporate compliance at Alstom, was arrested in Switzerland in August following a joint Franco-Swiss-Italian investigation into his alleged role in running a bribery slush fund and laundering hundreds of millions of euros. Prior to that, Kaelin was convicted in a separate bribery case in Italy involving payoffs to two officials of the Italian electric company Enel.
Adam Vitale. Vitale was sentenced to 30 months in prison and $180,000 restitution to be paid to AOL after he found a way to spam 1.2 million AOL users in a way that avoided being caught by AOL's spam filter. Vitale also had 22 prior convictions, including running an online prostitution ring through Craigslist.
Robert Rubin. Rubin, like it or not, became one of the faces tied to the 2008 financial crisis. His position of deregulation when he was Treasury secretary is now faulted by some for many of the problems of today. He also became the fall guy for Citigroup's business strategy of leveraging more risk.
Marco Benatti. Benatti, a former Italian director of advertising for WPP, was accused of libel last year for calling WPP chief executive Sir Martin Sorrell a "mad dwarf" and was alleged to have secretly pocketed millions of pounds from a deal he helped to broker. WPP's lawyers, claiming up to 12.5 million pounds for breach of "fiduciary duty," alleged at a court hearing in London that Benatti was the "secret beneficiary" of most of the proceeds from a 17 million pound takeover of Media Club, an Italian advertising company. Benatti sued back, alleging unfair dismissal. He argued that he was really let go because he had fallen out with Daniela Weber, WPP's chief operating officer in Italy, with whom he alleged Sorrell was having a relationship. In last year's libel case, Sorrell accused Benatti of circulating a computer-generated image showing him with Weber labeled "the mad dwarf and the nympho schizo."
James M. DiBlasio. DiBlasio makes the list for going on a three-day bender and hacking into the computers of his company, Ski.com, while drunk. Fortunately for him, the CEO of Ski.com wasn't too angry about the situation and decided not to pursue charges.

Marketwatch

Citi e Merrill Lynch

2009-01-16T05:04:00.000-08:00

Citigroup on Friday reported a net loss of $8.29 billion

Merrill Lynch results indicate a fourth-quarter loss of $15.31 billion.

Marketwatch

Nortel in Chapter 11

2009-01-14T06:05:00.000-08:00

Toronto-based Nortel is reeling from the sudden drop in demand for its voice-only telecom-network equipment and has been trying to cut costs and sell assets to survive the downturn. It is expected to file for protection from creditors in Canada, as well.

Nortel was facing a $107 million bond interest payment this week. The company owes bondholders more than $3.8 billion, according to court filings.

In December, the company had received notice from the New York Stock Exchange that it faced delisting if it couldn't bring its share price above the required $1 minimum in the next six months. It was last trading at 32 cents a share.

Nortel's shares plunged last year as customers reduced spending amid the economic downturn.

The company also filed for protection under Chapter 15 of the U.S. Bankruptcy Code. Chapter 15, added to the U.S. Bankruptcy Code in 2005, opens the door for a company or court-appointed administrator to seek a U.S. bankruptcy court's recognition of a foreign bankruptcy case as the main, or controlling proceeding.

WSJ.com

Alitalia / Air France

2009-01-13T07:24:00.000-08:00

CAI ha acquistato gli assets di Alitalia pagandoli 427 milioni.

CAI, dopo soli 3 mesi, ha rivenduto ad Air France il 25% per 323 milioni, attribuendo così alla Nuova Alitalia un valore complessivo di circa 1,2 miliardi.

Non male come rivalutazione dell'investimento.

A noi contribuenti restano invece da pagare circa 600 milioni per i debiti della Vecchia Alitalia.

I tagli delle rating agencies alla Nuova Zelanda e alla Spagna

2009-01-13T06:21:00.000-08:00

«The New Zealand dollar plunged more than 3 per cent against both the Japanese Yen and the US dollar on Tuesday, after ratings agency Standard & Poor’s warned it could downgrade the Kiwi’s foreign currency debt rating.

S&P lowered its outlook for New Zealand’s rating to negative from stable, citing the country’s rising current account deficit and worsening fiscal outlook, though confirmed a stable outlook for the local currency rating.

The Kiwi was sold off heavily in the wake of the news, sinking 3.5 per cent against the US dollar to US$0.55, and breaking through the psychologically important Y50 level against the Japanese yen, at one point losing 4 per cent to touch an intraday low of Y49.20.

Analysts said the Kiwi was further hurt by deteriorating demand for commodities amid the global economic downturn, and news that business confidence in the country had hit a 34-year low, according to the New Zealand Institute of Economic Research’s quarterly survey.

The dismal survey results increased speculation that New Zealand’s national bank would cut interest rates by at least 100 basis points on January 29.

David Woo at Barclays Capital said the Kiwi could have further to fall: “Waning investor optimism, declining equity and commodity markets and a very weak reading in business confidence are likely to weigh significantly on the NZD, while the S&P news adds to the downward pressure.”

On Monday, S&P cut its outlook for Spain’s foreign currency debt to negative from stable. Analysts warned this might not only damage the market for Spanish bonds, but would also put pressure on the euro. The eurozone currency extended two sessions of losses against the dollar to slide 0.4 per cent at $1.33, and also fell 0.6 per cent against the yen at Y118.44.

Steve Barrow at Standard Bank said: “We definitely think that we will hear more and more talk about downgrades within the periphery eurozone bond markets this year and, who knows, maybe the ratings agencies will actually get their knives out and cut. Hence, this story is set to get bigger, with the implication that it eventually starts to unsettle the euro.”

Elsewhere, a broad based return to risk aversion in the markets saw the safe haven yen stage gains against all the major currency crosses. Against the dollar, the yen extended Monday’s move below the significant Y90 level, slipping a further 0.2 per cent to Y89.05. The yen also jumped 1.8 per cent against the high yielding Australian dollar, to Y59.69, and added 0.5 per cent against the Swiss franc to Y79.68.

Sterling was weaker across the board after the release of worse than expected retail sales and housing data, and an exceptionally grim business survey from the British Chamber of Commerce. The pound fell 1.1 per cent against the euro to £0.9115, and was 1.5 per cent lower against the dollar at $1.4595».

FT.com

Qualcuno uscirà dall'Euro?

2009-01-13T05:41:00.000-08:00

Secondo FT le probabilità che qualche Paese esca dall'area Euro non sono così remote come si potrebbe pensare.

«The market fears the Greeks, even when bearing gifts. It is also scared about the Irish and the Spanish.

Greece has always been treated as a peripheral eurozone member, not only in geography. Even before last year's civil unrest, its bonds traded at a significantly higher yield than those of Germany - showing a higher perceived default risk.

The market is nervous about other nations on the eurozone's periphery, notably Ireland and Spain, which grew overextended during the credit bubble.

A eurozone country defaulting and leaving the euro is close to an unthinkable event. But Friday's news from Standard & Poor's that Greece and Ireland were on review for a possible downgrade, followed yesterday by Spain, left many thinking the unthinkable.

The spread of Greek bonds over German bunds is 2.32 percentage points, almost 10 times its level of two years ago. Spanish spreads yesterday rose above 90 for the first time. An Intrade prediction market future puts the odds on a current eurozone member leaving the euro by the end of next year at about 30 per cent.

The euro dropped more than 1 per cent against the dollar within minutes of the Spanish news, and is down 9.8 per cent in the last few weeks.

A crisis over Greece might be the euro's ultimate "stress test" (to borrow a phrase from Daniel Katzive of Credit Suisse). If the eurozone could find a way to deal with a default, that might confirm the euro's status as the world's next reserve currency.

But if the eurozone could not work out a solution, and a country exited, any such ambition would be over.

The dollar-euro exchange rate affects many other assets.

Now that fears are in the open that Greece (or another peripheral country) could be the Trojan horse that breaks up the euro, any news on this front could shake many other markets».

The short view

Sony e Toshiba

2009-01-13T01:41:00.000-08:00

Sony ha chiuso con una perdita dell'8,9% sulla base di un report gionalistico in cui si prevede che il colosso giapponese chiuderà i conti del 2008 - per la prima volta dopo 14 anni - in perdita, mentre Toshiba ha perso l'8,6% dopo che NHK ha previsto per la stessa Toshiba una perdita dopo 7 anni.

Bloomberg.com

I conti di BofA e Citi

2009-01-13T00:33:00.000-08:00

Sta per arrivare il momento in cui le banche americane comunicano ai mercati i dati contabili di periodo.

Citi prevede per BofA (che comunicherà i dati il 20 gennaio) una perdita di circa 3,6 miliardi.

Mentre per Citi (che comunicherà i dati il 22 gennaio) è prevista, salvo sorprese, una perdita di circa 10 miliardi.

FT.com/Alphaville

Commerzbank/Dresdner

2009-01-12T05:21:00.000-08:00

Come il tempo cambia le cose.

Quattro mesi fa Commerzbank annunciava al mercato l'acqusizione di Dresdner. Ora l'acquisizione è via di completamento grazie a sussidi statali concessi a Commerzbank per circa 18 miliardi.

Rileggere la presentazione dell'operazione pubblicata nel mese di settembre lascia un po' stupiti (soprattutto pagina 25).

Biggest German Bailout Stands Now At € 18.3 Billion & Counting...

M&A

2009-01-12T03:52:00.000-08:00

Citi sta cercando di fare cassa cedendo la divisione Smith Barney a Morgan Stanley.

Reuters.com

Continuano le difficoltà per i titoli di stato

2009-01-07T16:49:00.000-08:00

Da FT.com

«Investors shunned one of the most liquid and safest assets in the world on Wednesday as a German bond auction failed in a warning for governments seeking to raise record amounts of debt to stimulate their slowing economies. It is the first eurozone bond auction of the year and an ominous sign of potential trouble ahead for governments around the world, with an estimated $3,000bn expected to be issued in sovereign debt this year — three times more than in 2008.

The auction of 10-year bonds failed to attract enough bids to reach the €6bn the government wanted to raise. Although a number of German bond auctions failed last year, it was almost unheard of before the credit crisis.

Meyrick Chapman, a fixed-income strategist at UBS, said: “When a German bond auction fails, then that does suggest there is trouble ahead for governments wanting to raise money in the debt markets.
“There was certainly a supply/demand imbalance because of the large amount of issuance in the last quarter of 2008 and the large amount due in the coming months. Before the financial crisis, German bond auctions just did not fail».

Da FT Alphaville

«In fact, the timing of this failed bond auction is far from ideal. US Treasuries have been in under pressure in recent days partly because a glut of new issuance is about to hit the market. A total of $166bn in fact, this week.

All of which may explain why the yield on the 10-year US Treasury rose on Wednesday, in spite of dismal US job numbers rekindling deflation fears elsewhere. For the record, the yield on the 10-year note is currently above 2.5%, against 2.46% late on Tuesday.

Perhaps the bond bubble is starting to deflate.

For a more in-depth take on the bond market bubble, this morning’s analysis piece in the FT, Onerous issuance, is well worth a read».

Madoff e le società di revisione

2009-01-07T16:40:00.000-08:00

A quanto pare PricewaterhouseCoopers, Ernst & Young e KPMG saranno a breve poste sotto accusa per non aver saputo scovare e svelare la gigantesca truffa orchestrata da Bernie Madoff.

Su Naked Short è pubblicata una interessante discussione sul tema e una analisi degli standard che debbono essere seguiti per effettuare la revisione degli hedge funds.

First, Bean all the Counters

Alcoa

2009-01-06T14:20:00.000-08:00

Alcoa Inc. late Tuesday said it plans to cut 13% of its global workforce, sell four business units, cut output, freeze salaries and hiring efforts. The Pittsburgh-based aluminum giant said it is taking the steps to conserve cash in the current economic downturn. The meausures will result in a fourth-quarter charge of $900 million to $950 million after tax, or $1.13 to $1.19 a share.

MarketWatch

Lewis e Einhorn: perché è finita e come ricominciare

2009-01-06T13:28:00.000-08:00

The End of the Financial World As We Know It

How to Repair a Broken Financial World

By MICHAEL LEWIS and DAVID EINHORN

The New York Times

La FED rischia la propria indipendenza?

2009-01-06T12:33:00.000-08:00

«John Taylor, who was under secretary of treasury for international affairs from 2001 to 2005, said the explosive growth of the Fed's balance sheet since September was "unbelievable."

"This doesn't really seem like quantitative easing in the sense of finding a growth rate in the money supply," he told a panel discussion during the annual meeting of the American Economics Association.

"What you are looking at now is really being determined by other considerations. How much should we buy of mortgage-backed securities? How much should we loan to foreign central banks? This is really more like an industrial policy," he said.

The Fed's balance sheet has more than doubled in size to over $1.2 trillion in recent months as it has tried to shield the U.S. economy from the worst financial crisis since the Great Depression by supporting key credit markets.

This has included direct purchases of mortgage-backed bonds by the Fed and support for top-rated non-financial borrowers in the crucial commercial paper market, as well as hundreds of billions of dollars lent to banks on the basis of collateral.

"If you have a situation where the Fed is borrowing to invest in all these sectors it seems to me you have a huge governance issue...that demands a lot of thought," Taylor said.

Taylor said the U.S. Congress has a legitimate right to demand a say in who the Fed lends money to. The outcome would be "radical reform" that would risk monetary policy independence, he said».

Reuters UK

La prossima Islanda

2009-01-06T12:18:00.000-08:00

Iceland was the biggest emerging market causality of 2008, but could another country run into similar problems in 2009? Arnab Das from Dresdner Kleinwort considers the outlook.

Ma quanto ha perso Harvard?

2008-12-24T06:27:00.000-08:00

Harvard University's admission that it lost $8 billion from its $36 billion endowment fund, as staggering as it sounds, may grossly underestimate the true magnitude of the loss between from July 1 through Oct. 31 2008. According to a source close the Harvard Management Corporation (HMC), which runs the fund for Harvard, the loss is closer to $18 billion if the losses on the fund's illiquid investment are realistically appraised.

How Much Has Harvard Really Lost?

Italia vs. UK

2008-12-24T06:20:00.000-08:00

"Mamma mia! La crisi finanziaria ci ha reso veramente più poveri degli italiani?
[The Guardian]

«* La perdita di valore della sterlina fa crollare il Pil del Regno Unito
* I trionfalismi sono contenuti visto il profilarsi della crisi in Italia

Fu un durissimo colpo per l’orgoglio britannico, talmente devastante che qualcuno attribuì al sorpasso l’inizio della debacle che avrebbe scardinato Margaret Thatcher dal potere tre anni dopo. Nel 1987 gli italiani, che lo stereotipo vuole caotici e corrotti, annunciarono di essere più ricchi dei britannici malgrado gli otto anni di dolorose riforme imposte dai conservatori.

E indovinate un po’? L’hanno fatto ancora. Proprio mentre molti di noi erano convinti che la crisi economica non potesse peggiorare ulteriormente, ieri La Stampa affermava: “L’Italia batte l’Inghilterra [sic] con l’euro”. Il giornale sostiene che il deprezzamento della sterlina è stato così marcato che il prodotto interno del Regno Unito adesso vale meno di quello italiano. La Stampa ha calcolato che se vengono applicati i tassi di cambio di mercoledì alla ricchezza prodotta l’anno scorso, l’Italia supererebbe il Regno Unito di uno 0,7 %.

E non è tutto. “Per alcune settimane siamo stati mediamente più ricchi”, afferma il giornale. L’indicatore standard di ricchezza è il Pil pro-capite, e anche in quella voce l’Italia è davanti a noi, di circa €900 l’anno.

Per quanto faccia riflettere i britannici, gli ultimi dati hanno l’agrodolce sapore della vendetta per l’Italia, un paese il cui sorpasso fu rapidamente invertito e che, tre anni fa, fu definito “il malato d’Europa” dall’Economist a causa del proprio languore economico. Eppure, ieri, più che festeggiare il loro successo, gli italiani sembravano preoccupati.

Perfino La Stampa ha riconosciuto che “sembra assurdo in un periodo in cui i magazzini sono pieni di merci invendute e la gente non fa altro che parlare di problemi per il futuro”. Anche l’Italia è in recessione e le previsioni dicono che la sua economia sarà in calo l’anno prossimo, anche se in misura minore di quella britannica.

Sorprendentemente, Silvio Berlusconi, il Presidente del Consiglio, non ha colto quest’occasione per dimostrare l’avvedutezza delle sue politiche di governo, e il Prof. Amedeo Panci, il cui centro di ricerche Economia Reale è vicino alle posizioni della maggioranza di governo, ha dichiarato: “Francamente, non griderei al miracolo economico”. Secondo lui è stato un “fenomeno matematico, statistico”. Tito Boeri, professore di economia alla Bocconi di Milano, ha dichiarato che “il grosso problema qui è il potere d’acquisto”. Il fatto che gli italiani, così come altri cittadini dell’Eurozona, si stiano riversando su Londra per fare le spese natalizie dimostra che il calo del valore della sterlina ha provocato uno squilibrio chedev’essere compensato per poter disporre di cifre paragonabili.

“Nel 2007, quando la variazione del potere d’acquisto tra le due nazioni era pressoché la stessa, il Regno Unito era più ricco di un 15%” ha affermato Boeri”. “Poiché l’inflazione nei due paesi è stata più o meno la stessa da allora, direi che per quanto riguarda la parità dei poteri d’acquisto siamo circa allo stesso livello. Temo che la differenza sia sempre lì. E parlo da italiano che vorrebbe sentirsi più ricco.”

Sergio Rizzo, coautore di un bestseller sul graduale declino economico dell’Italia, non pensa che ci sia motivo di rivedere la propria tesi. “Negli ultimi dieci anni, tenendo conto dell’inflazione e del potere d’acquisto, l’economia del Regno Unito è cresciuta di un 55% circa, mentre per l’Italia la cifra è stata inferiore al 29%.” Rizzo ha elencato le ragioni per cui l’Italia è il fanalino di coda dell’eurozona. “La malavita controlla una grossa parte del Sud, e proprio per questo il Mezzogiorno attira meno dell’uno per cento degli investimenti esteri,” afferma Rizzo. “La giustizia è lenta, per cui i creditori, di regola, aspettano dieci anni prima di riavere i propri soldi dalle aziende fallite, e la frase “allora fammi causa” è diventata la risposta universale nei confronti delle richieste dei creditori. La nostra pubblica amministrazione è inefficiente, poco informatizzata e sprecona”.

Tuttavia, Panci pensa che la sorpresa del “ri-sorpasso” aiuterà a puntare i riflettori sui punti di forza trascurati dell’economia italiana, che le potrebbero permette di superare la recessione mondiale meglio d’altri paesi, Regno Unito compreso. “Il nostro sistema bancario, ad esempio, è stato criticato a lungo per non essere abbastanza intraprendente e per avere delle regole troppo rigide. Ma per ora è riuscito ad affrontare benissimo la crisi”, ha dichiarato. Qualche settimana fa Berlusconi ha notato che l’Italia, pur avendo un debito pubblico elevato (in effetti supera il prodotto interno annuale), ha un livello d’indebitamento privato basso, e ciò è dovuto al fatto che, storicamente, gli italiani sono votati al risparmio. “Il debito complessivo è più basso di quello degli Stati Uniti o del Regno Unito - un fatto positivo che dovrebbe essere apprezzato maggiormente”, ha dichiarato. Egli è fiducioso che l’intraprendenza e l’industriosità dei suoi connazionali tirerà loro fuori dalla crisi. Ha dichiarato che sono come le “formiche virtuose”».

REGNO UNITO CONTRO ITALIA

REGNO UNITO

Insegnante €32,206
Dottore €78,140
Infermiera €25,161
Macchinista €41,525
Cappuccino €2.42
Pizza Margherita €6.05
Big Mac €2.20
Borsetta Prada nera €610
Coppe del mondo 1

ITALIA

Insegnante €30,571
Dottore €55,944
Infermiera €23,121
Macchinista €28,760
Cappuccino €2.50
Pizza margherita, €9.00
Big Mac €3.40
Borsetta Prada nera €780
Coppe del mondo 4

Italia dall'estero

Prevedibilmente Irrazionale

2008-12-23T05:50:00.000-08:00

Un consiglio per le letture delle vacanze: Dan Ariely, Prevedibilmente Irrazionale, Rizzoli.

"Tutti siamo convinti di essere razionali. Nessuno di noi lo è. E al contrario di quanto dicono le teorie economiche tradizionali, non siamo capaci di scegliere tra diverse alternative calcolando il valore di tutte le opzioni che abbiamo di fronte. Altrimenti perché ci ripromettiamo tanto spesso di metterci a dieta, solo per veder svanire il nostro proposito all’avvicinarsi del carrello dei dessert? Perché ci ritroviamo ad acquistare oggetti che non vogliamo solo per avere un omaggio che non ci serve? E perché dopo aver preso un’aspirina da un centesimo continuiamo ad avere mal di testa, mentre ci passa subito se la medicina costa cinque volte tanto?

Dan Ariely, uno dei massimi esperti mondiali di economia cognitiva e comportamentale, è convinto che noi non siamo solo irrazionali, ma che lo siamo in modo prevedibile: ovvero in situazioni analoghe tendiamo a seguire gli stessi, tortuosi, percorsi mentali. E a operare scelte che nulla hanno a che vedere con la logica.

Ariely, ustionato in un attacco terroristico, ha dovuto subire le conseguenze delle “decisioni irrazionali” prese dalle infermiere che gli strappavano i cerotti. E proprio partendo dalla sua esperienza dimostra, in una carrellata di esperimenti divertenti e sorprendenti, che siamo animali più emotivi che ragionevoli. Dal sesso agli esami di matematica, dal sorseggiare una birra all’acquistare libri su Internet, ogni gesto che facciamo è soggetto all’azione di forze diverse: emozioni, aspettative, relatività, norme sociali. Certo, capire in che modo il corpo e il cervello che crediamo di conoscere funzionano “a nostra insaputa” non farà immediatamente di noi algidi e astuti calcolatori. Ma ci aiuterà almeno a sfuggire ad alcuni dei nostri più clamorosi errori quotidiani, soprattutto quelli indotti da chi vuole sfruttare la nostra prevedibile irrazionalità".

The Madoff Economy

2008-12-22T17:24:00.000-08:00

The Madoff Economy by Paul Krugman

Il patrimonio della FED post Lehman

2008-12-20T10:16:00.000-08:00

Nella tabella qui accanto gli effetti del fallimento della Lehman sul patrimonio della FED. Da notare la ricomposizione del patrimonio con la discesa dei titoli di stato e l'importante aumento della dimensione complessiva.

La freccia grande indica il fallimento di LEH.

Banque du Canada

Lehman and Federal Reserve Assets

Quant'è dura liquidare Lehman!

2008-12-20T10:09:00.000-08:00

The Man Who Is Unwinding Lehman Brothers

One Benefit of Recessions: Exposing Madoffs of the World

2008-12-20T10:05:00.000-08:00

Il Dopo Madoff potrebbe avere anche degli effetti positivi secondo Phil Izzo

«One Benefit of Recessions: Exposing Madoffs of the World

The financial crisis may get to take credit for the downfall of Bernard Madoff, and more scams may come to light as some of what John Kenneth Galbraith called “the bezzle” works its way out of the system.

A bigger contributor to the bezzle than Galbraith could have imagined. (European Pressphoto Agency)

In his 1954 book “The Great Crash of 1929,” Galbraith wrote, “At any given time there exists an inventory of undiscovered embezzlement in — or more precisely not in — the country’s business and banks. This inventory — it should perhaps be called the bezzle — amounts at any moment to many millions of dollars. It also varies in size with the business cycle.”

Galbraith said that in good times (he was discussing the 1920s but it applies in the case of Madoff in the early 2000s) the bezzle grows by a combination of greed and more lax oversight. But “In a depression all this is reversed. Money is watched with a narrow suspicious eye,” he said.

Diminishing trust is bad for bank lending and the movement of credit in the economy, but it is a boon for ferreting out embezzlement and other financial crimes. “Should the American economy ever achieve permanent full employment and prosperity, firms should look well to their auditors,” Galbraith wrote. “One of the uses of depression is the exposure of what auditors fail to find.”».

WSJ.com

Gli hedge funds e la due diligence

2008-12-19T06:11:00.000-08:00

Dopo Madoff gli hedge sono sotto accusa per non aver affettuato una approfondita due diligence.

Ecco cosa ne pensano John Hempton e Robert Peston.