Merrill, Citi, UBS, Goldman, Bear Stearns & il credit crunch - 4

[negusneg]

Siamo già al IV capitolo...



Proporrei di ripartire da questo studio, per chi vuole approfondire

Questo è il sommario:

Our story is as follows. While the mortgage credit losses still don’t look huge relative to the size of the economy or the financial markets -- the baseline assumption in the paper is $400bn in losses ... they are nevertheless responsible for much of the financial and economic turmoil of the past 6 months. We estimate that roughly half of the total losses are likely to be borne by leveraged US financial institutions ... Assuming that these institutions will aim to lower their leverage by 5%, our baseline estimate is that they will scale back their lending by close to $2 trillion in response to these losses, even if we assume that they manage to “replace” 50% of the lost equity via inflows of unlevered capital, e.g. from sovereign wealth funds. Further, we estimate that just under $1 trn of this credit supply hit is a “ Main Street ” event and will hit unlevered entities such as households and nonfinancial businesses; the remainder is a “Wall Street” event and will hit other leveraged institutions. Finally, we (very tentatively) estimate that the credit supply hit could shave 1-1½ points from real GDP growth over the next year, over and above the “traditional” hit from reduced homebuilding demand, a negative wealth/MEW effect on consumer spending, and the multiplier effects working via the labor market.

[stockuccio]

se mi è permesso ... riporterei l'opinione di chi aveva lucidamente inquadrato la situazione a mio parere ...


Step 9 of the Financial Meltdown: "one or two large and systemically important broker dealers" will "go belly up"
Nouriel Roubini | Mar 14, 2008

In my February 5th piece on 12 Steps to a Financial Disaster I predicted - as Step 9 of the meltdown - that "one or two large and systemically important broker dealers" will "go belly up" and that other members of the "shadow financial system" - i.e. non-bank financial institutions that look like banks in terms of liquidity/rollover risk - will also go bankrupt. As I put it then:

Ninth, the “shadow banking system” (as defined by the PIMCO folks) or more precisely the “shadow financial system” (as it is composed by non-bank financial institutions) will soon get into serious trouble. This shadow financial system is composed of financial institutions that – like banks – borrow short and in liquid forms and lend or invest long in more illiquid assets. This system includes: SIVs, conduits, money market funds, monolines, investment banks, hedge funds and other non-bank financial institutions. All these institutions are subject to market risk, credit risk (given their risky investments) and especially liquidity/rollover risk as their short term liquid liabilities can be rolled off easily while their assets are more long term and illiquid. Unlike banks these non-bank financial institutions don’t have direct or indirect access to the central bank’s lender of last resort support as they are not depository institutions. Thus, in the case of financial distress and/or illiquidity they may go bankrupt because of both insolvency and/or lack of liquidity and inability to roll over or refinance their short term liabilities. Deepening problems in the economy and in the financial markets and poor risk managements will lead some of these institutions to go belly up: a few large hedge funds, a few money market funds, the entire SIV system and, possibly, one or two large and systemically important broker dealers. Dealing with the distress of this shadow financial system will be very problematic as this system – stressed by credit and liquidity problems - cannot be directly rescued by the central banks in the way that banks can. [bold added]

And today the first one of these large broker dealers - Bear Stearns - in on the verge of bankruptcy. Let us be clear: given its massive exposure to toxic MBS and ABS product Bear Stearns is insolvent; the decision by the NY Fed to try to bail out Bear Stearns would make sense if this firm was only illiquid; the trouble that it is insolvent and thus such attempted bailout is altogether inappropriate. It is true that Bear is a large broker dealer; but its systemic importance is much smaller than that of much larger institutions. The world and financial market can survive if Bear disappears.

So the only possible justification for such Fed action is to engineer an orderly rather than a disorderly shutdown of this institution. But unfortunately the Fed is behaving as if Bear Stearns is illiquid but solvent. That is delusional and the official sector support of an otherwise insolvent institution will end up - like many other recent Fed actions - being paid for by the US tax-payer.

As discussed months ago in this column non-banks institutions don't have access - based on the Federal Reserve Act - to the lender of last resort support of the Fed unless a very special and unusual procedure and vote is taken. So for the first time in decades - possibly since the Great Depression - the Fed had to rely on this exceptional rule to bail out a non-bank financial institution. So what is next? Bailing out hedge funds, bailing out money market funds, bailing out SIVs? When is enough enough? This when the Fed has already committed this week to swap 60% ($ 400 bn) of its balance sheet of Treasuries for mortgage backed securities of dubious quality and value.

And Bear is only the first broker dealer to go belly up. Rumors had been circulating in the market for days that the exposure of Lehman to toxic ABS/MBS securities is as bad as that of Bear: according to Fitch at the beginning of the turmoil Bear Stearns had the highest toxic waste ("residual balance") exposure as percent of adjusted equity on balance sheet; the exposure of Bear was 54.5% while that of Lehman was only marginally smaller at 53.3%; that of Goldman Sachs was only 21%. And guess what? Today Lehman received a $2 billion unsecured credit line from 40 lenders. Here is another massively leveraged broker dealer that mismanaged its liquidity risk, had massive amount of toxic waste on its books and is now in trouble. Again here we have not only a situation of illiquidity but serious credit problems and losses given the reckless exposure of this second broker dealer to toxic investments.

We will leave aside for today the fact that a growing number of members of the "shadow financial system" have gone belly up in the last month alone: the entire SIV scheme is being wound down and brought back on balance sheet; a few hedge funds are now closing shops (for details see the web site The Hedge Fund Impode-O-Meter) ); a few money market funds that had exposure to toxic MBS have experienced runs and had to be bailed out; a highly leveraged private equity bond fund has gone belly up; a major near prime mortgage lender is bankrupt. In all these cases a poisonous combination of liquidity risk and credit risk was exacerbated by reckless leverage.

So the question is: if Bear Stearns screwed up big time - as it did - with huge leverage, reckless investments, lousy risk management and massive underestimation of liquidity risk why should the US taxpayer bail out this firm and its shareholders? First fully wipe out those shareholders, then fire all the senior management and have the government take over such a bankrupt institution before a penny of public money is wasted in bailing it out. Instead now the use of public money to bail out financial institutions is spreading from banking ones to non banking ones. The Fed should at least give a clear and public explanation of why such extremely exceptional - and almost never used - intervention was justified.






la domanda per me è chi compra ? http://www.financialnews-us.com/inde...-821504-762140

http://financialpetition.org/petition-new.shtml

[Methos]

La domanda per me è: come se ne esce da stò casino?

[debe2000]

A mio parere solo il tempo metterà fine al tutto, oltre alle varie banche centrali che nazionalizzeranno una decina di banche.

[stockuccio]

a proposito di tempo ... c'è chi li ha definiti http://www.leap2020.eu/GEAB-N-22-is-...omy_a1298.html

[batti38]

Cricket72 wrote

ma allora chi poteva sapere se era tardi o se era presto ?
forse neanche ora si può sapere

In effetti è vero...

[samantaaa]

ciao a tutti
è un po' che leggicchio vari forum e visto che ne sapete a pacchi ho deicso di iscrivermi... in questo momento sto perdendo la mia verginità nel forum! abbiate comprensione per principianti ed ignoranti come me...
non so se sia il 3D giusto, ma ci provo.

in tempi non sospetti comprai un po' di:
XS0184927761 GOLDMAN SACHS GROUP
XS0183944643 LEHMAN BROTHERS
XS0286930952 MERRILL LYNCH
non ci devo fare trading, posso portarle anche a scadenza
secondo voi devo cominciare a preoccuparmi?
grazie

[Methos]

After Bear Stearns, who may be next?
By MADLEN READ



After Bear Stearns Cos. said Friday it will have to borrow money through JPMorgan Chase & Co., backed by the New York Federal Reserve, investors are curious: What does this mean for other banks, and who might be next?

Q: Is this going to happen to other investment banks?

A: Nobody knows for sure, but it could. Until proven otherwise, the market will probably act as if there are more near-collapses to come -- just as it did on Friday, when investors sold off their bank holdings and sent the Dow Jones industrial average down 200 points.

"Even though Bear was probably on the fringe, pushing the envelope anyway, traders are saying that because it happened, it could happen to somebody else," said Brandon Thomas, chief investment officer for Portfolio Management Consultants, the investment arm of Envestnet.

Q: Which other institutions might need funding?

A: Bear Stearns has been the weakling among the five reigning Wall Street investment banks: Bear, Merrill Lynch, Morgan Stanley, Lehman Brothers and Goldman Sachs. Many market watchers will recall that last spring, Bear was the first of these institutions to reveal big problems with mortgage-linked debt when it had to pump cash into two hemorrhaging hedge funds.

Also, Bear is the smallest of the five big investment banks, the least diversified, and the biggest issuer of mortgage-backed securities.

But Lehman Brothers Holdings Inc. appears to be an investment bank that investors are very worried about right now -- mainly because it is the investment bank that is most similar to Bear in structure and exposure. Its stock dropped more than 14 percent on Friday.

Banks gave Lehman a vote of confidence of sorts, however, on Friday -- Lehman Brothers said its new credit facility was "substantially oversubscribed," and that some of world's largest banks participated.

Other banks certainly have their own troubles -- Merrill Lynch, for one, wrote down more than $14 billion in the fourth quarter as the value of bonds and debt backed by souring mortgages fell.

However, "there's not the same questioning of their franchise. It's not anyone saying, what are they going to do for a living next year," said Tanya Azarchs, S&P banking analyst. "At the same time, though ... the markets are very nervous, very skittish. Asset prices are very volatile. The repo markets are very tight, very illiquid. When the repo markets are illiquid, things can get very unpredictable."

The repo, or repurchase, markets are temporary loan markets that are relied upon by banks, hedge funds and other investors to invest their extra money or borrow against collateral.

Q: What will happen to Bear Stearns?

A: Few industry experts believe the 28-day loan will be enough for Bear to become liquid on its own again -- most are viewing it as delaying tactic as Bear and the Fed figure out how to proceed.

It is possible Bear will be bought, perhaps by JPMorgan. If that happens, the buyer would have take over Bear Stearns' $176 billion worth of distressed securities and its $42 billion in loans -- not a rosy prospect for even a healthy bank. Furthermore, there are regulatory issues that may arise if a commercial bank wants to buy Bear's troubled assets.

Another scenario is that the Fed attempts to organize an orderly winding down of Bear Stearns into a much smaller company by selling off its assets.

Q: How is Bear's loan different than other steps troubled financial institutions have taken?

A: Bear Stearns is not the first company to seek out cash -- Citigroup Inc., Merrill Lynch and Morgan Stanley have pulled in several billion dollars by selling stakes to outside investors, including foreign governments, while the bond insurer MBIA Inc. sold a significant stake in itself to JPMorgan, Lehman Brothers and other investors.

But Bear Stearns' agreement with JPMorgan is not a stake sale -- it's financing planned and backed by the U.S. government.

Q: Why can't the Fed just let Bear Stearns collapse?

A: Typically the Federal Reserve bails out struggling commercial banks, but because Bear Stearns is inextricably linked to a huge number of institutions, a failure could cause "a ripple effect," said Ali Samad-Khan, head of operational risk management consulting for the Enterprise Risk Management practice at Towers Perrin.

"They probably fall into the too-big-to-fail category," he said. "The fact is, they recognized that this is an important enough issue for them to get involved in."

Bear Stearns is interconnected with other banks, hedge funds and investors that are its "counterparties." Essentially, if Bear can't meet obligations to these counterparties, those counterparties will lose their money.

Big banks like Citigroup Inc. could see big losses but are probably large and diversified enough to survive them. But smaller players on the edges -- particularly hedge funds -- are at risk of going under if Bear can't repay them. A Carlyle Group fund has already said it is near collapse. Failing hedge funds could be another hit to major banks, who have lent huge amounts of money to the funds.

------

AP Business Writer Leslie Wines contributed to this report.

[cricket72]

Originalmente inviato da samantaaa

ciao a tutti
è un po' che leggicchio vari forum e visto che ne sapete a pacchi ho deicso di iscrivermi... in questo momento sto perdendo la mia verginità nel forum! abbiate comprensione per principianti ed ignoranti come me...
non so se sia il 3D giusto, ma ci provo.

in tempi non sospetti comprai un po' di:
XS0184927761 GOLDMAN SACHS GROUP
XS0183944643 LEHMAN BROTHERS
XS0286930952 MERRILL LYNCH
non ci devo fare trading, posso portarle anche a scadenza
secondo voi devo cominciare a preoccuparmi?
grazie

ciao
ti ringrazio dell'iscrizione al forum e a questa sezione
evidenzio i tuoi titoli

XS0184927761 GOLDMAN SACHS tasso fisso 4,75% 28.01.2014
XS0183944643 LEHMAN BROTHERS tasso fisso 4,75% 16.01.2014
XS0286930952 MERRILL LYNCH tasso fisso 3,50% 30.03.2013

son tutti e tre titoli bancari americani a tasso fisso
come ben sai in questo momento c'è turbolenza sui mercati in particolare
sui titoli finanziari
è stata una tua scelta quella di investire su questi tre titoli?
che percentuale sul tuo portafoglio totale occupano questi titoli?
nei momenti di turbolenza non bisogna farsi prendere dal panico
bisogna avere la freddezza per poter valutare bene l'investimento a suo tempo fatto

[Zhelgadis]

Originalmente inviato da Methos

Q: Why can't the Fed just let Bear Stearns collapse?

A: Typically the Federal Reserve bails out struggling commercial banks, but because Bear Stearns is inextricably linked to a huge number of institutions, a failure could cause "a ripple effect," said Ali Samad-Khan, head of operational risk management consulting for the Enterprise Risk Management practice at Towers Perrin.

"They probably fall into the too-big-to-fail category," he said. "The fact is, they recognized that this is an important enough issue for them to get involved in."

Bear Stearns is interconnected with other banks, hedge funds and investors that are its "counterparties." Essentially, if Bear can't meet obligations to these counterparties, those counterparties will lose their money.

AP Business Writer Leslie Wines contributed to this report.

Insomma, pure loro pensano che se fallisce qualcuno grosso, andiamo tutti a carte quarantotto e salta per aria il castello