In the normal financial system, which constitute the banks, all institutions have owners that are represented by the respective boards of directors. These tips caregivers, for their own benefit, not to extend credit to insolvent companies or who is supposed to taxation systems and detects when there are problems, provisions such loans, and proceeded to execute warrants that are taken, if that exist. But bankers can not do what they want with the claim that handle as the bank is not theirs. Are accountable to shareholders, depositors before (because misuse of credit can break the institution and we all lose their money) and before the public finances if, for example, is regarded as an expense credit granted in the knowledge that it would not be returned.
That was the case of Mario Conde who was sentenced to six years in prison for paying 600 million pesetas for a company, without any endorsement Argentia Trust (which later were shown to that company then distributed the money among various Spanish political influence to in governmental decisions in favor of the interests of Mario Conde was not the reason for his detention but he who gave that money without guarantees of payment). I know that in recent times and in some countries, the bankers have ignored these rules and to cap it had not been punished but for the moment in Spain are not in that situation and all banks are reporting profits.
Unfortunately, the savings in the hands of local politicians, it can grant credit without running and without provisions for guarantees, especially political parties, or can not?, Or may not be? If it does occur fairly often ... And now it is intended that these boxes are made even stronger by joining them. No doubt it is a good solution for their survival (in exchange for thousands of layoffs, yes) but also magnify the problem of these entities whose management is so unclear.
The boxes have lost their land, they open branches across the country and even have the largest investments abroad. There is a market Murcia, La Rioja, or Basque, a European level in that category regionalist no sense. It could be said of its social function but that is a vague concept whose spending is little quantifiable and that could be replaced by an increase in tax relief to certain tasks of banking as the sponsorship of culture. If we convert the biggest move in two things: whether it is within the same community, its economic importance is so great that the economic power and political autonomy is even more confused if they join together and boxes of different communities, how to ensure balance, how to unify criteria if the political influence of each autonomous community is different, and yet it remains how to ensure that CajaMadrid-for example, is just in its social spending with Murcia event of a merger with the Fund of Murcia? I think the management problems worsen.
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Written by Droblo on December 3, 2008 with 294 reviews
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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. (More ...)
Droblo written by the November 14, 2008 with 337 reviews
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The other day I read that the American figure that the state is being spent on trying to resolve the financial crisis is already 2.7 billion dollars, and that in a country that already, even before all this and much needed money. He also knew the number of jobs: 524 thousand new unemployed in two months. And I began to search for information on the actual state of U.S. finances. Let a couple of numbers and put all the zeros, that more than a trillion translates as billions and trillions when we lees and I had to document only on American websites:
- A day on November 11 at 09.14, the debt is U.S. $ 10.635.794.969.002, an amount that is increasing second to second, and in fact there is a ticking clock that will (http://en.wikipedia.org/wiki / National_Debt_Clock) and discussed here not long ago that going from 9 billion to 10 had to fix it. Currently 500.000.000.000 is increasing each month since October, a figure of growth that is expected to be sharply reduced because it is what they grew on average annually since 2003. In September the U.S. government expanded, very appropriately, the limit of indebtedness from 10.6 trillion to 11.3 but everything points that will run short in 2009
- The estimated GDP-American 2007 is 13,800,000,000,000, then the current debt is around 75% of GDP and it seems to get worse closer to 90% only by increasing the debt if we have to account that GDP may actually be reduced if there is recession, this could be even worse. They are not the all-time highs as can be seen in figure but let's remember that it was exceeded 100% due to World War II:
However, many countries are worse off and for years (from among the "big" Japan is close to 200%, in Europe and Italy, Belgium and Greece around 100%) the big problem is that this is only the debt State that is a fraction of the total debt of banks, families and American companies estimate is about 50,000,000,000,000, almost 5 times more than the public and more than 3 times the entire GDP. In Spain, where we have this sense of indebtedness total private debt is double the GDP. (More ...)
Droblo written by the November 11, 2008 with 243 comments
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The Nobel Prize in Physics Richard Feynman defined science as the following process:
"First we make a prediction and we calculate the implications it may have. Then compare the hypothesis with the results of experimentation. If you do not agree, then it serves. In this simple statement is the key to science. It does not matter what beautiful or smart or that it is reasonable theory. It does not matter how smart you are, who has made the prediction or how important is your university. If not consistent with the experiments, is wrong. "
With the statistics is what happens, even if it is not reasonable that sometimes are met patterns simply because they have met in the past. If it works then we can take a scientific value, although we do not end up understanding why they happen. For example, this graph shows very clearly that the smaller values do better than the average big in November and December:
Whichever is because it is easier to manipulate them for the annual closure may be the reason but it does not matter too much to know why. Now we enter the most bullish seasonal period of the year:
The bags of historic average do better, even if we look back over 100 years ago, from November to April, May and October. This is not to say, much less that half of the bags fall from May to October, but simply that half of long-term and do without a doubt worse. The figure is also clear, even spectacularly clear:
These guidelines are a tool, but together with other findings. Carpathian commented a few days ago a study by Bespoke Investment Group using data from 1900 to 2008 which reads:
The average duration of the 21 recessions that have occurred has been 14.4 months. The average loss that has come to the Dow Jones has been -24.2%. The loss was the most devastating of the recession in August 1929 to March 1933, where he lost 88.2%. The duration was 43 months. As we are still far from podernos compare with that disastrous situation. The loss was lower in the recession of July 1953 to May 1954, where only fell by 5.2% and tough 10 months. 16 of the 21 recessions conform very well to the media, and there were only stays over 4 20 months.
But the most interesting of the study is another issue that I commented the other day in my article on whether or not to buy yet:
The bags, with very few exceptions, are beginning to discount in order well in advance of recessions, so as usual, is that when data are still coming out very bad start of the climb. The historical average from 1900 said that the floors of stock exchanges is playing at the level of 58.4% of the duration of a recession. One surprising and I think that tells us that it is normal to start the comeback when remaining half of seven months of bad data and gloomy. Only 4 times was that the soil is at the level of 80% or more of the duration of the recession.
On the other hand the market is trading at a PER of 11.3 x 2008 and 2009 PER of 9.4 x for the S & P500. These figures are well below the historical average of 15.1 x PER of the S & P 500, which would indicate a discount of 40% over the historical average, or that these levels of valuation discount that there is a high risk that the benefits estimated by the consensus for 2009 in the S & P 500 are inflated by 40%. How do you know? In short, I still believe that we have not yet seen the least of this bearish trend but I think my duty is to report these peculiarities and commented that the statistics show that:
- Not because the data are ill should not buy, despite what it seems. It is more reliable surveys that follow the data as it is to predict the end of the recession. For example, is more reliable data for building permits (which implies a trend in future) that the data of housing built.
- If the analysts are not wrong, the amount of books the shares are historically cheap.
- We entered a time of year usually bullish and that usually lasts for 6 months.
- Bassists are the years in which there is more interest in manipulating the closure end of the year.
Moreover, the seasonal patterns not only apply to the stock exchange, also work with other products. For example, crude oil tends to lower-or-less climb to the end of the year on average.
PS - And before I read the comments of suspected manipulation by the American elections the truth is that I have not seen any reliable statistics but it is curious that just two years ago, in the last parliamentary elections in the U.S., and commented that had intervened to lower oil prices artificially and thus benefit the Republican Party: http://www.crisisenergetica.org/article.php?story=20061004102546877 So they relied on little but is curious about how as the election date shows the low $ and crude oil ...
And finally, the usual summary of the press.
Written by Droblo on October 29, 2008 with 259 comments
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Building on that this week I have worked very little on the blog I get up prontito this Saturday to bring the commentary of the week and present an interesting graphic courtesy of Droblo.
Let's turn to the comment that came from a doubt that he had "clarified" about the collective thoughts and behaviors:
# 14, rinsing
October 24, 2008, at 9:24.
And as a gift, an interesting graphic, it is the Japanese stock prices (the Nikkei index) short and you hit what you told me Droblo (and who today says the Carpathians in Five Days):
THE FIGURE OF THE DAY: The Nikkei has marked the second lowest closing since 1983, the April 28, 2003 was the lowest closing (7607) although the figure to be weekly gave the impression that today is lower. In any case, catastrophic ... and if we take into account the rise in inflation in these 25 years and the figure is even worse ...
"The stock market is the best long term investment" Menuda irony
Written by Carlos Lopez on Oct. 25, 2008 with 66 comments
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Personal comment .-
Last Friday, shares of ING in Amsterdam stock market suffered strong selling pressure (at the close lost 27%) and rumoreaba were urgently in need of capital. The bank's management held a press conference to give figures for the financial soundness of the institution. Over the weekend the Dutch state has injected 10 billion € in the bank. This time no one can accuse the situation of the bank to a massive withdrawal of deposits since the Dutch state had guaranteed all loans until 2009 and, in fact, the rumor did not say that ING suspend payments but that it would expand capital and the Netherlands. So, what was said at the press conference on Friday was false. Once again, as he lied with Bear Stearns, Fortis or Northern Rock. In all countries the same process: the trend is more reliable stock of a bank can assert that what the authorities. And no one takes responsibility for the lies to shareholders. ¿Conclusion? At the moment there is confidence in the statements that assume the mismanagement of private banking but do Confidence in the financial system? What would be weird having it (the text of the press):
"The measure was taken just ten days after the same ING took control of the assets of the failed bank islándico Kaupthing. At that time, a communique from the bank said it did from a position of strength because it had more than $ 1.8 trillion in assets and 85 million customers around the world. "
And the British Barclays state offered him money after assuming the risk of buying the spoils of Lehman and I am sure if the Santander would like the Spanish state would give money with which to finance their adventures in high-risk British and American ...
Another topic, it appears that Spain wants Arab countries to buy state debt, up there perfect, but coincides in time with the purchase of the Spanish state debt from the banks. Ie Spain with its own guarantee fund picks, with that money buy what they do not sell their banks, trusts that these banks use the money to increase the credit and that those who capture the credit it back to the state via taxes ... I know that but as I said, Why do so many middlemen? If Spain is debt, which is to inject money into society and not to those banks which can not be compelled to increase the credit. Lower taxes or subsidies for mortgages and loans before recapitalize banks would be a lot more social and above all faster to end the crisis. Instead, we still do not return to those who were negative ...
As to bag it is clear that we have entered a range that is below a support at least a year and are now above the 10 thousand of Ibex (and the Dow again be paired), 5000's Dax or 1000 of SP500, breaking that level would accelerate the movement in the short (as we have seen this Thursday when the Ibex lost its previous annual minimum) without necessarily changing the trend in the medium term, which remains bearish aplastantemente. As it is not all bag, I think it is noteworthy that gold, rather than value refuge from the crisis, is another asset that is at minimum a year. And the explanation, apart from the rising and falling $ crude, which usually follows, is that gold has traditionally been the refuge against inflation and recession may now be discounted prices that seem been removed as a problem. This is Scramble to many investors and funds who once were compensated for losses in equities with earnings of metals, oil or food ... and even within the equities exchanges between emerging and non emerging. This year the losses are accumulated in a variety of products.
Finally, it was assumed that the October 29 the FED will cut rates and that the ECB will make the Nov. 6. The bearish trend continues and with it the Euribor. Hopefully crude oil continue to support the lowering of inflation although I must admit last week I was too optimistic about the price of petrol and I am confused by looking at graphics fiarme USA and a poor source of the Internet for transforming a gallon in his corresponding liters. And to top it all, the $ is going against us. And it's really odd that just before the elections the U.S. $, despite the huge deficit and its rates so low, is in the $ maximum of two years.
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Written by Droblo on October 24, 2008 with 438 reviews
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Following consideration of yesterday afternoon, today I remembered an experiment that explains some of the things that happen every day. By the way, thank you very much to all who responded to me yesterday: I did corroborate that, even paranoid, it is true that they are chasing me. Clópez, already knew that law of the bag, that's why I never made the case to analistos. But what really intrigues me is how we reach that situation of "knowledge standard."
The experiment is as follows (if someone has made before, I'm sorry, I do not crucifiquéis): In a locked cage, 10 monkeys, and in the center put a ladder, and on top of it a basket full of bananas. The monkeys were trying to climb cogerlos, and every time I did, outside plug and put a hose jets of water to the monkeys until it stopped climbing. When stopped the punishment, a monkey trying to climb back, and then return to throw jets of water to the monkeys. Over time, every time a monkey tried to climb the ladder, beat the others and grab it should not do so. The monkeys climb abandoned.
Then took out a monkey and put a new one. The new was going straight to the staircase, and the others beaten and grab it should not do so. After several attempts, the monkey climb again abandoned. So the monkeys were bringing to an old one and adding a monkey again for everyone profited. Every time we came a monkey and tried to climb again, he received a corresponding beating, which adds new monkeys that came before him.
Well, when the ten monkeys old had been replaced, the ten monkeys that were not boarding for bananas, and when one tried it, the other is what prevented coups. The detail is that none of these ten monkeys had been punished with the hose, but since he entered she saw every time I was trying to raise, he received a beating.
If these monkeys have asked them: Why are cascais to those trying to climb for bananas? Surely they had responded: "I do not know, but here is that things have always been done."
It gives food for thought on the History of Humanity, huh?