Macroeconomia Crisi finanziaria e sviluppi (1 Viewer)
- Creatore Discussione METHOS
- Data di Inizio
stockuccio
Guest
commenti su 'OCC’s Quarterly Report on Bank Trading and Derivatives Activities Fourth Quarter 2008'
http://www.moneyandmarkets.com/alarming-news-bank-losses-spreading-32910
PS ... vedo che la decrescita felice non fa presa, non stimola ... d'altronde su un forum finanziario è difficile
http://www.moneyandmarkets.com/alarming-news-bank-losses-spreading-32910
PS ... vedo che la decrescita felice non fa presa, non stimola ... d'altronde su un forum finanziario è difficile
METHOS
Forumer storico
Avanzano le scelte dei singoli Stati, ma c'è un contenuto di nazionalismo economico»
«Il G20 fallirà, nessuna soluzione globale»
Il sociologo Ralf Dahrendorf: «Ridurremo i nostri standard
di vita del 20%, torneremo agli anni Cinquanta e Sessanta»
Dal nostro inviato Danilo Taino
Ralf Dahrendorf (Grazia Neri)COLONIA - Ralf Dahrendorf è sicuro che il vertice del G20 di Londra, il prossimo 2 aprile, fallirà. «Fallirà, non raggiungerà gli obiettivi che gli erano stati dati originariamente, cioè essere il momento decisivo per uscire dalla crisi e ridisegnare l'ordine economico internazionale - sostiene -. Per molti motivi, ma soprattutto perché quello che stiamo vivendo non è un Bretton Woods moment». Il sociologo forse più autorevole d'Europa - ma anche politico, politologo, filosofo, educatore e membro della Camera dei Lord britannica nonostante sia di origine tedesca - non ha praticamente parlato in pubblico della crisi mondiale. Lo fa con questa intervista.
Lord Dahrendorf, perché non siamo in un «momento Bretton Woods»?
«Quando Keynes entrò alla conferenza di Bretton Woods, nel 1944, credeva di andare a salvare la sterlina. In breve tempo si accorse che era morta, che il ruolo dominante era passato al dollaro e agli Stati Uniti. Ora, la situazione è diversa, questa è una fase confusa, dove non ci sono vincitori. E non sono nemmeno certo che l'America voglia caricarsi sulle spalle da sola il peso dell'uscita dalla crisi. Ma non è l'unica ragione per cui il vertice non sarà un successo».
Quali altre ragioni?
«Io stimo Barack Obama e Gordon Brown, ma in questo caso sbagliano. Ritengono che questa sia una crisi globale, mentre la possiamo definire mondiale ma non globale. Globale è il cambiamento climatico, che non può avere risposte nazionali. Ma la crisi riguarda sì tutti, cioè è mondiale, ma ha risposte nazionali, e queste contengono un nazionalismo economico. Io li vedo come globalisti, al contrario di Angela Merkel e Nicolas Sarkozy che sono mondialisti. Questa è l'origine del conflitto che sta alla radice del G20 del 2 aprile: è sbagliato credere che ci siano soluzioni globali».
Cosa intende per fallimento del vertice?
«Non ci sarà accordo su un pacchetto di stimolo "globale". Ci saranno dichiarazioni generiche sulle nuove regole da scrivere. Forse verrà un po' rafforzato il Fondo monetario internazionale. E si identificheranno alcuni capri espiatori, in particolare i paradisi fiscali. Niente di davvero importante, tanto che tutti sono impegnati ad abbassare le aspettative, il padrone di casa Brown in testa, dopo che le avevano alzate moltissimo».
Quali sono le conseguenze della crisi, nel lungo periodo?
«Alla fine tutti avremo ridotto gli standard di vita di almeno un 20%. Torneremo circa ai livelli precedenti a quelli di Ronald Reagan e Margaret Thatcher. Per alcuni aspetti, a un modo di vivere che somiglierà un po' agli anni Cinquanta e Sessanta, con molta più tecnologia ma senza l'ottimismo di quei decenni».
Anche quando inizierà la ripresa?
«La ripresa sarà lunga e lenta. E non basterà a servire gli interessi sul debito che nel frattempo gli Stati stanno accumulando. Ragione per cui sarà un periodo di tasse alte e alta inflazione. Niente di bello. Alcuni economisti parlano di "inflazione controllata", sostengono cioè che qualche anno di inflazione tra il 6 e il 10% basterà a ridimensionare i debiti pubblici. Il problema è che un'inflazione del genere sarà pagata soprattutto dai poveri e dai pensionati».
Visione nera.
«Se vogliamo metterle un po' di belletto, possiamo forse prevedere che la crisi porterà un cambio di attitudine, con più attenzione all'economia reale e un distacco dalla cultura del debito e dal capitalismo del debito. Il ricorso alle carte di credito sarà mitigato, sarà forse un clima più piacevole».
Cultura del debito?
«Sì, la cultura diffusa, ma molto diffusa, per la quale mettevi lì cinquanta euro e ti pareva normale che ti dessero un'automobile o una casa. Può non piacere a molti, che preferiscono dare ogni responsabilità ai banchieri e ai paradisi fiscali, ma credo che questa sia la ragione principale della crisi».
Prima responsabile non è dunque la deregulation degli anni di Reagan e Thatcher?
«Ci sono alcuni aspetti di quella deregulation che entrano tra le ragioni della crisi. Ma non andrei troppo avanti su questa strada. Perché alla base della crisi c'è soprattutto la cultura del debito e la bolla conseguente. Un mio conoscente mi raccontava l'altro giorno che ha uno chalet da vendere a Chamonix e che, all'improvviso, si è accorto che a nessuno al mondo serve uno chalet a Chamonix. Non più, perché il mondo sta riducendo di quel 20% le sue esigenze. Ma questo non c'entra niente con la signora Thatcher, la quale, di base vittoriana, aveva anzi orrore del debito».
Pericoli di violenza a causa della crisi?
«Non vedo un ritorno del terrorismo domestico. Ma c'è una grande rabbia diffusa, la voglia di trovare colpevoli. Per ora non ha sbocchi politici, è individuale, come abbiamo visto negli attacchi alle case di banchieri, o si incanala in manifestazioni di massa tradizionali come quelle delle tifoserie del calcio».
La democrazia potrebbe correre dei rischi?
«La democrazia direttamente no, anche se ci saranno spostamenti politici. Diverso è il discorso per la società aperta, perché la crisi non favorisce le libertà. Le scelte dei governi di nazionalizzare banche e forse anche certe industrie riducono le libertà. Non saranno tempi belli».
C'è chi dice che il vero potere non starà nel G20 ma nel G2, cioè Washington più Pechino.
«Forse, anche se non vedo fino in fondo come Stati Uniti e Cina, che non si piacciono, possano andare davvero d'accordo. Credo però che quasi certamente l'Europa non ci sarà alla guida del mondo: i leader europei vanno per strade diverse e soprattutto chiedono a Bruxelles di ridurre, allentare il mercato unico».
31 marzo 2009
«Il G20 fallirà, nessuna soluzione globale»
Il sociologo Ralf Dahrendorf: «Ridurremo i nostri standard
di vita del 20%, torneremo agli anni Cinquanta e Sessanta»
Dal nostro inviato Danilo Taino
Lord Dahrendorf, perché non siamo in un «momento Bretton Woods»?
«Quando Keynes entrò alla conferenza di Bretton Woods, nel 1944, credeva di andare a salvare la sterlina. In breve tempo si accorse che era morta, che il ruolo dominante era passato al dollaro e agli Stati Uniti. Ora, la situazione è diversa, questa è una fase confusa, dove non ci sono vincitori. E non sono nemmeno certo che l'America voglia caricarsi sulle spalle da sola il peso dell'uscita dalla crisi. Ma non è l'unica ragione per cui il vertice non sarà un successo».
Quali altre ragioni?
«Io stimo Barack Obama e Gordon Brown, ma in questo caso sbagliano. Ritengono che questa sia una crisi globale, mentre la possiamo definire mondiale ma non globale. Globale è il cambiamento climatico, che non può avere risposte nazionali. Ma la crisi riguarda sì tutti, cioè è mondiale, ma ha risposte nazionali, e queste contengono un nazionalismo economico. Io li vedo come globalisti, al contrario di Angela Merkel e Nicolas Sarkozy che sono mondialisti. Questa è l'origine del conflitto che sta alla radice del G20 del 2 aprile: è sbagliato credere che ci siano soluzioni globali».
Cosa intende per fallimento del vertice?
«Non ci sarà accordo su un pacchetto di stimolo "globale". Ci saranno dichiarazioni generiche sulle nuove regole da scrivere. Forse verrà un po' rafforzato il Fondo monetario internazionale. E si identificheranno alcuni capri espiatori, in particolare i paradisi fiscali. Niente di davvero importante, tanto che tutti sono impegnati ad abbassare le aspettative, il padrone di casa Brown in testa, dopo che le avevano alzate moltissimo».
Quali sono le conseguenze della crisi, nel lungo periodo?
«Alla fine tutti avremo ridotto gli standard di vita di almeno un 20%. Torneremo circa ai livelli precedenti a quelli di Ronald Reagan e Margaret Thatcher. Per alcuni aspetti, a un modo di vivere che somiglierà un po' agli anni Cinquanta e Sessanta, con molta più tecnologia ma senza l'ottimismo di quei decenni».
Anche quando inizierà la ripresa?
«La ripresa sarà lunga e lenta. E non basterà a servire gli interessi sul debito che nel frattempo gli Stati stanno accumulando. Ragione per cui sarà un periodo di tasse alte e alta inflazione. Niente di bello. Alcuni economisti parlano di "inflazione controllata", sostengono cioè che qualche anno di inflazione tra il 6 e il 10% basterà a ridimensionare i debiti pubblici. Il problema è che un'inflazione del genere sarà pagata soprattutto dai poveri e dai pensionati».
Visione nera.
«Se vogliamo metterle un po' di belletto, possiamo forse prevedere che la crisi porterà un cambio di attitudine, con più attenzione all'economia reale e un distacco dalla cultura del debito e dal capitalismo del debito. Il ricorso alle carte di credito sarà mitigato, sarà forse un clima più piacevole».
Cultura del debito?
«Sì, la cultura diffusa, ma molto diffusa, per la quale mettevi lì cinquanta euro e ti pareva normale che ti dessero un'automobile o una casa. Può non piacere a molti, che preferiscono dare ogni responsabilità ai banchieri e ai paradisi fiscali, ma credo che questa sia la ragione principale della crisi».
Prima responsabile non è dunque la deregulation degli anni di Reagan e Thatcher?
«Ci sono alcuni aspetti di quella deregulation che entrano tra le ragioni della crisi. Ma non andrei troppo avanti su questa strada. Perché alla base della crisi c'è soprattutto la cultura del debito e la bolla conseguente. Un mio conoscente mi raccontava l'altro giorno che ha uno chalet da vendere a Chamonix e che, all'improvviso, si è accorto che a nessuno al mondo serve uno chalet a Chamonix. Non più, perché il mondo sta riducendo di quel 20% le sue esigenze. Ma questo non c'entra niente con la signora Thatcher, la quale, di base vittoriana, aveva anzi orrore del debito».
Pericoli di violenza a causa della crisi?
«Non vedo un ritorno del terrorismo domestico. Ma c'è una grande rabbia diffusa, la voglia di trovare colpevoli. Per ora non ha sbocchi politici, è individuale, come abbiamo visto negli attacchi alle case di banchieri, o si incanala in manifestazioni di massa tradizionali come quelle delle tifoserie del calcio».
La democrazia potrebbe correre dei rischi?
«La democrazia direttamente no, anche se ci saranno spostamenti politici. Diverso è il discorso per la società aperta, perché la crisi non favorisce le libertà. Le scelte dei governi di nazionalizzare banche e forse anche certe industrie riducono le libertà. Non saranno tempi belli».
C'è chi dice che il vero potere non starà nel G20 ma nel G2, cioè Washington più Pechino.
«Forse, anche se non vedo fino in fondo come Stati Uniti e Cina, che non si piacciono, possano andare davvero d'accordo. Credo però che quasi certamente l'Europa non ci sarà alla guida del mondo: i leader europei vanno per strade diverse e soprattutto chiedono a Bruxelles di ridurre, allentare il mercato unico».
31 marzo 2009
troppidebiti
Forumer storico
*** Fortis: 28 mld il 'rosso' 2008, piu' alto del previsto (22,5 mld)
A causa delle perdite accusate dalle attivita' bancarie
(Il Sole 24 Ore Radiocor) - Bruxelles, 31 mar - La holding
finanziaria belgo-olandese Fortis ha chiuso il 2008 con una
perdita netta di 28 miliardi di euro, superiore ai 22,5
miliardi anticipati a meta' marzo. Lo ha annunciato la banca
che l'anno scorso e' stata smembrata nel quadro di un piano
di salvataggio pubblico gestito dai Governi di Olanda,
Belgio e Lussemburgo. Le perdite sono da ricondursi
principalmente alle attivita' bancarie. L'istituto ha gia'
preannunciato di non essere in grado di versare un dividendo
per il 2008.
Red-mir-y-
(Il Sole 24 Ore Radiocor) - Bruxelles, 31 mar - La holding
finanziaria belgo-olandese Fortis ha chiuso il 2008 con una
perdita netta di 28 miliardi di euro, superiore ai 22,5
miliardi anticipati a meta' marzo. Lo ha annunciato la banca
che l'anno scorso e' stata smembrata nel quadro di un piano
di salvataggio pubblico gestito dai Governi di Olanda,
Belgio e Lussemburgo. Le perdite sono da ricondursi
principalmente alle attivita' bancarie. L'istituto ha gia'
preannunciato di non essere in grado di versare un dividendo
per il 2008.
Red-mir-y-
paologorgo
Chapter 11
U.S. Dept. of Health & Human Services launches a new website that provides 'practical advice on how to deal with the effects financial difficulties can have on your physical and mental health.'
METHOS
Forumer storico
Dunque questi sono i miei, direi che sono ben messo...
Persistent Sadness
Excessive Anxiety
Excessive Irritability/Anger
Difficulty paying attention or staying focused
Apathy - not caring about things that are usually important to you
Not being able to function as well at work, school or home
yellow
Forumer attivo
Segnali 
negativi nelle ultime settimane dall'indice dei noli marittimi che dopo aver varcato quota 2000 è indietreggiato :http://www.bloomberg.com/apps/quote?ticker=bdiy&exch=IND&x=15&y=11
D'altra parte un indicatore industrialmente importante come il Rame,
è in " relativa " salute :http://www.bloomberg.com/apps/news?pid=20602013&sid=aIW.CQikILlk&refer=commodity_futures
negativi nelle ultime settimane dall'indice dei noli marittimi che dopo aver varcato quota 2000 è indietreggiato :http://www.bloomberg.com/apps/quote?ticker=bdiy&exch=IND&x=15&y=11D'altra parte un indicatore industrialmente importante come il Rame,
è in " relativa " salute :http://www.bloomberg.com/apps/news?pid=20602013&sid=aIW.CQikILlk&refer=commodity_futures
paologorgo
Chapter 11
stockuccio
Guest
plaudo a Yellow per la sua ricerca di positività ... mi fa da contraltare ...
il 2 aprile è ormai arrivato ... Sarkò punta i piedi il 2 aprile è ormai arrivato ... http://www.ilsole24ore.com/art/Sole...c7-11de-b649-e38bead96d2b&DocRulesView=Libero ... spero gli altri europei non lo isolino .... ecchecc.....
vabbè, la notizia proviene dal caro Ambrose http://www.telegraph.co.uk/finance/...-Gold-Standard-to-solve-financial-crisis.html ...
Arkady Dvorkevich, the Kremlin's chief economic adviser, said Russia would favour the inclusion of gold bullion in the basket-weighting of a new world currency based on Special Drawing Rights issued by the International Monetary Fund.
Chinese and Russian leaders both plan to open debate on an SDR-based reserve currency as an alternative to the US dollar at the G20 summit in London this week, although the world may not yet be ready for such a radical proposal.
Mr Dvorkevich said it was "logical" that the new currency should include the rouble and the yuan, adding that "we could also think about more effective use of gold in this system".
The Gold Standard was the anchor of world finance in the 19th Century but began breaking down during the First World War as governments engaged in unprecedented spending. It collapsed in the 1930s when the British Empire, the US, and France all abandoned their parities.
It was revived as part of fixed dollar system until US inflation caused by the Vietnam War and "Great Society" social spending forced President Richard Nixon to close the gold window in 1971.
The world's fiat paper currencies have lacked any external anchor ever since. It is widely argued that the financial excesses and extreme debt leverage of the last quarter century would have been impossible - or less likely - under the discipline of gold.
Russia is a major gold producer with large untapped reserves of ore so it has a clear interest in promoting the idea. The Kremlin has already instructed the central bank of gradually raise the gold share of foreign reserves to 10pc.
China's government has floated a variant of this idea, suggesting a currency based on 30 commodities along the lines of the "Bancor" proposed by John Maynard Keynes in 1944.
io dico ... ma come si fa a adre ancora soldi a questi soggetti ... http://www.bloomberg.com/apps/news?pid=20601091&sid=awSxPMGzDW38&refer=india
Mark-to-Market Lobby Buoys Bank Profits 20% as FASB May Say Yes
By Ian Katz and Jesse Westbrook
March 30 (Bloomberg) -- Four days after U.S. lawmakers berated Financial Accounting Standards Board Chairman Robert Herz and threatened to take rulemaking out of his hands, FASB proposed an overhaul of fair-value accounting that may improve profits at banks such as Citigroup Inc. by more than 20 percent.
The changes proposed on March 16 to fair-value, also known as mark-to-market accounting, would allow companies to use “significant judgment” in valuing assets and reduce the amount of writedowns they must take on so-called impaired investments, including mortgage-backed securities. A final vote on the resolutions, which would apply to first-quarter financial statements, is scheduled for April 2.
FASB’s acquiescence followed lobbying efforts by the U.S. Chamber of Commerce, the American Bankers Association and companies ranging from Bank of New York Mellon Corp., the world’s largest custodian of financial assets, to community lender Brentwood Bank in Pennsylvania. Former regulators and accounting analysts say the new rules would hurt investors who need more transparency, not less, in financial statements.
Officials at Norwalk, Connecticut-based FASB were under “tremendous pressure” and “more or less eviscerated mark-to- market accounting,” said Robert Willens, a former managing director at Lehman Brothers Holdings Inc. who runs his own tax and accounting advisory firm in New York. “I’d say there was a pretty close cause and effect.”
Willens, investor-advocate groups including the CFA Institute in Charlottesville, Virginia, and former U.S. Securities and Exchange Commission Chairman Arthur Levitt oppose changes that would enable banks to put off reporting losses.
‘Outrageous Threats’
“What disturbs me most about the FASB action is they appear to be bowing to outrageous threats from members of Congress who are beholden to corporate supporters,” said Levitt, now a senior adviser at buyout firm Carlyle Group and a board member at Bloomberg LP, the parent of Bloomberg News.
FASB spokesman Neal McGarity said the proposal allowing significant judgment was “in the works prior to the Washington hearing and was merely accelerated for the first quarter, instead of the second quarter.” The plan on impaired investments “was an attempt to address an important financial reporting issue that has emerged from the financial crisis,” he said.
Mary Schapiro, sworn in as SEC chairman in January, testified to Congress on March 11 that the agency recommends “more judgment in the application, so that assets are not being written down to fire-sale prices.”
Unrealized Losses
Goldman Sachs Group Inc. investment strategist Abby Joseph Cohen and Nouriel Roubini, the New York University professor who predicted last year’s economic crisis, made bearis
il 2 aprile è ormai arrivato ... Sarkò punta i piedi il 2 aprile è ormai arrivato ... http://www.ilsole24ore.com/art/Sole...c7-11de-b649-e38bead96d2b&DocRulesView=Libero ... spero gli altri europei non lo isolino .... ecchecc.....
vabbè, la notizia proviene dal caro Ambrose
http://www.telegraph.co.uk/finance/...-Gold-Standard-to-solve-financial-crisis.html ... Arkady Dvorkevich, the Kremlin's chief economic adviser, said Russia would favour the inclusion of gold bullion in the basket-weighting of a new world currency based on Special Drawing Rights issued by the International Monetary Fund.
Chinese and Russian leaders both plan to open debate on an SDR-based reserve currency as an alternative to the US dollar at the G20 summit in London this week, although the world may not yet be ready for such a radical proposal.
Mr Dvorkevich said it was "logical" that the new currency should include the rouble and the yuan, adding that "we could also think about more effective use of gold in this system".
The Gold Standard was the anchor of world finance in the 19th Century but began breaking down during the First World War as governments engaged in unprecedented spending. It collapsed in the 1930s when the British Empire, the US, and France all abandoned their parities.
It was revived as part of fixed dollar system until US inflation caused by the Vietnam War and "Great Society" social spending forced President Richard Nixon to close the gold window in 1971.
The world's fiat paper currencies have lacked any external anchor ever since. It is widely argued that the financial excesses and extreme debt leverage of the last quarter century would have been impossible - or less likely - under the discipline of gold.
Russia is a major gold producer with large untapped reserves of ore so it has a clear interest in promoting the idea. The Kremlin has already instructed the central bank of gradually raise the gold share of foreign reserves to 10pc.
China's government has floated a variant of this idea, suggesting a currency based on 30 commodities along the lines of the "Bancor" proposed by John Maynard Keynes in 1944.
io dico ... ma come si fa a adre ancora soldi a questi soggetti ... http://www.bloomberg.com/apps/news?pid=20601091&sid=awSxPMGzDW38&refer=india
Mark-to-Market Lobby Buoys Bank Profits 20% as FASB May Say Yes
By Ian Katz and Jesse Westbrook
March 30 (Bloomberg) -- Four days after U.S. lawmakers berated Financial Accounting Standards Board Chairman Robert Herz and threatened to take rulemaking out of his hands, FASB proposed an overhaul of fair-value accounting that may improve profits at banks such as Citigroup Inc. by more than 20 percent.
The changes proposed on March 16 to fair-value, also known as mark-to-market accounting, would allow companies to use “significant judgment” in valuing assets and reduce the amount of writedowns they must take on so-called impaired investments, including mortgage-backed securities. A final vote on the resolutions, which would apply to first-quarter financial statements, is scheduled for April 2.
FASB’s acquiescence followed lobbying efforts by the U.S. Chamber of Commerce, the American Bankers Association and companies ranging from Bank of New York Mellon Corp., the world’s largest custodian of financial assets, to community lender Brentwood Bank in Pennsylvania. Former regulators and accounting analysts say the new rules would hurt investors who need more transparency, not less, in financial statements.
Officials at Norwalk, Connecticut-based FASB were under “tremendous pressure” and “more or less eviscerated mark-to- market accounting,” said Robert Willens, a former managing director at Lehman Brothers Holdings Inc. who runs his own tax and accounting advisory firm in New York. “I’d say there was a pretty close cause and effect.”
Willens, investor-advocate groups including the CFA Institute in Charlottesville, Virginia, and former U.S. Securities and Exchange Commission Chairman Arthur Levitt oppose changes that would enable banks to put off reporting losses.
‘Outrageous Threats’
“What disturbs me most about the FASB action is they appear to be bowing to outrageous threats from members of Congress who are beholden to corporate supporters,” said Levitt, now a senior adviser at buyout firm Carlyle Group and a board member at Bloomberg LP, the parent of Bloomberg News.
FASB spokesman Neal McGarity said the proposal allowing significant judgment was “in the works prior to the Washington hearing and was merely accelerated for the first quarter, instead of the second quarter.” The plan on impaired investments “was an attempt to address an important financial reporting issue that has emerged from the financial crisis,” he said.
Mary Schapiro, sworn in as SEC chairman in January, testified to Congress on March 11 that the agency recommends “more judgment in the application, so that assets are not being written down to fire-sale prices.”
Unrealized Losses
Goldman Sachs Group Inc. investment strategist Abby Joseph Cohen and Nouriel Roubini, the New York University professor who predicted last year’s economic crisis, made bearis
stockuccio
Guest
piano piano ritorna alla normalità il noto Dr. Doom
There may eventually be light at the end of the tunnel…but not as soon and fast as the bullish consensus makes it: CNBC Squawk Box Interview
Nouriel Roubini | Mar 31, 2009
I was interviewed this morning on CNBC’s Squawk Box on my views on the economy, on the stock market, on the problems with the banks, the Geithner plan and whether there is light at the end of the tunnel.
The full video of this longish interview is available here.
As I pointed out in the interview – consistent with my views for the last several months - the rate of economic contraction will slow from the -6% of Q1 to a figure closer to -2% and next year the economic recovery will be so weak – growth below 1% and unemployment rate peaking at 10% - that it will still feel like a recession even if we may be technically out of it. So, compared to the bullish consensus that sees positive growth at 2% by Q3-Q4 of this year and return to potential growth by 2010 my views are still consistently more bearish than the consensus. Still, compared to the sharp contraction in US and global growth in Q1 of this year (about -6%) the rate of economic contraction will slow down towards -2% for the US and other advanced economies by year end. That is only a mild improvement and still a severe U-shaped recession with a very weak and tentative recovery by 2010.
Let me explain next in more detail my economic outlook and its implications for financial markets:
In the CNBC interview I also pointed out that the stock market has predicted six out of the last zero economic recovery: for the last 18 months we have had six bear market rally and at the beginning of each one of these sucker’s rallies the delusional perma-bulls repeated that this was the beginning of a bull market rally. And for six times these perma-bulls were totally wrong as the bear market rally fizzled and new lows were reached. And for six times I correctly pointed out that these were bear market rallies; but such perma-bulls have no shame in showing up over and over again on CNBC for the last two years and talking their books and being proven wrong over and over again. As I have never been a “perma-bear” in spite of the Dr. Doom nickname I will be the first one to call for the bottom of this severe recession and the bottom of the bear market when I see sustained evidence of robust and consistent economic recovery. I see the latest rally as another bear market rally as over the next few months news will be worse than expected by the consensus: macro news, earnings news, financial news, corporate default news, financial firms insolvency news, etc. Look how wobbly the stock market was yesterday when the expected news that the Big Three are in big trouble led to a 3-4% market fall. Do you listen to Tim Geithner who says that some banks need “large amounts of assistance" and who is now pushing - like Bernanke - for fast track Congressional approval of a law that will allow to takeover systemically important financial institutions and bank holding companies? This market recovery has still very shaky legs and it will until the US and global economic recovery does occur and is more robust and sustained.
The global economic contraction is still very severe: in the Eurozone and Japan there is no evidence of “green shoots” or positive second derivatives; and in the US and China such evidence is still very very weak. So investors and markets are way ahead of actual improvements in economic data. And the idea that stock prices are forward looking and bottom out six to nine months before the end of a recession is incorrect. First, you already had six bear market rallies and stock prices predicted six out of the last zero economic recoveries. Second, in 2001 a short and shallow 8 months recession was over by November but stock prices kept on falling for another 16 months until March of 2003 as the recovery was shallow, as job losses continued until 2003, as deflationary forces controlled pricing power of firms and limited the recovery of earnings, as corporate defaults spiked all the way to 13% of outstanding junk bonds. This time around the recession will be at least 24 months - three times as long and five times deeper in terms of GDP contraction – than the one in 2001. This time the deflationary forces are global, not just in the US and Japan as you got a severe global recession; thus pricing power of the corporate sector and earnings recovery will be weak with such sharp global deflationary pressures. This time you have the worst financial crisis and banking crisis since the Great Depression while in 2001 there was no banking crisis. This time you got the worst housing recession since the Great Depression with home prices still bound to fall another 15-20% for a cumulative fall of 40-45%. This time corporate default rates on junk bonds are predicted by Moody’s to peak at 20%, not the13% of the previous recession. Thus, the idea that a weak US and global recovery with massive deflationary pressures and a severe financial crisis and massive corporate defaults will lead to a robust recovery of earnings and a sharp persistent bull market rally in equities is totally far-fetched.
As I consistently argued before the risk of a L-shaped near-depression will be significantly reduced if aggressive policy actions were to be undertaken. And that risk of near-depression is now lower than 3 months ago – but not gone altogether - as policy makers in the US and globally have now finally gotten religion and taken out the entire range of policy weapons – bazookas, missiles, rockets, artillery – in their armaments and starting to use them more aggressively.
These more aggressive, front-loaded and stronger policies include massive monetary easing and zero policy rates, quantitative easing, unconventional monetary and credit actions to reduce the spread between market rates and government bond yields, significant – if in some cases still insufficient - fiscal policy stimulus, policies to restore credit growth and reduce the credit crunch, policies to clean up toxic assets of banks, policies to recapitalize banks and take over the insolvent ones, policies to reduce the tsunami of foreclosures and reduce the debt servicing and debt burden of distressed households, policies to support emerging market economies under stress, policies of appropriate regulatory forbearance to restore credit and liquidity in financial market (I will discuss these policies in more detail in a forthcoming writing and will assess their tentative advances and improvements and some of their still significant limits).
These policies will not restore positive growth in advanced economies until next year but, as predicted, will reduce the rate of economic contraction to a more moderate pace by the end of 2009. Thus, as we have argued all along the rate of advanced economies economic contraction will slow down from the peak contraction of Q1 (-6%) to a more modest contraction in Q4 (-2%) and a very weak positive growth (0% to 1% in US, Europe and Japan) in 2010 with still sharply rising unemployment rates peaking at 10% in these advanced economies; this will be an improvement compared to the Q4:2008 and Q1:2009 collapse of global economic activity but still a much more bearish scenario than the bullish case of positive and high (2%) growth by Q3-Q4 and return to potential growth by 2010.
So the road ahead is still very very bumpy; the worst for the degree of economic contraction may be by Q2 or Q3 behind us but there will not be any robust and sustained recovery as the damage of the financial and real excesses of the last few years will have lasting effects on actual and potential growth for the US and the global economies; and the burden of trillions of dollars of additional fiscal deficits and debts in advanced and emerging economies will be a drag on actual and potential growth for years to come. But if aggressive policy actions get accelerated after the G20 meeting one can expect a slow and painful process of mending of the US and global economy that will still take a long time – and will be much more slowly than the current bullish consensus – but that will allow us to see the light at the end of the tunnel some time next year, first for the real economies, next for financial markets and finally for the financial system and its wounded institutions.
The light at the end of the tunnel will not be the one of the incoming train wreck if policies become even more robust and aggressive than the current ones; a lot is being done but much more needs to be done. But if the policy actions are stronger and more consistent and better coordinated globally there will be some flickers of light at the end of the tunnel some time in 2010.
There may eventually be light at the end of the tunnel…but not as soon and fast as the bullish consensus makes it: CNBC Squawk Box Interview
Nouriel Roubini | Mar 31, 2009
I was interviewed this morning on CNBC’s Squawk Box on my views on the economy, on the stock market, on the problems with the banks, the Geithner plan and whether there is light at the end of the tunnel.
The full video of this longish interview is available here.
As I pointed out in the interview – consistent with my views for the last several months - the rate of economic contraction will slow from the -6% of Q1 to a figure closer to -2% and next year the economic recovery will be so weak – growth below 1% and unemployment rate peaking at 10% - that it will still feel like a recession even if we may be technically out of it. So, compared to the bullish consensus that sees positive growth at 2% by Q3-Q4 of this year and return to potential growth by 2010 my views are still consistently more bearish than the consensus. Still, compared to the sharp contraction in US and global growth in Q1 of this year (about -6%) the rate of economic contraction will slow down towards -2% for the US and other advanced economies by year end. That is only a mild improvement and still a severe U-shaped recession with a very weak and tentative recovery by 2010.
Let me explain next in more detail my economic outlook and its implications for financial markets:
In the CNBC interview I also pointed out that the stock market has predicted six out of the last zero economic recovery: for the last 18 months we have had six bear market rally and at the beginning of each one of these sucker’s rallies the delusional perma-bulls repeated that this was the beginning of a bull market rally. And for six times these perma-bulls were totally wrong as the bear market rally fizzled and new lows were reached. And for six times I correctly pointed out that these were bear market rallies; but such perma-bulls have no shame in showing up over and over again on CNBC for the last two years and talking their books and being proven wrong over and over again. As I have never been a “perma-bear” in spite of the Dr. Doom nickname I will be the first one to call for the bottom of this severe recession and the bottom of the bear market when I see sustained evidence of robust and consistent economic recovery. I see the latest rally as another bear market rally as over the next few months news will be worse than expected by the consensus: macro news, earnings news, financial news, corporate default news, financial firms insolvency news, etc. Look how wobbly the stock market was yesterday when the expected news that the Big Three are in big trouble led to a 3-4% market fall. Do you listen to Tim Geithner who says that some banks need “large amounts of assistance" and who is now pushing - like Bernanke - for fast track Congressional approval of a law that will allow to takeover systemically important financial institutions and bank holding companies? This market recovery has still very shaky legs and it will until the US and global economic recovery does occur and is more robust and sustained.
The global economic contraction is still very severe: in the Eurozone and Japan there is no evidence of “green shoots” or positive second derivatives; and in the US and China such evidence is still very very weak. So investors and markets are way ahead of actual improvements in economic data. And the idea that stock prices are forward looking and bottom out six to nine months before the end of a recession is incorrect. First, you already had six bear market rallies and stock prices predicted six out of the last zero economic recoveries. Second, in 2001 a short and shallow 8 months recession was over by November but stock prices kept on falling for another 16 months until March of 2003 as the recovery was shallow, as job losses continued until 2003, as deflationary forces controlled pricing power of firms and limited the recovery of earnings, as corporate defaults spiked all the way to 13% of outstanding junk bonds. This time around the recession will be at least 24 months - three times as long and five times deeper in terms of GDP contraction – than the one in 2001. This time the deflationary forces are global, not just in the US and Japan as you got a severe global recession; thus pricing power of the corporate sector and earnings recovery will be weak with such sharp global deflationary pressures. This time you have the worst financial crisis and banking crisis since the Great Depression while in 2001 there was no banking crisis. This time you got the worst housing recession since the Great Depression with home prices still bound to fall another 15-20% for a cumulative fall of 40-45%. This time corporate default rates on junk bonds are predicted by Moody’s to peak at 20%, not the13% of the previous recession. Thus, the idea that a weak US and global recovery with massive deflationary pressures and a severe financial crisis and massive corporate defaults will lead to a robust recovery of earnings and a sharp persistent bull market rally in equities is totally far-fetched.
As I consistently argued before the risk of a L-shaped near-depression will be significantly reduced if aggressive policy actions were to be undertaken. And that risk of near-depression is now lower than 3 months ago – but not gone altogether - as policy makers in the US and globally have now finally gotten religion and taken out the entire range of policy weapons – bazookas, missiles, rockets, artillery – in their armaments and starting to use them more aggressively.
These more aggressive, front-loaded and stronger policies include massive monetary easing and zero policy rates, quantitative easing, unconventional monetary and credit actions to reduce the spread between market rates and government bond yields, significant – if in some cases still insufficient - fiscal policy stimulus, policies to restore credit growth and reduce the credit crunch, policies to clean up toxic assets of banks, policies to recapitalize banks and take over the insolvent ones, policies to reduce the tsunami of foreclosures and reduce the debt servicing and debt burden of distressed households, policies to support emerging market economies under stress, policies of appropriate regulatory forbearance to restore credit and liquidity in financial market (I will discuss these policies in more detail in a forthcoming writing and will assess their tentative advances and improvements and some of their still significant limits).
These policies will not restore positive growth in advanced economies until next year but, as predicted, will reduce the rate of economic contraction to a more moderate pace by the end of 2009. Thus, as we have argued all along the rate of advanced economies economic contraction will slow down from the peak contraction of Q1 (-6%) to a more modest contraction in Q4 (-2%) and a very weak positive growth (0% to 1% in US, Europe and Japan) in 2010 with still sharply rising unemployment rates peaking at 10% in these advanced economies; this will be an improvement compared to the Q4:2008 and Q1:2009 collapse of global economic activity but still a much more bearish scenario than the bullish case of positive and high (2%) growth by Q3-Q4 and return to potential growth by 2010.
So the road ahead is still very very bumpy; the worst for the degree of economic contraction may be by Q2 or Q3 behind us but there will not be any robust and sustained recovery as the damage of the financial and real excesses of the last few years will have lasting effects on actual and potential growth for the US and the global economies; and the burden of trillions of dollars of additional fiscal deficits and debts in advanced and emerging economies will be a drag on actual and potential growth for years to come. But if aggressive policy actions get accelerated after the G20 meeting one can expect a slow and painful process of mending of the US and global economy that will still take a long time – and will be much more slowly than the current bullish consensus – but that will allow us to see the light at the end of the tunnel some time next year, first for the real economies, next for financial markets and finally for the financial system and its wounded institutions.
The light at the end of the tunnel will not be the one of the incoming train wreck if policies become even more robust and aggressive than the current ones; a lot is being done but much more needs to be done. But if the policy actions are stronger and more consistent and better coordinated globally there will be some flickers of light at the end of the tunnel some time in 2010.