September, 2007
You see the articles of Euribor corresponding to the month In September, 2007.
Why suddenly do the things begin changing and a crisis comes?. A question as simple as this one has brought from head the economists for centuries without coming to a conclusion. If you ask an economist what last year happened, he will answer it to you with all details luxury, but if you ask him what will happen the one that comes possibly will say to you that equal or better than this, but without to have really it does not even design.
It usually say that the best way of looking at the economy is in a simplest way and is as well as our readership “Dinky“ and “Zanshin“ came to the experimendo of the babysitters (original of Paul Krugman) and that he explains in a very simple way why of the recessions. You can read the original article here, although I beat you the summary realized by one of our readership.
- A group of neighbors establishes a coupons system to do of kangaroo of the children of other neighbors.
- Every neighbor has 10 coupons and whenever he wants to go away of holiday, gives a coupon to the neighbor who takes care of his children.
- In principle, this should balance; every neighbor can go away of holiday a few times and remain of kangaroo others.
- Nevertheless, a few neighbors one night decide that instead of going out, better they continue being done of kangaroos, to have more coupons for special occasions.
- As these neighbors accumulate coupons, some another neighbor sees that it is remaining without coupons and begins stopping going out to increase his coupons reservation.
- Little by little, more neighbors are accumulating his coupons and do not go out not to lose them and more neighbors remain with few coupons. Those who have gone out more and they have few ones, adopt the strategy of remaining at home and of accumulating coupons. Nevertheless, since the rest does the same, in the end nobody goes out so anybody needs kangaroo and coupons cannot be obtained.
Since you see, the situation is quite similar to the current one, with added of that if now you remain the coupons, give you more interests to have them at home not as earlier, that the coupons were losing value little by little.
Anyhow, we do not have to worry for the interests of our coupons since the one that takes the accounts of the president of the neighbors' community has said to us that The euribor there is “touched roof” and is “on the verge of falling down”, perhaps have some type of confidential or drunk information of crystal to dare to predict what nobody knows or perhaps he needs to pay the area for the next elections between neighbors.
In this environment the banks that "helped" the neighbors to have house, need to finance his big corporate operations and it is like Five Days it has titled the last offers of the Caixa and The Bank of Santander: To sell a comb to a bald person.
And meanwhile, the Dutch has to come change comes undone:
ING Direct has turned into the big lender of the banking, as he makes sure today some mass media in our country. The Spanish branch of the Dutch bank would be obtaining big benefits with this one operative, due to the strong types that are paid in the interbank one (concerning 4,7 %). According to the Confidential one, the Dutch entity is taking advantage of the imbalance that exists between the strong money demand on the part of several entities and the scarce disposal to be big enough his of those who have liquidity in abundance, for the suspicion that reigns on the market. ING is in the latter group thanks to the enormous liquidity that it hoards in his accounts and orange deposits. According to the last available information (closing of the first semester), the branch Spaniards of this entity is provided with 13.000 million euros in deposits of saving proceeding from million and a half Spanish clients, what it places to him in the eighth position of the ranking of entities that operate in our country (Route was Investing)
But we all do not complain since the big ones also suffer for the Euribor, if not that say it to Colonial Group and Reyal Urbis who pay 400 million euros of interests a year for his credits.
Not only the families sweat with the Euríbor. To the real estate sector it weighs him increasingly to load with the mortgages acquired in the last years and to support his growth rhythm. The clear financial debt of the quoted companies overcomes 28.398 million euros while his value in Stock Exchange is today 30 % less than nine months ago. The debit already promotes 92 % of the whole of the capitalization of the sector (30.426 million euros).
Good weekend to all and I will be updating the article as new news is going out.
Written by Carlos Lopez on September 28, 2007 with 85 comments
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Today it is a Thursday, September 27, 2007, still 2 working days stay to finish the month, to see the quotations of the Euribor and to be able to calculate the exact average of the month. Nevertheless they are wanted to move forward the means to the news and publish the holder, in this case it touches The Country with “The Euríbor raises 4,72 % in September” beginning the news with a tone lightly alarmist:
September also. This will be the 24th consecutive month of increase of the mortgages that are indexed to the Euríbor, the principal reference of the loans to buy houses. The mortgage Euríbor raises 4,72 %, with what it reaches his highest level from December, 2000. It will be noticed in the pocket by those who are going to check his mortgage with the fact of this month, which the Spanish Bank will make official in the middle of October.
Since you see, there is many desire of speaking on the Euribor, on it overwhelmed that we are the Spanish and on the expensive thing that is putting itself quite and stranger to see the rapidity with those that he publishes in a related way to the government (or already not?) 
In another order of things and seeing we well that is carrying the bag these days thanks to the expectations of which the FED keeps on lowering types do recurrentemente the following question to ourselves: Has been the descent of types of the FED a good idea?, we it will not know up to past a time but if we can speculate. Fortunately in the Expansion blog they give him a return to the matter:
For the analyst of Financial Times, John Authers, the decision of Bernanke might hide a perverse effect for keeping on fattening “bubbles“ in different sectors that were leading to a major crisis in the future, instead of choosing for an accuracy, severe and with managerial victims ahead, but necessary. The analyst of BusinessWeek, Vitaliy N. Katsenelson, coincides in criticizing this week on the pages of the American weekly paper the position of the FED. To his judgment, there were the clippings of interest rates of 2001, and the maintenance of a few these at very low levels for the long time, which provoked the current crisis, fruit of the overvaluation of the prices of the real estate sector in the USA.
Looking a little for the press at rose - salmón-amarilla, we come as always to Cotizalia with the following holder Vientos of crisis: every housing that stops being constructed will destroy two work places. Which makes us reflect about the famous prick of the bubble, practically we want all that they become stable the price of the apartments or even go down, that the speculators and corrupt politicians go out of the sector, but: at what price? paying a crisis in return?
Important update:
The prices of the secondhand housing fall down in Madrid, Barcelona and Valencia in the third trimester.
For Jesus Encinar, manager of idealista.com “the information pconfirman that the descent of prices of the housing used in Spain is not anything punctual of any areas during the second trimester but it is a new tendency that has begun in 2007 on all the markets”.
Written by Carlos Lopez on September 27, 2007 with 107 comments
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Before the last news on mortgage crises, types descent in the USA, stagnation of the economy, etc. All the events happened for one month would indicate us that we are before a stage in which the Euribor should go down opposite to the forecasts that we had it does a pair of months, but there we have him, so comfortably in 4.7 %.
The reasons are great and not all easy ones to explain since the interbank market is not so simple as to borrow money to the BCE, it to help us to understand, Expansion tells us that The tension in the interbank one puts the euribor under pressure, of which I rescue the following paragraph.
The euribor to three months is where better the tension of the market is reflected, in expectation that the BCE realizes this week the monthly refinancing operation with expiration to three months. Also one hopes that the Central Bank of England should carry out the injection for 10.000 million pounds sterling announced last week, after the polemic rectification of his politics before the crisis.
The BCE awarded yesterday the refinancing auction with expiration to seven days that it realizes weekly, according to the habitual needs for liquidity of the financial institutions of the Euro area.
The awarded amount promoted to 190.000 million euros an average type of 4,29 %, much over 4,16 % of the previous week, what reflects the enormous existing demand on an interbank market that seven days ago received 155.000 million euros of the institution, and that was claiming for this week a whole for 368.995 million euros. 190.000 million euros suppose an extra injection of 37.000 millions with regard to the targets marked Monday by the BCE.
I know that the question is complicated, but …: Do you see any reason more?
Update: It raises 4,5 % (per year) the amount of the mortgages of housing but it lowers 2,8 % the mortgaged housings
As for the market of the housing, we meet two contradictory news, whom we ask …:
Written by Carlos Lopez on September 26, 2007 with 125 comments
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This time the soap opera neither comes to us from Venezuela (with difference half an hour) it nor treats about an affectionate triangle we nor know if there will be treacheries for way but what if that exists is great pasta in game. As well you will remember, when the English bank Northern Rock went away apeak his president he mentioned that there were 3 Spanish banks in delicate situation (nobody had wondered it and there was no information), later they denied it and the matter closed.
Now the rumor comes to us from that Miguel Angel Fernández Ordoñez (Governor of the Spanish Bank) has commented to him to Country houses (MINT): "The bankers say to me that there are three boxes with problems …”, to which Quintas answers “Since they have told me that there are three banks that are badly …” you already see on what they comment in the high spheres.
“It is a question essentially of a problem of liquidity, not of solvency”, makes sure a source of the sector, “ligature to the grade of indebtedness acquired on the capital markets for every institution. Here there has taken place a brutal growth of the assets, which it was not possible to have financed with the reception of sufficient debit in the territory of every entity. It is not necessary to put names, because they are in the mind of all. Who were the first ones in extracting emission of preferable? This emission has now a few expirations to that it is necessary to attend, and is what provokes the liquidity difficulties”.
So the question (again) is: Can recur the ‘case Northern Rock’ in Spain? fortunately the same question it has been done in The Economist to several experts and at the moment the answer is quite soothing:
“The way of work of Northern Rock is different from that of the Spanish banking. It is a question of a bank specializing in mortgages that does not receive deposits of his clients as principal activity. To finance the above mentioned mortgages it was resorting to loans on the interbank market, and it is there where it has eliminated the liquidity”, mentions Susana Felpeto, analyst of Cardinal Atlas. Also, this entity was giving mortgages for 125 per cent of the value of the building, an unthinkable fact now in Spain.
So now when we already know the answer of the "experts" I would like to know yours. Do you believe that the Spanish banks have been right in the duties the latter years?
Written by Carlos Lopez on September 25, 2007 with 90 comments
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For us, simple mortal that of the whole life we know that the things are bought by money and if you do not have it you borrow it, hearing speaking about the futures market and derivatives, risk coverages, Warrants and other financial instruments us sounds undoubtedly to something very professional that the people use engominada and with suspenders. Perhaps the same people have wanted to complicate voluntarily this financial world to create an entry barrier and to protect his status and jobs. But in the fund, if one is the sufficiently curious thing and takes a simple calculator (nothing of financial calculators or spreadsheets), he realizes that certain financial products with resounding names allow us to extract major yields to our savings that the traditional funds.
Such is the case of the futures, used for hundreds of years for the farmers to protect his harvests, the dealing is simple, I buy to you now at a fixed price the harvest of the next year, with which you guarantee the salary it rains or not. With the years this concept has evolved very much and has taken to the stock market, in such a way that one can sell actions that it does not have. This way we could see it in the offenses of 11-S since Al-Qaeda sold previously actions of airlines (or petroleum), to buy more sales after the above mentioned date (with which there remains of benefit the difference between the sale and the buy).
This roll comes to collation of the last article of titled cotizalia The new ‘futures on housings’ they predict the biggest depreciation in the History of the USA, as you see, we have gone on from futures on orange juice, to futures of actions and to futures on housings. Here we extract two conclusions, the first one is that in the USA they walk enough worried by the real estate topic and the second one, the fact is that even in epoch of descents of prices of assets, anyone can stuff himself (in fact, the descents usually take place more rapid than the increases). On the other hand, if we look here, Trichet admits similarities but it marks distance between the real estate market in Europe and in the USA.
If we choose to invest in American funds, we meet the problem of that the possible benefits us go away with the constant bent the dollar, nevertheless We can always Cover the risk of change as us they count in Five Days.
But let's be realistic, we are speaking products for the people who has savings and as they tell us in The World, here we are Indebted to credit blow.
The debt for credits to the consumption, between which they emphasize credit cards and rapid credits, already represents 27 % of the entire debit of the hearths, according to numbers of the Spanish Bank. The granted money of this form raised 17 % between 2006 and 2007 up to 93.000 million euros. A climb motivated by the increase of the mortgages, which forces the consumers to finance increasingly his buys
You already see the dangerous thing that puts the matter, credit card shot because I cannot pay the mortgage. And I wonder: would not it be easier not to spend so much? how many of your expenses are redundant?
Update: Interesting Comparador of Investment funds
Written by Carlos Lopez on September 24, 2007 with 62 comments
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