L'Italia (e il Regno Unito) fatica(no) a collocare le proprie obbligazioni

The UK and Italy struggled to sell bonds on Thursday in a fresh sign of the difficulties governments are facing because of the debt needed for economic stimulus packages and bank recapitalisations.

The two bond auctions saw both governments forced to pay higher yields to attract investors and Italy scaled back the amount on offer.

Analysts say it is an "ominous" warning that debt raising is likely to become even tougher in the coming months if problems are emerging so soon after government announcements to increase issuance. A record of more than €1,000bn ($1,290bn) of debt is expected to be issued in Europe next year.

Significantly, the bond auctions were for shorter-dated securities, usually the most sought after.

Roger Brown, global head of rates research at UBS, said: "The UK auction was dire. I do not remember one as bad for shorter-dated bonds. It is an ominous sign of trouble ahead.

"It is surprising to us that the UK Treasury should encounter such weak demand for a four-year gilt in only the second auction since Monday's pre-Budget report, when record levels of issuance were announced."

Giuseppe Maraffino, fixed income strategist at UniCredit, added: "The Italians ran into difficulties because of the lack of liquidity and investors. People are worried about the large amount of supply and the general environment."

Both the UK and Italian governments had to offer an extra 10 basis points compared with similar existing debt to entice investors to sell £3.75bn in four-year bonds and €1.4bn in three-year bonds respectively. The Italians also raised a lower amount than expected because of worries over weak demand.

Analysts emphasise that expectations of interest rate cuts in the UK, Europe and the US are supporting the bond markets and keeping yields historically low. For example, 10-year gilt yields this week dropped below 4 per cent for the first time since records began in 1961.

However, with economies contracting, lower tax receipts and rising benefit payments mean countries could face higher debt servicing costs as overall debt levels rise.

Among European countries, the UK and Italy may face the greatest difficulties because of their large debt programmes. The UK announced plans to raise an extra £37.4bn ($56.5bn) in gilts this year in the PBR.

This takes the overall total to £146.4bn – an all-time high and nearly three times the amount raised in 2007-08. The Debt Management Office forecasts bond issuance remaining high, at an average of £135bn a year, until 2013.

The Italians are forecast to issue up to €220bn in bonds next year, with €100bn in redemptions in the first half of the year – about €20bn higher than usual – putting the government under greater pressure to raise money.

UBS has warned that Italy's large debt burden of 103 per cent to gross domestic product – the highest in the eurozone – is unsustainable, forecasting it will rise to 107 per cent by the end of next year.

FT.com

Porsche: vendite in calo

Outlook: Porsche also affected by the general downward trend

Porsche Automobil Holding SE expects a significant drop in sales in the current business year 2008/09. The signs of a severe decrease in demand in the automotive industry are unmistakable the world over, and it is virtually impossible to calculate further developments particularly in the USA, Porsche's largest single market.

Porsche will hardly be able to escape this downward trend, so that currently we do not assume that we will be able to repead the high total sales of the previos business year. This is indeed borne out by revenue and sales figures in the current business year from 1 August to mid-November 2008, which indicate that turnover in the first four months of the business year 2008/09, that is up to 30 November 2008, will be slightly above two billion Euro following 2.36 billion Euro in the same period last year. Sales show a similar development, amounting to 25,200 units after 30,700 units year-on-year. The exact figures for the first four months will be published by Porsche in the Interim Report due in mid-December 2008.

Porsche.com

Nessun skateboarder nella stanza dei bottoni

«An Economist piece about incoming Treasury Secretary Tim Geithner explored Mr. Geither’s background in the Clinton Administration and his experience handling crises. But a number of blogs were more interested in a middle paragraph that that discusses Mr. Geithner’s youthful appearance and fondness for naughty words. It also notes that he snowboards and has tried skateboarding. The description prompted the Daily Showblog to correct an earlier post that described Mr. Geithner as “boring.”

A skateboarding Treasury secretary would indeed be something special. However, a Fed spokesman said yesterday that, in fact, Mr. Geithner doesn’t actively participate in skateboarding.

It was disappointing news, at least to this old skater — and probably a lot of others. You see, surfing and snowboarding have their government officials. Sen. John Kerry has been seen snowboarding and Hawaii State Sen.Fred Hemmings is a surfing legend. President-elect Barack Obama is known to bodysurf, which isn’t exactly surfing but surfers were still stoked .

We couldn’t find any skateboarders, at least active ones, in national office (we couldn’t find a survey). Best we could find was Tom Miller, who is indeed a ripper, as well as chief of staff for Portland, Oregon, Mayor-elect Sam Adams.

There are some theories as to why surfers and snowboarders have outdone skaters in seeking political office. Surfing and snowboarding tend to cost more, and this may act as a social filter.

Also, a lot of people start surfing and snowboarding in middle age. It’s certainly possible to pick-up skateboarding later in life, but few adults can stomach the time and pain commitment that learning skateboarding requires.

So it seems skaters will have to wait a bit longer for the first skateboarding Treasury secretary. Change can only happen so fast».

Real Time Economics

Pandit si giustifica (senza convincere)

Da Reuters.com

«Citigroup Inc Chief Executive Vikram Pandit on Tuesday blamed prior management for diving too deeply into real estate, causing losses that led to this week's massive government bailout of the second-largest U.S. bank by assets.

"What went wrong is we had tremendous concentration in the sense we put a lot of our money to work against U.S. real estate," Pandit said in an interview on PBS' Charlie Rose show. "We got here by lending money, and putting money to work in the U.S. real estate market, in a size that was probably larger than what we ought to have done on a diversification basis."

The government late Sunday rescued Citigroup by agreeing to shoulder most potential losses from a $306 billion portfolio of risky assets, and by injecting $20 billion of new capital, in its biggest effort to prevent a large U.S. bank from failing.

Citigroup has lost $20.3 billion in the last year, and many expect further losses from credit cards and other areas tied to the global economic crisis to pile up.

Since closing Friday at $3.77, Citigroup shares have risen 61 percent, and closed Tuesday up 13 cents at $6.08 on Monday. They have nevertheless tumbled 79 percent this year, after closing last year at $29.44.

Pandit said in the interview that short-sellers, as well as investors worried about Citigroup's asset quality, were among those who drove the bank's shares down in recent sessions, and that it was important "that we got control of the situation."

"I can completely understand how people on Main Street, people who are not close to this industry, would be furious at what's happened," he said.

Some wealthy investors have begun or pledged to begin buying Citigroup shares.

A Mexican brokerage controlled by Carlos Slim, one of the world's wealthiest people, spent about $150 million to buy nearly 29 million Citigroup shares between Nov 19 and Nov 25.

Meanwhile, Saudi Prince Alwaleed bin Talal last week said he plans to boost his stake in the bank to 5 percent from less than 4 percent».

Altri 800 miliardi dalla FED

«The Federal Reserve, in another massive life-support intervention for the U.S. financial system, on Tuesday announced a $600 billion program to buy mortgage-related debt and securities and a $200 billion facility to support consumer debt securities,

The U.S. central bank said it would buy up to $100 billion in debt issued by Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, the government-sponsored mortgage finance enterprises.

The Fed also said it would buy up to $500 billion in mortgage-backed securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae.

The move is intended to strike at the heart of U.S. economic woes, the collapsed housing market.

"This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved financial conditions more generally," the Fed said in a statement.

The central bank also launched a $200 billion facility to back consumer loans, including student, auto, and credit card loans and loans backed by the federal Small Business Administration».

Reuters.com

Modiano analizza la crisi

Su Il Sussidiario.net una interessante analisi di Pietro Modiano circa le ragioni della crisi finanziaria.

«Qual è allora la sua interpretazione?

La genesi è dovuta a un eccesso straordinario di liquidità creatosi dopo l’11 settembre e col fatto che negli Usa si tendeva a favorire l’indebitamento delle famiglie a scopo anticiclico o addirittura sociale. La somma di grande liquidità e basso rischio ha prodotto una riduzione dei tassi di interesse e un’abbondanza di credito in tutto il mondo che ha fatto del gran bene al pianeta. Però i bassi tassi di interesse hanno messo in condizione le banche di non guadagnare abbastanza per capitale impiegato e hanno generato nelle banche la tendenza a vendere i propri rischi di credito e a comprare rischi di credito altrui, attraverso strumenti derivati o altro, comunque credito trasformato in titoli. Questo ha prodotto, a parità di assorbimento di capitale delle banche, un’assunzione di rischi di credito enormemente superiore a quello che ci sarebbe stato in assenza della leva.

Più delicato è il tema delle “responsabilità” di malfunzionamento individuale o sistemico…

L’utilizzo degli strumenti di finanza sofisticata è stato un comportamento certamente razionale da parte di ogni singolo banchiere, e ognuno aveva il dovere di utilizzarlo perché era un modo legittimo, nell’era dei bassi tassi di interesse, per produrre reddito per le proprie banche a parità di capitale. L’effetto sistemico si è rivelato devastante quando si è capito che il mercato non dava i segnali giusti sui rischi di credito: il mercato, fino a quel momento, non aveva mai “segnalato” l’eccesso di credito. Lo ha fatto con una catastrofe.

Come e quando è accaduto?

Quando un americano di troppo ha deciso di non rimborsare il suo mutuo – o di rimborsare i prestiti meno di quanto previsto: e allora tutti i portafogli di credito hanno visto ridotto il loro valore, compromettendo il poco capitale delle banche che in essi avevano investito. Questo ha prodotto un effetto domino. Fin qui non c’è stata una cattiva volontà del bancario. Poi si può anche dire: “avete spinto i ritorni sul capitale di ogni singola banca troppo avanti perché avevate le stock options…” questo non spiega però il problema principale: perché, di fronte all’eccesso, il mercato non ha dato i segnali propri dell’eccesso?

Qual è la sua risposta?

Nessuno individualmente ha capito che si era di fronte a un eccesso. Perché non è emerso è il problema vero. Un mercato super efficiente come il mercato finanziario, se non produce prezzi che segnalano e danno la misura dell’entità delle tensioni in campo, presenti e future, è un mercato che non funziona. Ma questo significa negare in radice la teoria economica sulla quale abbiamo messo in piedi il mondo che conosciamo degli ultimi venti, forse trent’anni. Ed è un problema serio, quello sul quale più mi interrogo. Vuol dire che sul mercato che, nella storia, più si è avvicinato a quello della concorrenza perfetta, per disponibilità di informazioni, numero di operatori, dimensioni e strumenti i prezzi “non hanno funzionato”».

Citi: quando il risk managament è colluso

Sul New York Times è apparso un articolo qualche giorno fa nel quale viene messa in luce l'inadeguatezza del sistema di risk management di Citigroup. Il ritratto che ne esce è davvero impietoso.

Citigroup Saw No Red Flags Even as It Made Bolder Bets

La rabbia di Barry

Barry Ritholtz nel suo blog The Big Picture esprime stamani tutta la sua rabbia circa il piano di salvataggio di Citi.

Citi Bailout

Anche la stampa inizia a risentire della crisi

Negli USA le spese pubblicitarie hanno subito un calo del 20% nel settore del lusso, imponendo agli editori importanti tagli di costi.

NYTimes.com