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interessant
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witzig
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gut analysiert
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informativ
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Aber das Gesicht wirkt einfach nicht vertrauenserweckend [wie die Aktie des Home-Lenders Coutrywide Financials, dessen CEO er ist], da helfen auch Glitzer-Schlips und Nadelstreifen nichts.
Mike Tyson sagte mal: "You can get the boxer out of the ghetto, but you can't get the ghetto out of the boxer!"
Faule Konsumentenkredite in den Emerging Markets
Rainer Sommer 09.05.2007
Nicht nur bei US-Hypotheken, auch in China und Indien zeigen sich erste Probleme mit Konsumentenkrediten
Weil "faule Kredite" untrüglich drohendes Unheil ankündigen, werden sie an den Finanzmärkten gerne mit Kanarienvögeln in der Kohlenmine verglichen. Und sie werden in guten Zeiten vergeben: "Bad loans are made in good times", lautet jedenfalls eine britisches Banken-Sprichwort.
Derartige Vergleiche zieht die kritische Finanzmarktberichterstattung derzeit zwar vor allem im Zusammenhang mit den Problemen am US-Subprime Hypothekenmarkt; also mit den inzwischen berüchtigten Immobilienkrediten, die an Schuldner mit schlechter Kreditwürdigkeit vergeben werden bzw. wurden. Allerdings scheinen nun bereits solidere Vergabestandards eingeführt worden zu sein, was das Kreditwachstum stark gebremst hat.
Unter der Annahme, die Kreditprobleme würden auf diejenigen beschränkt bleiben, die ohnehin kaum Geld haben, setzte die Wall Street letzte Woche angesichts des starken Wachstumseinbruchs im ersten Quartal auf ein "zyklisches Zwischentief", das vom gestiegenen Wachstum in Europa und vor allem von den boomenden Emerging Markets abgefangen werden könne. Dementsprechend feierte der DJIA (1), der Index der 30 wichtigsten US-Industrieaktien, letzte Woche einen weiteren Kursrekord. Aber auch der wichtigste Aktienindex für Entwicklungsländer, der MSCI EM von Morgan Stanley Capital International (2), überschritt (3) am 7. Mai im Handelsverlauf erstmals die 1000-Punkte Marke
Ebenfalls letzte Woche meldeten China und Indien jedoch auch zunehmende Probleme mit Privatkrediten. Dort waren Konsumentenkredite zwar bis vor wenigen Jahren praktisch unbekannt, weswegen die Verschuldungsquoten gegenüber dem offiziellen Finanzsektor noch sehr niedrig sind. Tatsächlich besteht ein makroökonomisches Problem heute eher in zu hohen privaten Sparquoten und zu niedrigem Konsum. Allerdings werden von lokalen und internationalen Banken zusehends westliche Finanzprodukte wie Kreditkarten, Leasing und Raten- und Immobilienhypotheken auf den Markt gebracht - und es werden zumeist riesige Zuwächse und Gewinne erzielt. Anders als in den angloamerikanischen Ländern stehen die Privatkredite aber überwiegend noch in den Büchern der Banken und werden daher tendenziell weniger leichtfertig vergeben.
Dennoch zeigt eine aktuelle Presseschau anekdotisch eine beunruhigende Häufung an Problemen mit Konsumentenkrediten in den Entwicklungsländern. So warnte laut Indiens Econmic Times (4) der Chef der indischen Zentralbank OP Bhat letzte Woche von einem Anstieg der faulen Kredite um einen halben Prozentpunkt. Diese würden im privaten Immobilienbereich am schnellsten anwachsen und sich aktuell zwischen drei und vier Prozent der aushaftenden Gesamtsummen bewegen. Außerdem befürchte er ein Übergreifen der negativen Tendenz auf andere Kreditsegmente und nennt Klein- und Mittelbetriebe als potentielle nächste Opfer.
Auch die thailändische Nationalbank meldete laut The Nation (5) für das erste Quartal 2007 einen Anstieg der faulen Kredite; zwar nur um bescheidene zwei Prozent, allerdings sei das Kreditvolumen nur noch um 0,22 Prozent angestiegen, was nicht viel Gutes für den Binnenkonsum verheißt.
Selbst in China, dessen filigranes Finanzsystem so viel Vertrauen benötigt, dass sich die Geldpolitiker stets eher ziel- als informationsorientiert äußern, sprach laut Shanghai Daily (6) der Chef der Shanghai-Filiale der chinesischen Bankenaufsicht letzte Woche ebenfalls von einem kräftigen Anstieg der Problemkredite, speziell bei privaten Hypothekarkrediten, und zwar um 402 Millionen auf 2,37 Mrd. Yuan. Marktbeobachter sehen diese Äußerung zwar eher im Zusammenhang mit Kredit-Eindämmungsmaßnahmen der Zentralbank und nennen die Warnung angesichts des eigentlich bescheiden ausgefallenen Zuwachses einen versteckten Triumph. Denn es wird auch ein Aufsichtsbeamter namens Zhang mit der Aussage zitiert, dass zuletzt monatlich nur noch zwei Milliarden und nicht - wie zuvor - zehn Milliarden Yuan an Hypotheken vergeben wurden. Allerdings meldete die China Construction Bank einen Anstieg der Kreditvorsorgen um 39 Prozent gegenüber dem Vorjahr, bei gleichzeitig insgesamt um nur 17 Prozent steigenden Ausleihungen.
Ende April wurde zudem bekannt gegeben, dass sich das Volumen an faulen Krediten in Taiwan im 2. Halbjahr 2006 nahezu verdoppelt habe, wofür vor allem Kreditkartenschulden verantwortlich waren.
Von den europäischen Emerging Markets ließ innerhalb der letzten Wochen nur die Bulgarische Zentralbank von Problemen mit Konsumentenkrediten hören, wobei die österreichische Bank Raiffeisen International, die in praktisch allen europäischen EM-Staaten vertreten ist, bei der letzten Bilanzpressekonferenz berichtete, dass die Kreditqualität in ihren zentral- und osteuropäischen Märkten zueist eher besser sei als in Westeuropa.
Wachsende Kreditvolumen und steigende Probleme wurden in den vergangenen Wochen auch aus Afrika gemeldet, etwa von der Awash International Bank SC (AIB) der ältesten Bank Äthiopiens. Diese konnte zwar Ausleihungen und Gewinne erheblich steigern, am stärksten nahmen aber die faulen Kredite zu, und zwar um rund 26 Prozent. Die größten in Uganda tätigen Banken meldeten (7) eine massive Ausweitung ihrer Privatkredite, aber auch um bis zu viermal höhere Rückstellungen auf ihre Kreditportfolios wie noch vor einem Jahr. Von allerdings sehr niedrigem Niveau um fast die Hälfte angehoben wurden die Vorsorgen für faulen Kredite hingegen von Südafrikas Absa Bank, wie der ‚Business Report' berichtete.
Den einzigen drastischen Rückgang an faulen Krediten dieser kleine Presseschau bieten die Philippinen. Dort meldete die Nationalbank bezogen auf das Finanzsystem ein Sinken von 8,02 auf 5,56 Prozent des Gesamtvolumens. Das ist freilich nur ein scheinbarer Lichtblick, da dies aufgrund einer gesetzlichen Regelung erfolgte, die es den Banken ermöglicht hat, faule Kredite an spezielle Investmentgesellschaften zu verkaufen.
Links
(1) http://finance.yahoo.com/q?s=^DJI
(2) http://www.mscibarra.com/
(3) http://www.bloomberg.com/apps/...mp;sid=a.nV.m4s.T98&refer=news).
(4) http://economictimes.indiatimes.com/Markets/...rticleshow/1969182.cms
(5) http://nationmultimedia.com/2007/04/24/business/business_30032535.php
(6) http://www.shanghaidaily.com/sp/article/2007/...21/article_313425.htm
(7) http://allafrica.com/stories/200704300203.html
Telepolis Artikel-URL: http://www.heise.de/tp/r4/artikel/25/25243/1.html
Copyright © Heise Zeitschriften Verlag
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America's economy
Stag or 'flation?May 3rd 2007 | WASHINGTON, DC
From The Economist print edition
Should the Fed worry more about rising prices or weak growth?
WITH skinny trousers and Mary Quant dresses, fashionable Americans are taking their cues from the 1960s this spring. For financial markets and central bankers the retro theme comes from a different, less pleasant, decade. With growth slow yet inflation stubborn, America is facing a weak echo of that 1970s scourge—stagflation.
The economy grew by only 1.3% at an annual rate in the first three months of the year, whereas the overall GDP deflator—the broadest output-based measure of price pressure—rose at an annual rate of 4%. The deflator for “core” personal consumption expenditures (PCE), which excludes fuel and food, rose more modestly in the first quarter. But this favourite inflation yardstick of the Federal Reserve was still outside its comfort zone.
By the standards of the 1970s, when inflation was in double digits and unemployment not far behind, today's plight is hardly grave. Jobs are plentiful and price pressures, by historical standards, are low. But for today's central bankers, determined to maintain their credibility as inflation-fighters, it is distressing all the same. Despite a year of sluggish growth, America's underlying prices have been rising uncomfortably fast.
So far the central bankers have talked tough and done little. They have kept short-term interest rates steady at 5.25% since June, but have made clear that inflation is what worries them most. That bias is likely to be repeated at the Fed's next policy-setting meeting on May 9th.
Less obvious is what will happen over the next few months. Financial markets reckon the Fed will eventually fear recession more than inflation. The price of Fed and eurodollar futures suggests that the central bankers are very likely to cut rates by at least a quarter point in the second half of the year, with more loosening likely early in 2008.
That may not mean much. Financial markets have consistently overestimated the central bank's willingness to cut rates in recent months. Look at the sources of inflationary pressure and it is hard to see the Fed dropping its guard. Energy costs have risen sharply (petrol prices are up 80 cents a gallon or more than 30% in the past three months). The dollar is down, hitting a record low of 1.366 against the euro on April 30th. Virtually every measure of wage growth has been accelerating, although increases in productivity have been lacklustre.
Traditional danger signals, in short, all point one way. But they may be becoming less important. The statistical evidence suggests that, thanks to the central bankers' credibility as inflation fighters, America's underlying rate of price increases has become less vulnerable to transitory pressures, such as rising energy or food prices. The relation between unemployment and inflation has also weakened. And with profit margins fat, America's firms have room to absorb higher wage costs.
In the Fed We Trust
What matters most, as several Fed governors have pointed out in recent weeks, are people's expectations of future inflation, which in turn depend on their faith in the central bankers. Provided people believe in the Fed's determination to keep inflation low, inflation expectations will stay low. That seems to have been the case. Most gauges of long-run inflation expectations, such as surveys of professional forecasters, have been relatively stable, at 2% or just above, for the Fed's preferred inflation gauge. However, one measure—the Michigan consumer survey—has jumped a fair bit in April, thanks to higher fuel costs.
Despite the underlying inflation risks, a statistical quirk may push core inflation down in the coming months. Housing costs make up a large chunk of America's inflation basket (almost 40% of the core consumer-price index and 20% of the Fed's preferred measure). Since the statisticians lack a direct measure of housing costs for homeowners, they impute a cost based on rents. As the property bubble burst in 2006, more people decided to rent houses rather than buy. That pushed up the imputed cost of housing. Now the supply of rental properties is rising as beleaguered owners try to rent out their unsold flats. With vacancy rates high, rents may slow. March's core PCE index was flat, bringing the 12-month increase down to 2.1%, barely above the Fed's informal limit. It may fall further in the coming months. Exclude rents and it looks even better (see chart).
Less clear is whether core inflation at 2% would calm the central bankers enough for them to cut interest rates. One problem is that Fed officials have not agreed on what their optimal inflation rate is or how quickly they would like to reach it.
Some of the board's more hawkish members would probably prefer core consumer inflation to be well within the central bank's comfort zone of 1-2%. Others might be content with something closer to 2%. One governor, Frederic Mishkin, recently made clear that getting inflation below 2% would demand a reduction in inflation expectations that could be “difficult and time-consuming to bring about”.
Much will depend on just how weak the economy continues to be. So far, sub-par growth has not brought the higher unemployment that the central bankers expected and want. And their official forecast is that GDP growth will strengthen in the second half of the year.
The most recent evidence is mixed. Durable-goods orders suggest investment spending may be recovering from its recent funk. A widely watched index from the Institute for Supply Management showed manufacturing was unexpectedly strong in April. With a weaker dollar and perky growth in the rest of the world, exports are likely to grow fast.
But news from the housing market is getting ever gloomier. An index of pending home sales fell unexpectedly to its lowest level in four years in March. And, hit by higher fuel costs as well as falling house prices, consumers may finally be flagging. Americans cut their spending by 0.2% in real terms in March.
Add these mixed signals on growth to the uncertainties about inflation and the chances are that the Fed will simply do nothing for a good while yet. Unlike in fashion, in central banking the underlying trend can take a while to spot.
__________________
ignorance is bliss
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Kass: Housing Red Ink Could Spell Recession
By Doug Kass
Street Insight Contributor
5/9/2007 12:41 PM EDT
My article Monday offered a sober view of the U.S. economy, documented the government's illusion of low inflation and healthy job growth, and discussed why stagflation will continue to serve as the functional equivalent of a huge tax increase on the middle class.
From my perch, the odds favoring a housing-induced recession are now increasing. My bearish preoccupation with the health of the housing markets appears to be justified by history.
The slow-motion drop in consumption seen in the last 12 months will likely accelerate, aided by growing evidence of a second housing downturn this year and possibly another downswing next year, which will be exacerbated by ever-increasing supplies of unsold homes served up, in part, by mortgage resets in 2007 and 2008.
The bullish crowd contends that there is no evidence that the real economy has been affected by the housing market and subprime collapse, rising energy prices or geopolitical threats. Nor -- according to them -- has the economy been affected by a host of other varied microeconomic and macroeconomic issues.
Today, the term liquidity is a catch-all phrase in support of continued economic growth and stock market appreciation, just at a time that collateral and interest rate terms in private-equity deals have begun to tighten.
The same things were said in the late 1980s.
During that period, unprecedented land and housing speculation followed the erosion in lending standards that were a byproduct of the deregulation of the savings and loan industry and the liquidity introduced by Michael Milken's Drexel Burnham, which brought an unprecedented increase in takeover activity.
Ultimately, the economic progress of the early- and mid-1980s gave way to an implosion in the high-yield debt markets, an economic downturn and a horrific housing depression -- and the loss of the previous decade's liquidity. In the early 1990s, the economic contraction was severe in both magnitude and duration (continuing for three years), even though the federal funds rate was reduced by 500 basis points to 3% and stayed there for over 20 months.
(As an result of the recession's severity, several money-center banks, such as Citigroup (C) and Bank of Boston, were almost insolvent and had to be saved by the Tisch family.)
Fast-forward to the present.
In 2007, the economy is nearly two-thirds larger than it was 16 years ago, a period in which the downturn in real estate produced nearly $300 billion in losses. But not only is the residential mortgage market much larger now, so are subprime delinquencies and the ultimate losses they will deliver.
Moreover, home mortgage borrowing, home ownership (69% of families vs. only 64% in 1991) and the impact of housing on aggregate economic activity have never been higher. Equally important, household debt as a percentage of GDP is dramatically higher, and home equity as a percentage of home market values has never been lower.
Once again, as in the late 1980s, lax lending standards have become the mainstay of our markets and now are a contributor to the real estate and subprime mess. Also, liquidity is the most often quoted term to explain the market's buoyancy, takeover activity and rising stock prices.
Given the extraordinary creation of wealth -- in part because of the ongoing strength of the equity markets and, until recently, the large price appreciation in home prices and breathtaking mortgage equity withdrawals -- one should not be surprised by a delayed or slow-motion response, particularly by consumers.
Nevertheless, there is an obvious chain of real estate-related jobs -- mortgage brokers, landscapers, title searchers, real estate lawyers, mortgage bankers, realtors, contractors, etc. -- that will suddenly be lost at breakneck speed over the near term.
The worst is yet to come -- the housing's multiplier effect is starting to kick in.
The consumer has never been more levered, homeownership as a percentage of household net worth has never been higher, the issue of home affordability has yet to be resolved, the inventory of unsold homes is at record levels, homeowner vacancy rates are at an all-time high (2.8% vs. 1.2% in the early 1990s), foreclosures and delinquencies are skyrocketing, and mortgage interest resets are just beginning to further pressure household incomes.
The damage associated with the housing problems will be long-lasting -- and, as in the early 1990s, lower interest rates will not readily jump-start growth and rescue the economy.
Technical Analysis
The Toughest Kind of Rally for Bears
By Dan FItzpatrick
Street.com Contributor
5/9/2007 11:00 AM EDT
Tuesday I was chatting with a few traders about the difficulty in beating the S&P 500. When it is declining, the easiest way to beat it is to simply go to cash and let the market fall without you. But a bull market is different. It is extremely tough to beat the S&P when the market is strong.
But have you ever thought about why it's so tough? After all, why not just buy a few of the leading S&P stocks, those that are actually advancing faster than the index? Well, not all of the components are strong -- the weak ones drag on the index. So if we can avoid those, we've got a great chance of outperforming the S&P, right?
Well, not really. First, today's leaders are not necessarily tomorrow's. It's difficult to time individual stocks so that you are only in those that are beating the S&P and will continue to after you've bought them.
But that's not the biggest hurdle. Most traders don't think about this, but the S&P is always fully invested. It owns 500 of the best publicly traded companies and has no cash on the sidelines. Meanwhile, you are, perhaps, 80% invested in various S&P stocks and 20% cash. You are being aggressive but remain cautious, keeping some powder dry.
Now, let's assume we are in a bull market. By definition, the S&P is in a strong uptrend. You are trying to decide where to put your money -- into the fully invested S&P, or into an account with an 80/20 equity-to-cash ratio? I know where I'd be putting my money.
So, why doesn't everyone just buy the S&P 500 SPDR (SPY) and call it a day? Because the market doesn't always go straight up. Sometimes the S&P struggles and gives back a lot of its gains. It is those times when a disciplined trader can outpace the index. By giving back less than the S&P, a trader who balances discipline with aggressiveness has a much better chance of beating the averages.
Strive to find the equilibrium between discipline and aggressiveness. Do that, and your aggressiveness will keep you close when the S&P is strong, and your discipline will enable you to pull away when it corrects.
I've been getting quite a few emails for my take on the major averages. It turns out that a lot of readers just don't trust this rally. So here is a bird's-eye view of the major indices.
This S&P monthly chart shows how close it is to the 2000 high. Other than some traders getting cute with ancient resistance, I just don't see the 1500 level as holding any more significance than any other even number. The real key to this uptrend is the multiyear resistance line that has now morphed into support. As long as that holds, there is nothing wrong with the S&P.
The moving average convergence/divergence (MACD) oscillator, which is a combination trend/momentum indicator, is steadily moving higher. At the same time, the on-balance volume indicator at the bottom of the chart is also quite bullish.
This type of rally is the toughest kind of rally for the bears to deal with, because it's just too tempting to rant about the increase in momentum. We'll hear such things as, "It can't last" or "The market is due for a correction." Fine, but meanwhile, the bulls run on. I believe it pays to run with the bulls, and I'll keep doing so until the trend changes.
In early 2006, the Dow began breaking out of a prolonged volatility squeeze. By the end of the year, this benchmark index was at an all-time high. If you look at the last year of trading, you can see that the Dow has been walking along the upper Bollinger Band, which is something that you see strong uptrends do! And after the February correction, the coast is clear for even higher prices.
One thing that I haven't heard anyone really discuss much is the disparity between up volume and down volume. Look closely at the last few bars on this chart, and you'll see that the February correction occurred on the lightest volume we've seen in about eight months. That's not particularly indicative of an impending reversal.
Dow Theory calls for the transportation average to confirm a new high in the industrial average by making a higher high itself. That's what we see here. While the stochastics seem to be weakening a bit, we've only got two points of support and two of resistance. It takes three points to draw a valid trendline, and as I look at the stochastics, I see the possibility of a higher low followed by a higher high. In that case, there is nothing wrong with the Trannies. I'm looking for 5500.
This monthly chart of the Nasdaq-100 (NDX) is on a shallower slope than the other major averages. While that makes the NDX an underperformer, it's not necessarily a bad thing. Rather, a more gradual upslope is more sustainable and ripe for a breakout. The NDX is right at the top of its range now.
The ideal entry would be on a pullback to about 1600 -- but my bet is that if the NDX were to pull back 300 points, most folks would be so freaked out that they wouldn't capitalize on the buying opportunity anyway. I'd recommend watching the middle Bollinger Band -- right around 1700. As long as that holds as support, this uptrend should be pretty steady.
Be careful out there.
At the time of publication, Fitzpatrick had no positions in the stocks mentioned, though positions may change at any time.
Ich war nie ein Anhänger der Doomsday Theorie wobei die Wahrscheinlichkeit für dieses Szenario durch die Hyperliquidität steigt.
Ich wünsche euch einen schönen Abend
Permanent
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Zu #1887 Permanent, Du stehst mit Deiner Sichtweise nicht allein ;-)
Ein langer, aber m.E. lesenswerter Artikel aus Asia Times Online von Henry C.K. Liu ( Link am Ende des Texts ) Hier die Wiedergabe der Schlussfolgerungen von Liu am Ende des besagten Artikels:
…….. The five-year global growth boom and four-year secular bull market may simple run out of steam, or become oversaturated by too many late-coming imitators entering a very specialized and exotic market of high-risk, high-leverage arbitrage. The liquidity boom has been delivering strong growth through asset inflation (property, credit spreads, commodities, and emerging-market stocks) without adding commensurate substantive expansion of the real economy. Unlike real physical assets, virtual financial mirages that arise out of thin air can evaporate again into thin air without warning. As inflation picks up, the liquidity boom and asset inflation will draw to a close, leaving a hollowed economy devoid of substance.
Massive fund flows from the less experienced non-institutional, retail investors into hot-concept funds such as those focusing on opportunities in BRIC (Brazil, Russia, India and China) or in commodities, or in financial firms involved in currency arbitrage and carry trades, have caused a global financial mania in the past five quarters that has defied gravity. It will all melt away in a catastrophic unwinding some Tuesday morning.
Inflationary pressure in the US and other OECD economies makes a cyclical bear market inevitable and an orderly unwinding unlikely. Central banks cannot ease because of a liquidity trap that prevents banks from being able to find creditworthy borrowers at any interest rate. Banks could be pushing on a credit string and global liquidity could decline, causing asset-risk valuations to contract suddenly and sharply. A liquidity trap can also occur when the economy is stagnant and the nominal interest rate is close or equal to zero, and the central bank is unable to stimulate the economy with traditional monetary tools because people do
not expect positive returns on investments, so they hoard cash to preserve capital. Capital then becomes idle assets.
As the decade-long US consumption collapses from exhaustion, a secular bear market arises in which the bullish rebounds are smaller and do not wipe out the losses of the previous bear market. Because Asia's growth has been driven by low-wage exports, it will not be ready fill in as the global growth engine in time to prevent a global crash. China is just beginning to change its development model to boost worker income and household consumption and may take as long as a decade to see the full effects of the new policy. China's only option is to insulate itself from a global meltdown by resisting US pressure to speed up the opening of its financial markets. China's purchasing power is too weak to save the global economy from a deflationary depression.
A global financial crisis is inevitable. So much investment has been sunk into increasing commodity production that a commodity-market bust, while having the effect of a sudden tax cut for the consuming economies, will cause bankruptcies that will wipe out massive amounts of global capital.
A financial crisis could trigger a global economic hard landing. Global financial markets look suspiciously like a pyramid game in this overextended secular bull market. The proliferation of complex derivative products catering to short-term trading strategies that aim to get the biggest bang for the buck creates massive uncertainty surrounding leverage in the global financial system. A commodity burst could cause correlation trades to unwind in other markets, which could snowball quickly into a massive financial crisis.
When markets are hot, fund-manager companies tend to market funds aggressively, especially ones with hot concepts. Commodities, BRIC, etc, have been the hot concepts in this cycle. Tens of billions of dollars have been raised by such funds from the less experienced retail investors over the past three quarters in Japan, South Korea, Taiwan, Hong Kong, etc. This source of money has fueled rapid price appreciation in the recipient markets.
Starved of good returns in the US, long-term investors have been allocating funds to emerging-market and commodity specialists to chase the good performance. Such funds have flowed disproportionately into small and illiquid stocks, causing them to rise in rapid multiples. Their good performance attracts more funds and reinforces the virtuous cycle.
Rising leverage is another technical factor that has artificially boosted liquidity in the hot markets. Derivative products such as warrants are a major factor. Some funds leverage up to increase exposure to high-beta assets. Beta is a coefficient measuring a stock's relative volatility, a covariance of a stock in relation to the rest of the stock market. Capital preservation strategies prefer low-beta stocks. High-beta assets offer high returns for taking high risks.
Before finance globalization, if short-term dollar interest rates were higher than longer-term interest rates, a condition reflected by an inverted yield curve, US Treasury bond prices could not be boosted by carry trades between currencies. Today, borrowing short-term low-interest currency to invest in longer-term debt in high-interest currencies, thus earning the "carry", or interest rate spread, between the two types of debt denominated in separate currencies is routine. If short-term rates in the US are prohibitively high, or higher than long-term rates, then carry-traders can simply do most of their borrowing overseas in a foreign currency. Furthermore, if the 4% spread between short-term Japanese interest rates and US T-bond yields is not sufficiently rewarding, the return can be boosted to 40% using routine 10:1 leverage.
More lucrative still, borrow in Japanese yen to invest in Brazilian or Turkish bonds, using various derivatives to hedge currency or credit risk and pass it on to counter-parties at the cost of a relatively small insurance premium. The supply of "hot money", money that can be shifted around rapidly in response to changes in expected returns, now seems to be endless, because if monetary conditions start to get tighter in one part of the world, then the speculators can always find a source of low-cost financing somewhere else. And the Bank of Japan (BOJ), later joined by the Federal Reserve, with their zero, near-zero, or at least below-neutral interest rates, in effect underwrite the whole process.
The financial markets experienced minor shocks recently when the BOJ soaked up a lot of liquidity and hinted at the need to commence a rate-hike program. The minor shocks in fact forced the BOJ to back away from its planned monetary tightening to keep the speculative frenzy going. This is the reason the inversion of the US yield curve, which normally mean liquidity is about to contract, has not yet triggered a liquidity recession. A liquidity boom will continue as long as a major central bank with large foreign reserves, such as the BOJ, continues to price short-term credit at bargain-basement levels and leaves its borrowing window open to all comers.
The People's Bank of China also contributes to the global liquidity boom by its willingness to continue to buy long-term US T-bonds even if rates fall.
The US current-account deficit is the key driver of the liquidity boom. Those who clamor for a reduction of the US trade deficit are unwittingly calling for a US recession.
When the ongoing meltdown in the subprime mortgage market spreads to other parts of the credit markets, the Federal Reserve will be forced to implement a monetary ease. But a liquidity trap will activate the dynamics of an inverted yield curve, with long-term rates falling faster than the Fed Funds Rate. When demand for bank reserves decreases because of a general slump in loan demand, then the Fed has to destroy bank reserves to prevent a collapse of Fed Funds Rate to zero.
Doomsday machine
A liquidity trap can be a serious problem because the world is still plagued with excess liquidity potential: massive foreign reserves held by central banks, bulging petrodollars, hedge funds and private-equity funds, massive increases in global monetary base, $4 trillion in low-yielding Chinese bank deposits ready for release for higher yields, $5 trillion in low-yielding US time deposits maturing, $10 trillion in low-yielding Japanese financial net worth, plus $27 trillion in medium-yielding US household financial net worth waiting to be monetized for aggressive yields. A global liquidity trap of with $50 trillion of idle assets will implode like a doomsday machine.
An US dollar exchange rate is a measure of the relative value of a foreign currency against the dollar, not the intrinsic value of the dollar. When the euro rises against the dollar, it is possible that both currencies have fallen in purchasing power, but the euro has merely fallen less than the dollar. This is what drives the liquidity boom that has been decoupled from the real economy.
Henry C K Liu is chairman of a New York-based private investment group. His website is at www.henryckliu.com.
Artikel vollständig einsehbar unter
http://www.atimes.com/atimes/Global_Economy/IE09Dj01.html
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Die Zinsen blieben unverändert bei 5,25 %, das Statement gleicht auch sehr dem letzten.
The 360
360 Degrees of the FOMC
Street.com Staff
5/9/2007 3:12 PM EDT
Editor's note: In this edition of "360 Degrees," Aaron Task, David Merkel, Liz Rappaport, Dan Fitzpatrick, Robert Marcin, Rev Shark and Tony Crescenzi tackle the latest Fed statement.
TheStreet.com has always believed that offering a wide variety of opinions and viewpoints -- rather than a monolithic "house view" -- helps readers make better-informed investment decisions. In that spirit, we bring you "360 Degrees," a feature that takes advantage of our varied stable of RealMoney contributors, who offer analysis of stocks and the markets from all angles.
Federal Open Market Committee
By Aaron Task
5/9/07 2:16 PM EDT
As was universally expected, the Fed left rates unchanged at its policy meeting today.
Accompanying statement: "Economic growth slowed in the first part of this year and the adjustment in the housing sector is ongoing. Nevertheless, the economy seems likely to expand at a moderate pace over coming quarters.
Core inflation remains somewhat elevated. Although inflation pressures seem likely to moderate over time, the high level of resource utilization has the potential to sustain those pressures.
In these circumstances, the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected. Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information."
FOMC: Free Our Markets, C'mon!
David Merkel
5/9/07 2:17 PM EDT
The Federal Open Market Committee left the fed funds target unchanged. The vote was unanimous.
The growth risk assessment was left at data dependent.
The prices risk assessment was left at inflation risk.
Overall, tone similar; core inflation seems high to the Fed; current policy and future changes to it should resolve all economic problems.
The 10-year Treasury yield was up 1.5 basis points in yield after two minutes. The S&P 500 was down 25 basis points.
We now return you to our regularly scheduled programming.
Fed Says 'Ditto'
By Liz Rappaport
5/9/07 2:24 PM EDT
The Fed essentially repeated the March Federal Open Market Committee statement that gave the central bank slightly more flexibility to hike or cut depending on the data's direction. Not much of a reaction in the market, but clearly bullish traders would have loved to see Bernanke tip his hand to a more dovish bent. Didn't happen. No big deal. Back to buyouts.
The Fed changed its characterization of economic growth to say "Economic growth slowed in the first part of this year and the adjustment in the housing sector is ongoing," from March's statement, "Recent indicators have been mixed and the adjustment in the housing sector is ongoing."
The Technical Setup
By Dan Fitzpatrick
5/9/07 2:21 PM EDT
Nothing done by the Fed. The first move is typically wrong, and we've seen a move to the downside. Looks like 1500 is holding on the S&P. Even better, the NDX is pushing through 1900.
All in all, how can you complain?
Position: net long -- no indexes though
Dimmed Chance for Rate Cut
By Robert Marcin
5/9/07 2:29 PM EDT
The Fed seems to have tempered the bulls' optimism for an imminent rate cut. It seems to me that they want to see the whites of the recession's eyes before beginning the rate-cut process. They probably want to avoid adding fuel to the liquidity bubble fire as well. Wall Street will probably find something in the release to set off another rally, though.
Uptrend Still in Place
By Rev Shark
5/9/2007 2:47 PM EDT
The bullish case following the FOMC statement is that the Fed has now formally acknowledged slowing economic growth, which might mean that it may be moving closer to a potential rate cut.
The bearish case is that the inflation issue is still open and may keep the Fed on hold. Also, if there really is a slowing economy, why are stocks going straight up? Are stocks ignoring reality, or is the Fed mistaken to talk about the possibility of continued economic weakness?
I'm not sure it makes all that much difference right now. The bulls still have plenty of momentum, and they aren't going to be scared away by this sort of nitpicking analysis. The upward trend is still firmly in place.
Fed Takes Baby Step
By Tony Crescenzi
5/9/2007 2:46 PM EDT
The Fed took what some will view as a baby step toward an eventual interest rate cut today by acknowledging the recent slowdown in economic activity.
The Fed did not, as some were hoping (see my earlier note), alter its view that inflation remains "elevated," perhaps helping to explain the initial knee-jerk movement downward in stock and bond prices.
In addition, the Fed continued to describe its dominant policy concern as titled toward the possibility of higher inflation, not weaker growth. A change to that statement would have been seen as a clear signal on a future interest rate cut.
To sum up, the Fed did the minimum that it could do without giving a stronger signal toward the possibility of a near-term interest rate cut. The Fed merely acknowledged that the economy had recently slowed. That's a statement about the past and hardly a predilection about the future.
To set the table for a cut, the Fed must do the following:
1.) Acknowledge slowing in the economy.
2.) Change its view on inflation from "elevated" to something more sanguine.
3.) Change its balance of risk statement and say that its predominant policy concern is the risk of weaker growth, now higher inflation.
Steps two and three are far more important that the first step, and the Fed took a pass on these today.
A superbear turns bullish
Commentary: A Dow theorist sees an 'unprecedented world boom'
By Mark Hulbert, MarketWatch
Last Update: 10:38 AM ET May 8, 2007
ANNANDALE, Va. (MarketWatch) - Has Richard Russell finally thrown in the towel on his long-standing bearishness?
You be the judge.
Richard Russell, of course, is editor of Dow Theory Letters, and the granddaddy of the investment newsletter world. He has been editing his newsletter continuously since 1958, nearly 50 years ago, longer than any other newsletter editor still publishing.
He's seen a lot of bull and bear markets, in other words. And his long-term record is superb. According to the Hulbert Financial Digest, his timing signals for the stock market's major trend rank at the top for risk-adjusted performance since 1980, when the HFD began monitoring the industry.
Nevertheless, Russell has failed to extend diplomatic recognition to the bull market that began in October 2002, arguing instead that a major bear market that began in late 1999 was still in progress. Fellow columnist Peter Brimelow even took to referring to Russell as a "grump."
Now read what Russell wrote last night on his website:
"We saw something that is extremely rare [on April 20 and April 25], in fact I can't remember ever having seen this before. What I'm referring to is that on those two dates all three Dow Jones Averages ( Industrials, Transports and Utilities ) closed at simultaneous historic highs. To me, a fellow steeped in Dow Theory for over half a century, this was like a clap of thunder... My take on the situation is that the stock market (and the Dow Theory) told us that an unprecedented world boom lies ahead."
Russell acknowledges that what he has written will surprise many who are accustomed to his long-standing caution about the stock market. He imagines that we will want to respond by saying "But Russell, you're usually so conservative, so restrained. How can you possibly talk this way? Now you're talking about a worldwide boom. Are you smoking something we don't know about?"
Russell's response:
"I stopped smoking over 40 year ago. No, I'm simply relating to you my interpretation of what the market is saying. I believe the markets talk in their own secret language. And when the market does something that has never been done before, that serves as a 'kick in the pants' for me. It's telling me, 'Russell, wake up. Something very unusual is going on. Get up out of your chair -- and pay attention'."
http://www.marketwatch.com/news/story/dow-theorist-sees-unprecedented-world/story.aspx?guid=%7B0F3873D5%2DA9E3%2D41B0%2DA600%2D79472399FD41%7D
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By Rev Shark
Street.com Contributor
5/9/2007 4:14 PM EDT
It probably wouldn't have mattered too much what the FOMC had said today, there are buyers who want in and they were going to find a reason to buy no matter what.
Of course, the fact that the FOMC didn't do anything at all probably made it easier for the bullish status quo to continue, and continue it did.
After some early fumbling about, the buyers jumped in once again, moved breadth solidly positive and sent every group except gold and drugs into the green.
We have new highs once again, but the weariness with this unrelenting rise seems to be growing. The action today felt particularly frothy in places as more and more takeover rumors surfaced and some very big point moves resulted.
Jumping in here is like jumping on a moving freight train. If you do it right, you can catch a nice ride, but if your timing is off, it can be painful. For many people who are being left at the station, it is so painful that they are happy to make the leap and hope for the best.
I'd really like to add some great insight about the market, but there isn't much more to say other than upside momentum is strong, and trying to guess when it will end is impossible. Either you keep chasing things higher or you stand aside. The worst thing you can do is try to fight it.
Date: 05.09.07
Time: 07:54pm
Buyers Ignore the Fed
Greetings Shark Investors:
For the second day in a row now, the market kicked of the day in a weak manner following some negative comments the previous evening from tech bellwether Cisco (CSCO) and a poor earnings report from Disney (DIS). Although a general lack of selling pressure allowed early dip buyers to move the averages higher throughout the morning session, albeit on light volume, the fact that market players were awaiting the interest rate decision from the Federal Open Market Committee didn’t lend a whole lot of conviction in the early going.
Although no one was expecting a change in interest rates today, the fear was that there might have been enough of a change to the language in the policy statement to cause investors to lock in some of their recent profits. Still, even if that were the case, the great likelihood was that the numerous investors still waiting for an opportunity to put their capital to work would use any weakness as their chance to dive in.
Once the statement was released, however, it was obvious that even though there were two very minor tweaks to the wording, Wednesday’s policy statement was almost an exact duplicate of the one they released back in March. Immediately following the news, the market took a few sudden and violent swings into negative territory, back into the green, and back into the red once again, but as the trading started to settle down, buyers gained control, moving the major indices as well as the small-caps higher.
Even though the tone of the statement still carries a cautious tone, balancing worries about the housing market and economic growth against continuing inflationary pressures, the main thing is that the Fed maintained the status quo, thus giving investors a good enough reason to just keep on buying.
As we have discussed numerous times, there are still many investors out there who are looking for a way to get in on the action, and as things move further and further away from them, the more painful it becomes to sit idly by. Either they jump in and hope that they’re not too late, or remain on the sidelines with the fervent hope that they’ve done the right thing. Regardless, there is a persistent buying pressure which is driving this momentum, and the worst thing that anyone can do at this point is to try and fight it.
Let’s go to the charts.
The Nasdaq finished the session higher on a pickup in volume. We opened lower, but managed to meander higher throughout the morning trading. As the afternoon came upon us, the Federal Reserve news kicked traders into gear. We initially spiked down, but recovered quickly to close just off highs. The action remains very strong, and we will be watching for a pullback that allows us some prudent entries into the charts.
The S&P 500 popped higher during Wednesday’s session on increasing volume. The index opened weak, but found buyers shortly thereafter. The action picked up steam during the afternoon session, and closed near highs. This powerful market continued higher today, leaving the underinvested bulls waiting for a pullback behind once again. We can’t seem to base out even for a couple days, which makes prudent entries very difficult to find. We are remaining patient at these levels, and will wait for the charts come to us.
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By Cody Willard
Street.com Contributor
5/9/2007 4:19 PM EDT
"It's a poor sort of memory that only works backwards." -- Lewis Carroll in Through the Looking Glass
It's a bull market, that's for sure. More classic bullish action today, too, as the markets traded right on up to new highs for the DJIA once again. It's as if the Fed didn't even make an announcement today. Which in some sense, it didn't! After all, the announcement was simply the governors saying, "We're not doing anything yet but we might at some point if we decide we should." Thanks for the update, Dan Rather.
And that's the story of the day, really -- that the markets are still on fire, along with every other asset class that you can point to, except for those that already fully bubbled such as domestic real estate and the Saudi stock market.
Let's hope that the endgame for all our financial markets and asset classes around the globe doesn't have to be the same. Certainly, there's little reason to expect that we're about to out-and-out crash tomorrow. But there's also a lot of excesses out there and 40% multi-week moves in the Chinese stock market. Remember that my "dislocation" gauge is a 2% intraday move in a major stock market index. That Shanghai index had a 3%-plus pop earlier this week. That's not bullish, even though it's part of the ongoing bull phase, if you follow me there.
That 150% move in the Chinese markets over the last year and a half would be like the DJIA hitting 30,000 before the end of 2008. How's that for some perspective?
In our country's stock markets, things are great, rocking and not quite out of control like they are in a lot of other countries and other asset classes. Gotta love the non-bubblicious 15% move off the semi's, and indeed, I've had some nice gains in several of those names since I started scaling into them a few months ago.
But I'm really getting outright bearish about the very near term here. Too many markets, asset classes, countries and commodities are moving too fast with too much synchronicity. Look up the term synchronicity and you'll see what I mean.
Auch verstehe ich den Begriff der liquiditätsgetriebenen Rallye nicht. Ohne Liquidität hat es noch nie eine Rallye gegeben. Es braucht dazu auch nicht laufend neuer Kredite. Man muss sich nur mal das Geschehen bei den Geldmarktfonds und kurzläufigen Renten anzuschauen und sehen was noch alles aus dieser Richtung drohen kann.
Also Entspannen ist angesagt und nicht falscher Aktionismus. Der falsche Aktionismus treibt die Bären in den Wahnsinn und zum Schluss werden sie dann noch Bullen.
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a) Verkäufer packen zu den Häusern incentives dazu (Autos, Pools, etc.) um den ursprünglichen Verkaufspreis zu halten; real sinkt der Preis natürlich, das taucht allerdings in den Statistiken nicht auf.
b) Inflation ist natürlich auch ein Faktor. Der Median Preis wird nur nominal ausgewiesen. eine Entwicklung von +/- 0 bedeutet real einen Preisverlust i.H. der Inflationsrate.
c) Durch das Wegfallen der subprime-Kundschaft fallen die Effekte durch sogenannte Trade-Up Deals weg. Jemand verkauft ein Haus an einen subprime-Kunden für 150T und zieht aufgrund besserer ök. Verhältnisse in ein Haus für 200T. Der Verkäufer dieses Hauses wiederum kauft ein Haus für 250T... das hat zur Folge, daß die negative Entwicklung am Hausmarkt auf die hochpreisigen Immos zeitlich verzögert eintritt, was aber mittlerweile auch immer näher rückt:
http://www.bloomberg.com/apps/...06&refer=realestate&sid=aHBopkXhEA24
Wenn also zunächst die niedrig-preisigen Hausverkäufe ausbleiben, und die hochpreisigen weiterlaufen, hat das natürlich einen positiven Effekt auf den Median Preis.
Aus c) folgt ein zunehmender Druck auf den Median Preis.
Weiterer Druck kommt aus der Angebots- und Nachfrage-Situation.
Die Inventories sind auf Rekordhoch, obwohl einige Makler schwer verkäufliche Häuser für einen Monat vom Markt nehmen (um sie dann im nächsten Monat als neu in ihre Liste aufzunehmen). Zusätzlich kommen durch Zwangsversteigerungen ständig mehr Häuser auf den Markt (Diese sind nicht mal in der Statistik der NAR enthalten). Die Zwangsverteigerungen werden weiter ansteigen (s. dazu Chart unten).
Das Angebot steigt also, selbst, wenn einige homebuilder ihre Produktion etwas zurückfahren.
Die Nachfrage wird weiter sinken. Erstens durch die Marktpsychologie; wieso sollte ich jetzt kaufen, wenn sogar die NAR für das laufende Jahr einen Preisrückgang vorhersagt; dazu hab ich noch gehört, daß die Fed gegen Ende des Jahres die Zinsen senken wird. Also warte ich noch 6 Monate. Dann komm ich günstiger ans Haus und an den Kredit. Zweitens führt die Kreditrestriktion ausgelöst durch die subprime-Krise dazu, daß selbst halbwegs kreditwürdige Käufer einfach keinen loan mehr bekommen.
Die Spirale dreht sich und die wirtschaftliche Abkühlung wird ihr übriges dazu tun.
Wenn der Arbeitsmarkt anfängt zu schwächeln, wird das ganze Szenario nochmal um einiges düsterer.
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