troppidebiti
Forumer storico
che vergogna niente isole cayman?
Macroeconomia Crisi finanziaria e sviluppi
- Creatore Discussione METHOS
- Data di Inizio
yellow
Forumer attivo
Ombre e 
luci :Indice noli marittimi continua ad essere depresso e arretra ulteriormente.
http://www.bloomberg.com/apps/quote?ticker=bdiy&exch=IND&x=15&y=11
Il gigante dagli occhi a mandorla inizia a migliorare http://english.people.com.cn/90001/90778/90857/90862/6628821.html,
e anche il settore del lusso nei prossimi 5 anni promette faville
http://www.chinadaily.com.cn/bizchina/2009-04/03/content_7646288.htm
yellow
Forumer attivo
Sante parole per un'evoluzione positiva e più equilibrata
oltre che duratura :
03.04.09 12:40 - AMBROSETTI 09: Roach, occorrono piu' consumi da Cina, India, e Ue
CERNOBBIO (MF-DJ)-"Il mondo ha bisogno di un nuovo consumatore" ed in particolare "di piu' consumo dall'India, dalla Cina e dall'Unione europea".
Lo ha affermato Stephen S.Roach, presidente di Morgan Stanley Asia, a margine del workshop The European House-Ambrosetti a Villa d'Este, sottolineando che l'epoca del "consumo statunitense e' giunta al termine"
e che se non verranno trovati nuovi consumatori
"il mondo entrera' in una recessione prolungata".
oltre che duratura :
03.04.09 12:40 - AMBROSETTI 09: Roach, occorrono piu' consumi da Cina, India, e Ue
CERNOBBIO (MF-DJ)-"Il mondo ha bisogno di un nuovo consumatore" ed in particolare "di piu' consumo dall'India, dalla Cina e dall'Unione europea".
Lo ha affermato Stephen S.Roach, presidente di Morgan Stanley Asia, a margine del workshop The European House-Ambrosetti a Villa d'Este, sottolineando che l'epoca del "consumo statunitense e' giunta al termine"
e che se non verranno trovati nuovi consumatori
"il mondo entrera' in una recessione prolungata".
TheLondoner
Forumer storico
in effetti basterebbe che un altro 10% della popolazione di queste nazioni migliorasse nettamente il proprio tenore di vita per rimpiazzare o affiancare parte dei consumi Usa.
Il problema comunque è anche che in occidente si produce sempre meno a causa della delocalizzazione produttiva... quindi solo una parte della nuova domanda si abbatte su di noi...
yellow
Forumer attivo
Concordo, e auspico innalzamento consumi dell'Europa in primisRagionevole e condivisibile e confortante ( deflazione pare scongiurata ) il parere di :
03.04.09 14:54 - AMBROSETTI 09: Economia: Savona, rischio deflazione ormai superato
MILANO (MF-DJ)--"Il rischio della deflazione e' ormai superato" al punto che "oggi
(durante un panel del workshop Ambrosetti, ndr)
abbiamo parlato di exit strategy per superare il surplus monetario" creatosi negli ultimi tempi.
Lo ha affermato ad MF-Dow Jones l'economista Paolo Savona in merito ai timori per un'esplosione di un fenomeno deflazionistico,
aggiungendo che
"la preoccupazione oggi e' addirittura di una ripresa troppo rapida dell'inflazione".
Per quanto riguarda l'esito del G20, Savona ha sottolineato che la riunione dei grandi della terra
"certamente ha aperto molte speranze, c'e' stata una risposta molto forte" e le risorse messe in campo
"ci consentono di dare un giudizio altamente positivo".
Dunque "se i comportamenti corrisponderanno alle affermazioni, la ripresa avverra' prima del previsto.
Se si ristabilisce
la fiducia avverra' per la fine del 2009".Savona ha spiegato tra l'altro che la sua opinione su una ripresa per la fine dell'anno in corso dipende anche da un doppio effetto,
l'effetto scorte,
basse in particolare in Italia,
e l'effetto annuncio causato dagli incentivi governativi.
L'economista ha espresso un giudizio positivo sulla trasformazione del Financial stability forum in organismo permanente e,
in seguito ad alcune critiche di economisti tedeschi sull'indebitamento dell'Italia,
si e' espresso negativamente sulla Germania,
in particolare per l'utilizzo del surplus commerciale degli anni passati.
Infine Savona ha argomentato che nel panel a porte chiuse svoltosi nell'ambito del workshop Ambrosetti di Cernobbio, il 10% degli economisti presenti ha votato per una ripresa per la fine dell'anno in corso,
un'altro 10% non ha voluto esprimere opinioni,
ed il restante 80% si e' diviso equamente per una ripresa o nel 2010 o nel 2011.
yellow
Forumer attivo
03.04.09
03.04.09
03.04.09
03.04.09
Sintesi centrata :yellow
Forumer attivo
Un plauso a 
messier Fitoussi :
03.04.09 15:17 - Crisi: Fitoussi, causa profonda e' crescita disuguaglianze
ROMA (MF-DJ)--
"La crisi del sistema finanziario e' stata solo la causa sintomatica,
mentre la causa profonda e' che per 30 anni abbiamo lasciato crescerele disuguaglianze,
attuando una distribuzione alla rovescia con i poveri che danno ai ricchi".
Lo ha detto, nel suo intervento alla scuola politica del Pd dedicata all'ambiente, l'economista Jean Paul Fitoussi.
"Siamo di fronte a problemi estremamente gravi causati da una crisi della democrazia -ha detto Fitoussi-
la tolleranza per le disuguaglianze spiega i due grandi problemi di fronte ai quali si trova oggi l'umanita',
e cioe' quello economico e quello ecologico".
Tra le proposte lanciate dall'economista,
quella di "mettere da subito a norma ecologica le nostre abitazioni, affinche' consumino meno energia.
Una proposta facile da realizzare e chedarebbe lavoro a milioni di persone".
Inoltre "e' necessario investire in una produzione che non costa quasi nulla e che al contrario puo' aumentare le risorse naturali, ossiail capitale umano, l'educazione e la ricerca". com/rov
messier Fitoussi :03.04.09 15:17 - Crisi: Fitoussi, causa profonda e' crescita disuguaglianze
ROMA (MF-DJ)--
"La crisi del sistema finanziario e' stata solo la causa sintomatica,
mentre la causa profonda e' che per 30 anni abbiamo lasciato crescere
le disuguaglianze, attuando una distribuzione alla rovescia con i poveri che danno ai ricchi".
Lo ha detto, nel suo intervento alla scuola politica del Pd dedicata all'ambiente, l'economista Jean Paul Fitoussi.
"Siamo di fronte a problemi estremamente gravi causati da una crisi della democrazia -ha detto Fitoussi-
la tolleranza per le disuguaglianze spiega i due grandi problemi di fronte ai quali si trova oggi l'umanita',
e cioe' quello economico e quello ecologico".
Tra le proposte lanciate dall'economista,
quella di "mettere da subito a norma ecologica le nostre abitazioni, affinche' consumino meno energia.
Una proposta facile da realizzare e che
darebbe lavoro a milioni di persone". Inoltre "e' necessario investire in una produzione che non costa quasi nulla e che al contrario puo' aumentare le risorse naturali, ossia
il capitale umano, l'educazione e la ricerca". com/rovyellow
Forumer attivo
Un Roubini pacato :
CERNOBBIO (MF-DJ)--
"Nel 2009 la recessione nell'Eurozona sara' anche peggiore che negli Usa".
Lo ha affermato Nouriel Roubini, professore della Stern School of Business di New York, in occasione del workshop Ambrosetti in corso a Villa d'Este, sottolineando che
"questo e' un po' il paradosso di questa crisi.
A mio avviso la contrazione nell'Eurozona e' dovuta al fatto che la reazione degli Stati Uniti" agli squilibri esistenti nel sistema "e' stata piu' aggressiva e questo fa la differenza".
Roubini ha aggiunto che se il tasso di disoccupazione dovesse salire oltre il 10% in Europa,
ci sarebbero forti perdite di capitale umano e cio' avrebbe un impatto negativo sulla crescita nel lungo termine.
"Il tasso di crescita potenziale delle economie sviluppate -ha detto- sara' minore in futuro, anche se non so in che misura".
Riguardo al G20 di Londra, Roubini ha commentato che"e' stato positivo l'impegno sull'aumento dei finanziamenti all'Fmi",
il sostegno al commercio internazionale e la regolamentazione del sistema finanziario.
Sul trattamento degli asset tossici, invece, l'economista ha precisato che "i problemi di ogni Paese verranno risolti dalle singole Autorita' nazionali.
Non credo sia possibile avere un piano globale al riguardo".
Commentando poi i piani di stimolo fiscale elaborati dai vari Paesi per contrastare la crisi, Roubini ha riferito che essi "sono misure di breve termine",
mentre nel medio termine si dovra' fare affidamento sulla domanda interna da parte del settore privato.
In particolare, sull'Italia,
"la recessione non sara' ne' peggiore ne' migliore rispetto agli altri Paesi dell'Eurozona.
L'Italia ha un sistema finanziariosano ed e' stato sorvegliato in modo adeguato dalla Banca d'Italia.
I problemi in Italia sono piu' che altro strutturali".
Infine, in merito al taglio di 25 punti base dei tassi di interesse disposto ieri dalla Bce, Roubini ha dichiarato che "avrebbero potuto tagliare anche di 50 punti base",
ma "penso che la Banca prendera'misure non convenzionali,
tra cui politiche di quantitative leasing".
:CERNOBBIO (MF-DJ)--
"Nel 2009 la recessione nell'Eurozona sara' anche peggiore che negli Usa".
Lo ha affermato Nouriel Roubini, professore della Stern School of Business di New York, in occasione del workshop Ambrosetti in corso a Villa d'Este, sottolineando che
"questo e' un po' il paradosso di questa crisi.
A mio avviso la contrazione nell'Eurozona e' dovuta al fatto che la reazione degli Stati Uniti" agli squilibri esistenti nel sistema "e' stata piu' aggressiva e questo fa la differenza".
Roubini ha aggiunto che se il tasso di disoccupazione dovesse salire oltre il 10% in Europa,
ci sarebbero forti perdite di capitale umano e cio' avrebbe un impatto negativo sulla crescita nel lungo termine.
"Il tasso di crescita potenziale delle economie sviluppate -ha detto- sara' minore in futuro, anche se non so in che misura".
Riguardo al G20 di Londra, Roubini ha commentato che
"e' stato positivo l'impegno sull'aumento dei finanziamenti all'Fmi", il sostegno al commercio internazionale e la regolamentazione del sistema finanziario. Sul trattamento degli asset tossici, invece, l'economista ha precisato che "i problemi di ogni Paese verranno risolti dalle singole Autorita' nazionali.
Non credo sia possibile avere un piano globale al riguardo".
Commentando poi i piani di stimolo fiscale elaborati dai vari Paesi per contrastare la crisi, Roubini ha riferito che essi "sono misure di breve termine",
mentre nel medio termine si dovra' fare affidamento sulla domanda interna da parte del settore privato.
In particolare, sull'Italia,
"la recessione non sara' ne' peggiore ne' migliore rispetto agli altri Paesi dell'Eurozona. L'Italia ha un sistema finanziario
sano ed e' stato sorvegliato in modo adeguato dalla Banca d'Italia. I problemi in Italia sono piu' che altro strutturali".
Infine, in merito al taglio di 25 punti base dei tassi di interesse disposto ieri dalla Bce, Roubini ha dichiarato che "avrebbero potuto tagliare anche di 50 punti base",
ma "penso che la Banca prendera'
misure non convenzionali, tra cui politiche di quantitative leasing".
stockuccio
Guest
disoccupazione a 8,5 ... pardon 15.6 ... più o meno come da noi http://econompicdata.blogspot.com/2009/04/unemployment-to-85-broader-measure.html
altri mille ... dico mille .... non so se rendo mille .... miliardi di svalutazioni ? sono impazziti tutti nel mondo
http://www.bloomberg.com/apps/news?pid=20601087&sid=aylbeokVZaWo&refer=home
April 3 (Bloomberg) -- U.S. regulators may force Bank of America Corp., Citigroup Inc. and at least a dozen of the nation’s biggest financial institutions to write down as much as $1 trillion in loans, twice what they’ve already recorded, based on Federal Deposit Insurance Corp. auction data compiled by Bloomberg.
Banks failing Federal Reserve evaluations of loans this month may be ordered to make sales worth as little as 32 cents on the dollar, according to FDIC data. That would be less than half of the 84 cents on the dollar the Treasury Department suggested was a possible purchase price. Some of the bank- insurance agency’s auctions brought 0.02 cent on the dollar.
Lower valuations would lead to new writedowns and capital injections from the $134.5 billion remaining in the Troubled Asset Relief Program, Nobel Prize-winning economist Joseph Stiglitz said.
“The only way banks will sell is under duress,” the 66- year-old professor at Columbia University in New York said in a phone interview.
Asset sales are the latest step in President Barack Obama’s effort to restart the U.S. economy through the most costly rescue of the financial system in history. Treasury Secretary Timothy Geithner’s Legacy Loan Program and Legacy Securities Program together are targeted to start at $500 billion and may expand to $1 trillion.
Auctioning Assets
Geithner’s plan will purchase loans and be overseen by the FDIC, which will offer debt guarantees while the Treasury invests capital alongside investors.
The FDIC would auction assets after the Office of the Comptroller of the Currency, Office of Thrift Supervision or the Fed signals that a bank is in danger of failing.
“If we thought that was the right decision to address their situation, we would certainly tell an institution to move in that direction,” said William Ruberry, an OTS spokesman in Washington.
Geithner’s plan to buy loans and securities “can be very useful,” Comptroller of the Currency John Dugan said in a Bloomberg Television interview today. “It’s one more arrow in the quiver to address problems with assets on banks’ balance sheets.”
Treasury spokesman Isaac Baker said in an e-mail that the program is voluntary and the government expects banks will want to sell assets to clean their balance sheets and make it easier to raise capital from investors, he said.
Financing Help
“Past auctions cannot reliably predict asset prices in the Public Private Investment Program, as we are creating a new market that has not previously existed to help value these assets, and offering financing to help investors purchase them,” Baker said.
Setting up a facility to purchase distressed loans will allow the FDIC to put a bank into “a silent resolution,” said Joshua Rosner, a managing director at investment-research firm Graham Fisher & Co. in New York.
“This is a way to functionally wind down a bank as big as Citi without the world realizing that they’re essentially in resolution,” he said. “The real value of this is a tool to resolve a too-big-to-fail institution.”
The FDIC is considering allowing banks to share in future profits on loans sold to public-private partnerships to encourage healthier lenders to participate, according to Jim Wigand, the agency’s deputy director for resolutions and receiverships. The regulator is seeking comments through April 10 on the program, said spokesman David Barr.
Assets sold under the Legacy Loans Program may be worth an average of 56.3 cents on the dollar, based on the results of FDIC auctions at failed banks over the past 15 months.
‘Large Amounts’
Writedowns would total $1 trillion if the program buys $500 billion in loans at 32 cents on the dollar, the average for non- performing commercial loans in the FDIC sales.
Geithner said March 29 that some financial institutions will need “large amounts of assistance.” He’s trying to avoid bank nationalizations by wooing investors to purchase loans with taxpayer-guaranteed financing to protect them against loss. The U.S. move to clear away distressed assets contrasts with Japanese financial authorities’ reluctance to do so in a 1990s financial crisis, which led to a decade of economic stagnation.
“This is going to be our Yucca Mountain right here,” said Joseph Mason, an associate professor at Louisiana State University in Baton Rouge and former FDIC visiting scholar, referring to the proposed radioactive-waste storage site in Nevada.
Half-Life
“You can put it in a train car and ship it across the country. The half-life of this stuff is real long, but it has to burn off,” he said.
The FDIC’s average auction value of 56.3 cents on the dollar for residential and commercial loans is based on 312 sales worth $1.1 billion since Jan. 1, 2008, according to the FDIC. The average for 348 commercial loans for which borrowers stopped paying was 32 cents on the dollar. Auction prices ranged from 0.02 cent to 101.2 cents on the dollar, according to the FDIC.
In announcing its loan-sale program last week, the Treasury provided an example of a purchase price of 84 cents on the dollar, with taxpayers putting up 6 cents, investors 6 cents and the FDIC guaranteeing 72 cents in financing.
“Eighty-four cents is just laughable” because the market value for loans is much lower, said Barry Ritholtz, chief executive officer of New York-based FusionIQ, an independent research firm.
The U.S. is structuring the loan purchases to leave the government with most of the risk, while investors stand to gain most of any profit, economist Stiglitz said.
‘Almost No Upside’
“There’s almost no upside for the taxpayer,” he said. “The government is giving a 110 percent bailout.”
How much investors offer for assets is “going to be the key” determinant of Bank of America’s participation in the government’s two asset-purchase programs, CEO Kenneth Lewis said in a Bloomberg Television interview March 27.
“If there’s an issue with the program, it’s going to be trying to get banks to sell assets,” FDIC Chairman Sheila Bair said in a speech the same day at the Isenberg School of Management of the University of Massachusetts in Amherst.
“If I have concern, it’s the pricing may not be where seller and buyer are willing to meet,” she said.
Any standoff between investors and banks over loan prices may scuttle Geithner’s plan to segregate non-performing assets and restart lending, said Bob Eisenbeis, chief monetary economist with Vineland, New Jersey-based Cumberland Advisors and a former Atlanta Federal Reserve Bank research director.
‘Really Bad Stuff’
“It’s hard to believe that the really bad stuff that’s causing all the problems are going to be offered for sale,” Eisenbeis said. “The institutions won’t want to sell them if they get a true price, because their capital would take too much of a hit.”
With preparations for auctions under way, U.S. banks are being put through so-called stress tests, which Geithner said last month are a comprehensive set of standards for the financial system’s most important lenders. The examinations of loans and their collateral and payment histories are scheduled to be completed by April 30.
Banks have almost $4.7 trillion of mortgages and $3 trillion of other loans that aren’t packaged into bonds, according to the Fed. The vast majority are carried at full value because they don’t need to be written down until they default, according to Daniel Alpert, managing director of New York-based investment bank Westwood Capital LLC.
“Just because it’s being held at full value doesn’t mean it’s not bad,” Alpert said.
Obama Effort
While regulators don’t intend to publish the details of their stress tests, the results will effectively become known once banks announce how much capital they need to raise. Regulators will then give lenders six months to obtain funds from investors or taxpayers as a last resort.
The tests are designed to mesh with Obama’s effort to remove banks’ distressed mortgage assets that have hampered lending to consumers and businesses. Officials aim to have the first loan purchases by private investors financed by the government within weeks of the conclusion of the stress tests, according to the Treasury.
Including TARP, the U.S. government and the Fed have spent, lent or guaranteed $12.8 trillion to combat the financial collapse and a recession that began in December 2007. The amount approaches the $14.2 trillion U.S. gross domestic product last year.
‘Constructive Plan’
Obama met with the CEOs of the nation’s 12 biggest banks on March 27 at the White House to enlist their support to thaw a 20-month freeze in bank lending.
Lenders undergoing stress tests include New York-based Citigroup, which has received three rounds of capital infusions valued at $60 billion, including $45 billion from TARP, according to Bloomberg data.
“The administration has put forth a constructive plan to address the critical issues facing the financial services industry, and we are committed to working together with the industry to help achieve the goals of the plan,” CEO Vikram Pandit said in a statement before meeting with Obama.
Citigroup spokesman Stephen Cohen declined to comment.
The U.S. tests also involve Charlotte, North Carolina-based Bank of America, which also received $45 billion from TARP. It bought Merrill Lynch & Co. -- the largest underwriter of failed collateralized debt obligations, according to Standard & Poor’s -- and home-lender Countrywide Financial Corp.
Bank of America spokesman Scott Silvestri declined to comment.
Option ARMs
San Francisco-based Wells Fargo purchased Wachovia Corp., the nation’s biggest provider of option adjustable-rate mortgages, for $15 billion. In doing so, it took responsibility for about $122 billion of option ARMs sold by the Charlotte bank.
Option ARM loans allow borrowers to defer part of their interest payments and add it to their principal. When housing collapsed, many holders of the mortgages were left owing more than the value of their homes.
Wachovia issued more than half its option ARMs in California, according to bank filings. Wells Fargo was already the biggest lender in the state.
“Wells Fargo supports any plan by the Treasury that helps financial institutions efficiently sell troubled assets while still providing an investment return to the U.S. taxpayer,” spokeswoman Janis Smith said in an e-mail.
Web Distribution
The ability to distribute loan information over the Internet will also support prices by expanding the number of buyers and allowing for sales as small as $100,000, said Stephen Emery, a managing director at New York-based Mission Capital Advisors, which brokered $3 billion of real-estate loan sales last year.
Terms offered under the Legacy Loans Program, including government-backed financing, will also help boost demand and selling prices by as much as 20 percent, he said.
“The leverage will allow buyers to bump their price a little bit,” Emery said. “But that still doesn’t mean that something that was worth 30 is now worth 60. What’s going to happen is now it’s worth 35 or 36 cents.”
altri mille ... dico mille .... non so se rendo mille .... miliardi di svalutazioni ? sono impazziti tutti nel mondo
http://www.bloomberg.com/apps/news?pid=20601087&sid=aylbeokVZaWo&refer=home
April 3 (Bloomberg) -- U.S. regulators may force Bank of America Corp., Citigroup Inc. and at least a dozen of the nation’s biggest financial institutions to write down as much as $1 trillion in loans, twice what they’ve already recorded, based on Federal Deposit Insurance Corp. auction data compiled by Bloomberg.
Banks failing Federal Reserve evaluations of loans this month may be ordered to make sales worth as little as 32 cents on the dollar, according to FDIC data. That would be less than half of the 84 cents on the dollar the Treasury Department suggested was a possible purchase price. Some of the bank- insurance agency’s auctions brought 0.02 cent on the dollar.
Lower valuations would lead to new writedowns and capital injections from the $134.5 billion remaining in the Troubled Asset Relief Program, Nobel Prize-winning economist Joseph Stiglitz said.
“The only way banks will sell is under duress,” the 66- year-old professor at Columbia University in New York said in a phone interview.
Asset sales are the latest step in President Barack Obama’s effort to restart the U.S. economy through the most costly rescue of the financial system in history. Treasury Secretary Timothy Geithner’s Legacy Loan Program and Legacy Securities Program together are targeted to start at $500 billion and may expand to $1 trillion.
Auctioning Assets
Geithner’s plan will purchase loans and be overseen by the FDIC, which will offer debt guarantees while the Treasury invests capital alongside investors.
The FDIC would auction assets after the Office of the Comptroller of the Currency, Office of Thrift Supervision or the Fed signals that a bank is in danger of failing.
“If we thought that was the right decision to address their situation, we would certainly tell an institution to move in that direction,” said William Ruberry, an OTS spokesman in Washington.
Geithner’s plan to buy loans and securities “can be very useful,” Comptroller of the Currency John Dugan said in a Bloomberg Television interview today. “It’s one more arrow in the quiver to address problems with assets on banks’ balance sheets.”
Treasury spokesman Isaac Baker said in an e-mail that the program is voluntary and the government expects banks will want to sell assets to clean their balance sheets and make it easier to raise capital from investors, he said.
Financing Help
“Past auctions cannot reliably predict asset prices in the Public Private Investment Program, as we are creating a new market that has not previously existed to help value these assets, and offering financing to help investors purchase them,” Baker said.
Setting up a facility to purchase distressed loans will allow the FDIC to put a bank into “a silent resolution,” said Joshua Rosner, a managing director at investment-research firm Graham Fisher & Co. in New York.
“This is a way to functionally wind down a bank as big as Citi without the world realizing that they’re essentially in resolution,” he said. “The real value of this is a tool to resolve a too-big-to-fail institution.”
The FDIC is considering allowing banks to share in future profits on loans sold to public-private partnerships to encourage healthier lenders to participate, according to Jim Wigand, the agency’s deputy director for resolutions and receiverships. The regulator is seeking comments through April 10 on the program, said spokesman David Barr.
Assets sold under the Legacy Loans Program may be worth an average of 56.3 cents on the dollar, based on the results of FDIC auctions at failed banks over the past 15 months.
‘Large Amounts’
Writedowns would total $1 trillion if the program buys $500 billion in loans at 32 cents on the dollar, the average for non- performing commercial loans in the FDIC sales.
Geithner said March 29 that some financial institutions will need “large amounts of assistance.” He’s trying to avoid bank nationalizations by wooing investors to purchase loans with taxpayer-guaranteed financing to protect them against loss. The U.S. move to clear away distressed assets contrasts with Japanese financial authorities’ reluctance to do so in a 1990s financial crisis, which led to a decade of economic stagnation.
“This is going to be our Yucca Mountain right here,” said Joseph Mason, an associate professor at Louisiana State University in Baton Rouge and former FDIC visiting scholar, referring to the proposed radioactive-waste storage site in Nevada.
Half-Life
“You can put it in a train car and ship it across the country. The half-life of this stuff is real long, but it has to burn off,” he said.
The FDIC’s average auction value of 56.3 cents on the dollar for residential and commercial loans is based on 312 sales worth $1.1 billion since Jan. 1, 2008, according to the FDIC. The average for 348 commercial loans for which borrowers stopped paying was 32 cents on the dollar. Auction prices ranged from 0.02 cent to 101.2 cents on the dollar, according to the FDIC.
In announcing its loan-sale program last week, the Treasury provided an example of a purchase price of 84 cents on the dollar, with taxpayers putting up 6 cents, investors 6 cents and the FDIC guaranteeing 72 cents in financing.
“Eighty-four cents is just laughable” because the market value for loans is much lower, said Barry Ritholtz, chief executive officer of New York-based FusionIQ, an independent research firm.
The U.S. is structuring the loan purchases to leave the government with most of the risk, while investors stand to gain most of any profit, economist Stiglitz said.
‘Almost No Upside’
“There’s almost no upside for the taxpayer,” he said. “The government is giving a 110 percent bailout.”
How much investors offer for assets is “going to be the key” determinant of Bank of America’s participation in the government’s two asset-purchase programs, CEO Kenneth Lewis said in a Bloomberg Television interview March 27.
“If there’s an issue with the program, it’s going to be trying to get banks to sell assets,” FDIC Chairman Sheila Bair said in a speech the same day at the Isenberg School of Management of the University of Massachusetts in Amherst.
“If I have concern, it’s the pricing may not be where seller and buyer are willing to meet,” she said.
Any standoff between investors and banks over loan prices may scuttle Geithner’s plan to segregate non-performing assets and restart lending, said Bob Eisenbeis, chief monetary economist with Vineland, New Jersey-based Cumberland Advisors and a former Atlanta Federal Reserve Bank research director.
‘Really Bad Stuff’
“It’s hard to believe that the really bad stuff that’s causing all the problems are going to be offered for sale,” Eisenbeis said. “The institutions won’t want to sell them if they get a true price, because their capital would take too much of a hit.”
With preparations for auctions under way, U.S. banks are being put through so-called stress tests, which Geithner said last month are a comprehensive set of standards for the financial system’s most important lenders. The examinations of loans and their collateral and payment histories are scheduled to be completed by April 30.
Banks have almost $4.7 trillion of mortgages and $3 trillion of other loans that aren’t packaged into bonds, according to the Fed. The vast majority are carried at full value because they don’t need to be written down until they default, according to Daniel Alpert, managing director of New York-based investment bank Westwood Capital LLC.
“Just because it’s being held at full value doesn’t mean it’s not bad,” Alpert said.
Obama Effort
While regulators don’t intend to publish the details of their stress tests, the results will effectively become known once banks announce how much capital they need to raise. Regulators will then give lenders six months to obtain funds from investors or taxpayers as a last resort.
The tests are designed to mesh with Obama’s effort to remove banks’ distressed mortgage assets that have hampered lending to consumers and businesses. Officials aim to have the first loan purchases by private investors financed by the government within weeks of the conclusion of the stress tests, according to the Treasury.
Including TARP, the U.S. government and the Fed have spent, lent or guaranteed $12.8 trillion to combat the financial collapse and a recession that began in December 2007. The amount approaches the $14.2 trillion U.S. gross domestic product last year.
‘Constructive Plan’
Obama met with the CEOs of the nation’s 12 biggest banks on March 27 at the White House to enlist their support to thaw a 20-month freeze in bank lending.
Lenders undergoing stress tests include New York-based Citigroup, which has received three rounds of capital infusions valued at $60 billion, including $45 billion from TARP, according to Bloomberg data.
“The administration has put forth a constructive plan to address the critical issues facing the financial services industry, and we are committed to working together with the industry to help achieve the goals of the plan,” CEO Vikram Pandit said in a statement before meeting with Obama.
Citigroup spokesman Stephen Cohen declined to comment.
The U.S. tests also involve Charlotte, North Carolina-based Bank of America, which also received $45 billion from TARP. It bought Merrill Lynch & Co. -- the largest underwriter of failed collateralized debt obligations, according to Standard & Poor’s -- and home-lender Countrywide Financial Corp.
Bank of America spokesman Scott Silvestri declined to comment.
Option ARMs
San Francisco-based Wells Fargo purchased Wachovia Corp., the nation’s biggest provider of option adjustable-rate mortgages, for $15 billion. In doing so, it took responsibility for about $122 billion of option ARMs sold by the Charlotte bank.
Option ARM loans allow borrowers to defer part of their interest payments and add it to their principal. When housing collapsed, many holders of the mortgages were left owing more than the value of their homes.
Wachovia issued more than half its option ARMs in California, according to bank filings. Wells Fargo was already the biggest lender in the state.
“Wells Fargo supports any plan by the Treasury that helps financial institutions efficiently sell troubled assets while still providing an investment return to the U.S. taxpayer,” spokeswoman Janis Smith said in an e-mail.
Web Distribution
The ability to distribute loan information over the Internet will also support prices by expanding the number of buyers and allowing for sales as small as $100,000, said Stephen Emery, a managing director at New York-based Mission Capital Advisors, which brokered $3 billion of real-estate loan sales last year.
Terms offered under the Legacy Loans Program, including government-backed financing, will also help boost demand and selling prices by as much as 20 percent, he said.
“The leverage will allow buyers to bump their price a little bit,” Emery said. “But that still doesn’t mean that something that was worth 30 is now worth 60. What’s going to happen is now it’s worth 35 or 36 cents.”
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