The week in the markets (6-13 Nov)

Personal comment.

On Friday the markets seemed to launch a feeling of strength: General Motors touched historic lows and reported that without government help would go into bankruptcy and unemployment in the U.S. grew in two months in more than half a million people and yet the stock market rose. However, if one takes into account that since 1896 he had never lost the Dow Jones in the three days of a presidential election, which the lower SP on Wednesday and Thursday together is the biggest in two days since 1987 and that the rebound technician, was lowered after so much with little volume, and could give an explanation and feared it was an exception to the trend weekly. The large package of measures the Chinese government at the weekend ($ 600 billion is the fifth of GDP, "it will be another and a few cartridges) extended this positive feeling in Asia and Europe on Monday morning With the exception of Ibex. There are over the joys until the afternoon of Thursday in USA.

The bank Santander on Oct. 28, at the mouth of its CEO Alfredo Saez, refused to need more capital. On November 10 announced an expansion. In these few days has been convinced of the impossibility of selling the Bank of Venezuela, the assets in ABN shares, Cepsa, which manages the funds and insurance, at the price demanded. In short, you have bought unsold before and now has been found with a liquidity problem ... (safe somewhere caught in a mortgage-bridge that sounds something) and the expansion is costing him all shareholders in market capitalization million euros. And serve to illustrate what is happening with the economy and that makes this crisis unique: no matter how much lower interest rates, including the Euribor, if that cheaper finance is not paid and if there is interest in using this possible liquidity to invest. Until Santander wants to sell assets and unable to do so raises the liquidity of its shareholders or tries to tap new. Santander can do that but, how many companies can do the same, how much they will get lower financing rates?

I attached two charts USA, with shaded on the cycles of recession, one is the unemployment rate in the U.S. and its forecast to reach 8%

This is another of the ISM manufacturing index:

In Spain the situation is similar, we have known in the past economic data and much worse if we do if the figures do not even bank bad debt is still worrisome (http://www.economistas.tv/la-morosidad-oficial-no- is-so /) As can be seen in other economic cycles figures have been more hopeless, it could be a cyclical crisis and give more reason for the optimists who think they can get out of it in months. But it is necessary to recover the credit market, without that status data will continue to deteriorate and, as we have seen this week, the suspensions of payments that began in financial, went to banks and then to insurance companies, will reach shops and industrial companies.

And that perception is reversing in the economy and stock markets, the beneficial impact of lower interest rates. If we add to this the fact that I commented on the need to sell assets as they lose value to dispose of cash, accounts for the balance of the week. The best quality of the bag-your-liquidity is now one of the biggest obstacles to the upward trend because it is one of the few markets to resort to if you need cash, even at the level of citizens is easier to sell shares even though much is lost to try to sell some other property. As positive aspects of this bad stock market week, two factors: the low volume on downhill (although it can mean that we are still far from the capitulation of course also of the soil) and the finding by the Telecoms sector as a refuge-of-date valid. Now we have to have faith in the famous meeting this weekend but particularly in the aspect stock market got more faith in the possible manipulation of the bullish effect by next Friday 21 to the expiration of some futures (which is the Ibex) and options almost all indices. In fact, statistically the next week is a pretty favorable to the stock exchanges.

Finally, it is very remarkable, despite a rebound from yesterday evening, the lower crude (although the effect of the weakness of € and other causes less understandable its effect on the price of a liter of fuel is less noticeable) of gas natural and generally of all raw materials. This is no longer seen as something positive on the stock exchanges because it's getting a lot of problems in economies where there are a lot of money invested ... the prime example is Russia. You may see manipulative maneuvers to prevent the oil-icon of all raw materials-stop-down and personally I hope to make a speculative-operation in a possible rebound in oil prices and gold. (Continue reading ...)

Droblo written by the November 14, 2008 with 337 reviews
Read more articles on Euribor.

The week in the markets (31 Oct - 6Nov)

Personal comment.

After the miracle that was expected (and confirmed) this week, which is called a black and Hussein Obama becomes president of the USA (another miracle is that she does), I received news of aid from our government the mortgage and I thought if there were any other one this week and the government would have done if we are from here when called for direct aid to the people. But I am afraid that has not happened: the government first decided to deny the crisis and support the banking industry after a series of measures hardly justifiable to the alleged strength of our financial sector. Now they have submitted results boxes and banks and profits have continued to be astronomical (if they are not means that aid has not been a change of transparency, still missing that no entity in Spain this loss when there are solutions in other countries more solid than ours) decide to "help" directly to individual mortgaged helping them go through this slump. But once again become a more aid for banks to the public. I think in the forum has already been felt all the opinions on this subject and I must also say that very acutely so I just want to emphasize again that the prevailing idea is something like: "We are in the worst of the crisis, guaranteed deposits until 2010 and helped the mortgaged two years and then with the revival that will fix everything is "What will happen if those unemployed after a two-year moratorium can not find work? For this reason there is no response.

Of course it is desirable that all this is a bad streak but most cyclical of time this seems far removed from reality. The numbers continue to decline week to week and what is valued as improvement may simply be adjustments after a very sharp. Fixed in this original graphic where we can see how it appears the trend for banks to borrow from the Federal Reserve is changing, but if we compare with other periods in which there is not even needed to resort to the EDF, it is easy to appreciate the level of banking crisis of the USA and alejadísimo that this is settled:

I do not see any signal that enables believe that this crisis will last only a few months. E insist not to confuse the bag (which may well bounce for a few weeks as he was bouncing a few days) with the real economy. The macro data are disastrous, unreservedly and hope that the lowering of rates might change, whether justified or not-only be realized within several months, and that if this drives the rebate credit. If not, only reduce the benefits of saving without encouraging the activity to the investor. And the worst thing is that the states are running out of room for maneuver as in Spain itself has acknowledged Solbes (http://www.elpais.com/articulo/economia/Solbes/dice/habra/recursos/afrontar/crisis/elpepueco / 20081105elpepieco_6/Tes)

Turning to the bag, the idea of "This is a pothole, a historic opportunity to buy, but months back in the upward path" is being installed. And yet this week (except in Europe, from Thursday to Thursday-closed flat, with some better rates and other worse) has come to a negative balance. And that if we look at the percentage rise since we have been minimal, is notable because the descent was very sharp. And was the upward trend in November and the maximum rise (Tuesday) after a day of low volatility (Monday). But neither with the help of central banks has been with the resistance led by commenting two weeks ago and is still stuck in a dangerous area. The Dax rose well above 5000 but has been unable to keep them in the SP and the arrival in 1000 has been the perfect excuse to very aggressive sales. The Dow and the Ibex nor have approached the 10 mil ...

The fear is still there as we saw on Wednesday because although statistically markets operate best on the day following the victory of a Republican than a Democrat the truth is that it should have been positive that the forecasts were met and there were no surprises, however these As of last week to buy the rumor and sell the news is becoming a habit and this caused a deep bearish movement. As I commented last week, while there are rises in quiet but there are a lot of threat falls hurry to sell. And he has returned to fulfill. However, I detect many voices that speak of buying in the fall of the year-end rally is possible .... I remain neutral and to envy to keep clear at these levels because I keep seeing danger to both sides. Today it is known the figure of unemployed last month and is feared to be disastrous, most of -200 thousand. As a curious statistic you remember that it was not a bad figure since March 2003, just the month in which he died the previous bearish trend and started the bull that ended in the fall of 2007.

And with regard to the Euribor, a point: that is truly novel now has one year deposits in financial institutions and which are due before 2010 and thus are guaranteed by the state, giving a return similar to the cost of a mortgage. It seems to me that an abnormality was corrected when 2009 arrives and there is much need for liquidity in the face of squaring balance at the end of the year. The Euribor rate comparing to a year with the intervention to 14 days of the ECB should better compare the returns offered by your bank for a year and what you pay for mortgages at that same bank and verify that the differential is not so much . Not to defend the banks with this, just describe a reality, the battle to capture a liability is so great that the differential between what it receives a customer with money and what they should pay that money for a mortgage is minimal. One consolation: yesterday in U.S. rates were at 1% and libor to 12 months to 2.84 (a 184% more), here had to 3.25 and the Euribor to 12 months to 4.70 (a 44.62% increase). But much remains could be even worse ...

(continue reading ...)

Written by Droblo on November 7, 2008 with 295 reviews
Read more articles on Euribor.

The Economics of Homer (II)

Some economists argue that bureaucracy and the public sector has a very strong tendency to increase their budgets beyond what is considered efficient.

I do not know your work, but mine have cut costs wherever they can, in travel, meals, recruitment, office supplies, telephone, Christmas (yes, it is already here!), And so on. Should we not demand the same from those who are managing our taxes?. Ojo, I do not speak at the official, speaking on a strategic level and move toward smart spending, leaving the studies of the degree of hybridization between the common quail and the Japanese quail for better times.

So after this pataleta by the waste of government to step in the press briefing a day that passes the American elections, touching look at the economy of truth.

• Trichet would lower rates today by 0.5% (at 3.25%) and place them at 2% in 2009
• Ordonez estimates that banks can absorb up to 9% of delinquencies
• Bankinter contemplates returning to some customers for losses by Lehman
• Wall Street slows dry after the End of the Obama effect rebound?
• Industrial production suffers the second largest drop in 15 years
• The boxes prefer to pay exorbitant rates before they go to the bottom of the Government

Written by Carlos Lopez on Nov. 6, 2008 with 282 reviews
Read more articles on Euribor.

Money

In certain historical moments, like the current financial crisis, one can question the value of money and economic system in general. This is not new and has happened in many eras and countries since the invention of coins. The other day, a friend of mine (Ivan, I owe you a Brave) sent me an interesting excerpt from the book "The Money" by John Kenneth Galbraith, it says the use of cigarettes as currency in postwar Germany. This is the text interesting.

As the disabled were largely as a medium of exchange in Germany after 1945 began, as always, to use substitutes. More specifically, there was a return to one of the classics of yesteryear currencies, namely the snuff. This could be taken now in a very superior. Instead of the road passing torpemente hand in hand, or sometimes suspect's certificate store, was the newly coined and standardized cigarette. It was the equivalent, in all aspects, from a reputable currency. The loose cigarettes and small change was an excellent package of twenty cigarettes or carton of two hundred multiples were appropriate for larger transactions. The decimal form was changed, but not to the point of presenting math problems.

Few forms of money have been more difficult to forge. And none had as great a tendency to self-value. If the value in exchange for cigarettes tended to go down, that is, if the offer was too big and the price of products exchanged for cigarettes was too high, the owner of this currency fumársela might prefer to put it into circulation. This would have the effect of reducing supply and sustaining value. There were some abuses by collecting cigarette butts and "recycled" in new coins of lesser value. In 1946, in the toilet of the office of General Lucius Clay and other senior U.S. military officials had a sign in German: "Do not throw cigarette butts in the sink." One soldier, who had observed the diligence with which they were wanted for "Recycling", he added at the foot of the sign this explanation: "It is difficult to moisten and smoking." However, this could easily recognizable currency lower and was only accepted with an appropriate discount. The instinct of the early American settlers, in the sense that the snuff was an admirable way of contrast, was strongly confirmed by the experience of the Germans after WWII.

As you can see, this secondary market of the money was governed by the same laws as the official currency markets, with the ubiquitous law of supply and demand and even with changes in the exchange rate due to variations in liquidity (or if there were many few cigarettes).

Looking for information on the book curiously I meet another friend of mine what another says in his blog, reaching these conclusions on the money of which you do a summary.

• It is clear that the task of governing the money attracts a very low level of talent.
• The disability is protected by the fact that almost never blamed the failure of those responsible for it.
• As in diplomacy, a conformist, a good tailor and the ability to articulate the topic of financial fashion, has contributed more to hit a mentality that overly inquisitive.
• In the government's money, as in the economic direction in general, failure is often a more profitable strategy that personal success.
• There should be at all economic and monetary issues, a rule that anyone who has to explain its failure has failed, we must be benevolent with those who have had a poor performance but did not reach as far as to keep them in office.
• No economic policy which only offered a choice between inflation and depression can be very satisfactory.
• Those who crave the death of capitalism should pray for it to be ruled by men educated in the belief that any positive action is the enemy of what they call basic principles of free enterprise.

Both interesting conclusions as the use of an asset as peculiar as a substitute for official money. It's what happens when you completely lose confidence in the monetary system, especially in times of hyperinflation as happened in Germany after the Second World War and now in Zimbabwe (which has an inflation rate of 231 million per cent a year).

Fortunately, however pesismistas that we should not look or in a similar situation but it is worth knowing something of economic history.

So after this article, that somehow I have written two friends, I get to work to collect the day's news.

• Unemployment is at its highest level in 12 years increased by 7% in October
• The news yesterday: The unemployed may defer 50% of the mortgage payment
• Measures against unemployment by 170 million
• Another threat? Of the vertigo of the crisis to the possibility of deflation
• Recessions are preceded by the worst banking crises: the valuations are still too high
• Two of market anomalies: the gold business profits and hide the deflationary risk
• Austria purchase of two euros the eighth bank in the country
• After the dismal data on car sales: Market falls on October motorcycle 25.1% and 45.8% of the moped
• Infojobs recorded in October, a decline of 20% in job vacancies in Spain
• Earns 158,000 euros by betting on Hamilton 10 years ago

Written by Carlos Lopez on November 4, 2008 with 260 comments
Read more articles on Euribor.

The bag and the luck factor

The other day a friend commented that I had to bring someone very close to him to point to in the Register of Forbidden Game, and so do not allow it to enter into bingo, casino gambling sy. Of course until you get to that point this person went through all stages of the disease of gambling addiction and talking about this issue we could not avoid comparing his situation with that of many people who know who have ended up ruining in equity markets (myself I ruined by the first time with future debt in 1994 but I was able to recover) and surprise that we in the Register of Forbidden Game does not include the stock market or futures crude for example.

And all this is that conversation occurred on the day of presentation of results from Lehman Brothers and its opening to finish at +17% -7% in closing (the next day down more than 40% and then declared bankruptcy) in a day extreme volatility and giving the impression that sometimes the actions behave like the roulette ball: by chance. It is true that sometimes the bag resembles a casino, and more this year where the bearish trend is clear and it fosters more moves (upward trends tend to be statistically more quiet). To make matters worse, those who have no right to such a trend can be reassured as to the wise in the period bullish as they have several enemies on the lookout, especially the FED. And is that the authorities are happy but the bullish stock market-liability or political interests, that is another matter-the damage it causes in the real economy, a bearish stock market them to try to reverse the trend and therefore damage to investors / speculators who rightly the bearish side.

In any case, I refuse to believe that the stock market is moved by chance in the medium term and I think that when it comes to investing there are objective factors that help us make the right decision. Among the key tools for me is the best PER cheap, that is, when the relationship between the price of a share and its profits (or their prospects for profit) is favorable: An action is never cheap: its price is cheap whether the benefits are kept low and its price rises or if trading but much less than its benefits. And by the same reasoning is not because they face rising prices but because its price rise more than their profits. Not long ago I read that the main stock exchange in the world, the SP500, maintained the same PER that when I was at historic highs last year although prices have fallen so much because in the same proportion had fallen profits. The stock market tends to anticipate what the figures will change in the trend when they expect a rise in corporate profits.

But if in the medium term and to invest the time to see that many tools (such GBR, technical analysis, patterns etc statistics.) Conferred to the fact buy or sell on the stock appearance true sense, we must also see that in the very short term and not talking about speculation and investment there are many factors similar to those of gambling: rumors, unforeseen data, information which is unknown, even falsehoods as happened the other day to the shareholders of United Airlines ... This year we had a very clear example on January 21 when the European stock market plummeted by Societe General's decision to unravel in a day of celebration for being less involved in USA-all future of Dax and € Stoxx purchased irresponsibly and without permission by a Jerome such. It is clear that without that factor the trend had remained bearish and that day would have probably dropped the bag but not on the scale that it did, and it is also possible that over the next day that the FED would not have taken the urgent decision to lower interest rates coup three quarters of a point. In short, if lucky enough to influence the decisions of central banks ... which will not influence us if we decide to speculate in the short term.

That's why the Internet has helped a lot that we all have good tools to work in the markets: from speed to the information and general financial institutions have adapted very well to the environment and also have created many products (futures, options, CFD ' ... s) that are accessible to the general public but nobody, not even the most skilled and experienced speculators, is immune to errors and bad luck. That is why it is essential the use of stop-loss (limit losses where rid of the position taken and we are dedicated to something else) and humility in trying to earn money which, let us not forget, is leaving to win another that can to be smarter than us.

And of course, be informed and for that I leave with you a summary of news:

• Banco Santander of Spain prevented and Caja Madrid to issue high-risk assets
• The French Government will provide 10,500 million at the six big banks
• Hungary will be the next country to break, after Iceland, according Bankinter
  
• The credit market is beginning to respond to plans to rescue
  
• Spain offers government bond funds from Arab countries
  
• Not for canes! The consumption of beer has a historic collapse

Written by Droblo on October 21, 2008 with 331 reviews
Read more articles on Euribor.

The bag is not a casino.

That is, many times it is said that the stock market is a casino, but this is a lie because in the casinos there are transparent rules, we all have the same possibilities and it is even possible to find a way to win. And if not that it ask the Pelayo, interesting Spanish family who managed to blow a lot better roulette at the casino in the world. To rescue this history written in a book for over 5 years and read in this excellent article which I leave with you a little abstract.

What the evening of that day! What the early hours of that night! Six family members Pelayo-brothers, cousins sit-in as many tables of roulette at the casino in Vienna. And we all win. Twelve million pesetas to change. That did not stop the music! The waltz of Uncle Scrooge! The heads of swearing in a Tyrolean room. The director with his photographs in his hand ... "Well, these sound like me ... Mein Gott! Pelayo Die! "Customers non grata in the casinos of half of Europe. What I say non grata, public enemies! His photos circulating in Madrid to Monte Carlo, Nice to St. Petersburg, as outlaws of the West. They will not armed. Do not cheat. But they are very dangerous.

As you see, are "investors" who have found their way, let's see exactly what was.

It all began with a syllogism. There is no perfect machine. The Roulettes are machines. Ergo ... Here is gansa pasta! Maybe not what Aristotle would have made so crudely. Let's see: the mechanisms of man-made, the atomic clocks that are more closely approximate the divine accuracy. However, it should be adjusted over the years, adding a leap second to adjust the official time on our planet to the astronomical time, the universe. Even if the atomic clocks back, why a roulette will be impartial?, Why not going to have their preferences, mimando to 21, say, to the detriment of 17? "Most of the systems believed that a number is most likely to leave when no longer appears in previous installments. It is not true. The roulette wheel is shielded on mathematical analysis, but not the physical, "said Gonzalo. "In the Casino de Madrid we realized that the Roulettes not observed the strict rules of randomness."

Unfortunately, the bags are not governed by the principles of physics, but rather by the psychology which is a science yet to be discovered. On some occasions we can detect trends mild but in times like now better leave it for professional players, as well the Pelayo said:

Reminded the joke of that player, traveling the world, was regularly sending a telegram that his family always repeating: System works. Stop. Send money.

Tanto en la bolsa como en la ruleta ocurren las denominadas rachas, momentos en los cuales la estadística se va al garete y nos encontramos con 10 rojos seguidos o con bajadas en los mercados del 10%. Como bien decía Keynes ”Los mercados pueden mantener su irracionalidad más tiempo del que tú puedes mantener tu solvencia”. Basta con ver estas semanas y sus subidas y bajas históricas. Lo que antes se perdía en un mes, ahora se pierde en un día, ayer sin ir más lejos, salieron 8 rojos seguidos en la bolsa americana.

El mensaje que quiero hacer llegar es que generalmente solemos invertir “a rojo o negro” que suele ser “ganar si la bolsa sube y perder si esta baja”, cuando en el mundo financiero disponemos de cientos de posiblidades que nos permitan tener más rentabilidad (o menos pérdidas) de lo que estamos acostumbrados. Aunque claro, nadie nos obliga a jugar a la ruleta y si vemos que hay una racha, lo mejor es dejar a que todo vuelva a su normalidad.

Sobre este tema, más detallado y muy relacionado con el juego, nos hablará la semana que viene Droblo, hasta entonces os dejo el resumen de prensa en otro día negro (aunque con números rojos) para los mercados:

• La UE acuerda un cambio contable para evitar el desplome de la banca
• La OPEP rebaja sus previsiones y el petróleo cae a 70 dólares
• Los inmuebles concentran el 72% del patrimonio de los hogares
• Vuelve el terror a los mercados: Europa podría volver a mínimos anuales
• Jove, ‘el filántropo’: alquila minipisos a jóvenes y mayores desde 290 euros
• Los banqueros se prueban el traje de rayas
• Películas de la Gran Depresión para una época de crisis

Buen día a todos.

Escrito por Carlos Lopez el 16 de Octubre de 2008 con 364 comentarios
Lee más artículos sobre Euribor .

« Artículos más antiguos

No hay artículos más nuevos