Bund Tbond: choppers attack over EbenEm@il vm1727
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gipa69
collegio dei patafisici
mmmhhhhhh.
Will the next crisis be prandial?
Gillian Tett worries it will. And so does Goldman Sachs:
We think we could go into crisis mode in many commodities sectors in the next 12 to 18 months . . . and I would argue that agriculture is key here.
Commodity shocks don’t only happen in oil. Rising food prices pack a powerful political punch in the developing (or partly-developed) world, to a degree sometimes underappreciated by the pampered west, argues Tett.
Jeff Currie, head of commodities research at Goldman, sees this as part of a bigger problem in capital and resource allocation. If the world were a rational economic place, then regions such as the Gulf which are food-constrained ought to be investing heavily in agriculture. And since the US is the world’s biggest agricultural supplier, this implies that the Saudi Arabians, say, should be snapping up farms in Wisconsin - as America secures oil in the most efficient manner by sending teams of Texans to Riyadh.
But controls prevent that - and mutual mistrust is now rising. The result? More inflation, even in a downturn.
Tett concludes:
But leaving aside this very real human tragedy, what should also be crystal clear for investors is that this is not a picture that points to 21st-century capital markets progress; nor is it likely to breed stability in the medium term. Anyone who thinks this decade’s problems start and end with credit, in other words, may yet receive a rude shock; sadly, we live in a world where soyabeans may yet pack as painful a punch as subprime.
Will the next crisis be prandial?
Gillian Tett worries it will. And so does Goldman Sachs:
We think we could go into crisis mode in many commodities sectors in the next 12 to 18 months . . . and I would argue that agriculture is key here.
Commodity shocks don’t only happen in oil. Rising food prices pack a powerful political punch in the developing (or partly-developed) world, to a degree sometimes underappreciated by the pampered west, argues Tett.
Jeff Currie, head of commodities research at Goldman, sees this as part of a bigger problem in capital and resource allocation. If the world were a rational economic place, then regions such as the Gulf which are food-constrained ought to be investing heavily in agriculture. And since the US is the world’s biggest agricultural supplier, this implies that the Saudi Arabians, say, should be snapping up farms in Wisconsin - as America secures oil in the most efficient manner by sending teams of Texans to Riyadh.
But controls prevent that - and mutual mistrust is now rising. The result? More inflation, even in a downturn.
Tett concludes:
But leaving aside this very real human tragedy, what should also be crystal clear for investors is that this is not a picture that points to 21st-century capital markets progress; nor is it likely to breed stability in the medium term. Anyone who thinks this decade’s problems start and end with credit, in other words, may yet receive a rude shock; sadly, we live in a world where soyabeans may yet pack as painful a punch as subprime.
gipa69
collegio dei patafisici
Natixis tumbles on more credit pain
There’s another spot of French banking difficulty. And this time it can’t be laid at the door of a lone trader.
Shares in Natixis, the investment bank created by mutuals Banques Populaires and Caisses d’Epargne in December 2006, fell more than 14 per cent after it came clean late on Thursday on its losses related to the credit crisis.
The writedowns will reduce Natixis’ full year net income to about €1bn, about half of that expected. The bank will make total writedowns of €228m on RMBS, €360m on ABS CDOs, and €229m related to conduits. It has also marked €258m of subprime loans yet to be syndicated to €201m.
In addition, the bank will log losses of €380m on a total of €1.14bn in credit enhancements it had purchased from the monolines. Almost half of its exposure is to MBIA. Natixis though is well acquainted with the plight of the bond insurers. Its own bond insurance business, CIFG, had to be bailed out in November by Natixis’ controlling shareholders, who pledged to inject the $1.5bn required for it to maintain its crucial AAA rating. Fortunately for Natixis, the €369bn after tax hit related to the sale of CIFG is broadly balanced by exceptional gains, such as on the sale of the bank’s head office.
But the figures showed a marked deterioration since the third quarter, when Natixis said that the subprime-led crisis in credit markets would cost it €407m. Even more so from its position in August, when the French bank described its exposure as “limited and well managed.”
Since the summer, of course, events have spiralled out of control, and just kept on going. In the circumstances, it seems brave (or is that foolish?) for Natixis to say it will raise capital to pay a dividend, amounting to 50 per cent of the final net income. Particularly when the performance of areas such as asset management, private equity and services and receivables management is described only as “quite satisfactory.”
There’s another spot of French banking difficulty. And this time it can’t be laid at the door of a lone trader.
Shares in Natixis, the investment bank created by mutuals Banques Populaires and Caisses d’Epargne in December 2006, fell more than 14 per cent after it came clean late on Thursday on its losses related to the credit crisis.
The writedowns will reduce Natixis’ full year net income to about €1bn, about half of that expected. The bank will make total writedowns of €228m on RMBS, €360m on ABS CDOs, and €229m related to conduits. It has also marked €258m of subprime loans yet to be syndicated to €201m.
In addition, the bank will log losses of €380m on a total of €1.14bn in credit enhancements it had purchased from the monolines. Almost half of its exposure is to MBIA. Natixis though is well acquainted with the plight of the bond insurers. Its own bond insurance business, CIFG, had to be bailed out in November by Natixis’ controlling shareholders, who pledged to inject the $1.5bn required for it to maintain its crucial AAA rating. Fortunately for Natixis, the €369bn after tax hit related to the sale of CIFG is broadly balanced by exceptional gains, such as on the sale of the bank’s head office.
But the figures showed a marked deterioration since the third quarter, when Natixis said that the subprime-led crisis in credit markets would cost it €407m. Even more so from its position in August, when the French bank described its exposure as “limited and well managed.”
Since the summer, of course, events have spiralled out of control, and just kept on going. In the circumstances, it seems brave (or is that foolish?) for Natixis to say it will raise capital to pay a dividend, amounting to 50 per cent of the final net income. Particularly when the performance of areas such as asset management, private equity and services and receivables management is described only as “quite satisfactory.”
