"mother of all bailouts"

[camafeu]

http://news.yahoo.com/s/ap/20080921/ap_on_bi_ge/financial_meltdown

"The plan the administration has developed with support from the Fed would have the government buy up to $700 billion of the bad loans, taking them off the books of financial firms with the hope that this will allow those companies to resume normal lending operations. Sen. Richard Shelby of Alabama, the top Republican on the Senate Banking Committee, said the government's efforts would be the "mother of all bailouts" that could well cost $1 trillion when the cost of the government takeovers of Fannie, Freddie and AIG were included."

http://br.youtube.com/watch?v=dv6rQ0U01Yc&eurl=


"The administration's proposal seeks an increase in the limit on the national debt from $10.6 trillion to $11.3 trillion to make room for the massive rescue. But Paulson said that the government would recoup a part of the $700 billion when the housing market recovers and the mortgage assets rebound in value."

http://www.marketwatch.com/news/story/worst-yet-come-investment-strategist/story.aspx?guid={55B21789-3A26-495A-B0D3-5AF3F6ABDA18}


Jeffrey Gundlach, chief investment officer at Los Angeles-based mutual-fund company TCW Group Inc., told clients on a conference call late Wednesday that the crisis in credit and housing may not abate for several years and is actually getting worse.

Gundlach based his assessment on a belief that housing prices still face several more years of decline, a protracted slump, he said, not seen since the Great Depression. Moreover, Gundlach said it's possible that home prices could be sluggish until 2022.
"If it's like the Depression experience -- and it sure is shaping up that way -- it could take several years. Maybe we won't see a bottom in home prices until 2014," he said.

Expect loan default rates to rise, Gundlach said, not just in the subprime market, but among the top-drawer prime borrowers as well. The prime default rate could approach 10% from a current 2% before the carnage is over, he said.
"The current environment is maybe a little worse that what was experienced in the Depression in terms of the housing market," Gundlach said.
More troubles ahead
Accordingly, financial institutions may suffer write-offs that could surpass $1 trillion before conditions improve, he said. As of late August, credit losses and writedowns at the world's 100-largest banks and brokerages topped $506 billion, he noted.
Among the casualties, Gundlach said, could be Citigroup. The company earlier this week made public a memo to employees from CEO Vikram Pandit highlighting Citigroup's balance sheet strength and solid cash position.
Gundlach disagreed with that assessment. He said Citigroup has balance sheet problems that he likened to that of insurer American International Group, which the U.S. bailed out this week.
"I would give a very meaningful probability to the biggest, next AIG-size debacle being Citigroup," the strategist said.
"I would definitely not be a buyer of Citigroup stock," Gundlach said.
"If I were going to buy financial market stocks," he added, "I would be a buyer of Wells Fargo, JP Morgan and Bank of America.

Other financial giants also won't escape the crisis unscathed, Gundlach said. "I don't see how Wachovia can make it as a stand alone," he said. He expressed the same sentiment about Morgan Stanley.
Indeed, late Wednesday the New York Times reported that Morgan Stanley was exploring a merger with Wachovia or another bank. See full story.
Europe's financial giants are in similar or even worse shape than their U.S. counterparts, Gundlach said, with "substantial exposures to assets which U.S. banks are now getting taken to the woodshed over. I would rate all European banks as not a buy."
The breakdown will take a further toll on U.S. stocks, Gundlach added. The S&P 500 will tumble below 800, he said, about 35% below its 1156 close on Wednesday.
Said Gundlach: "None of us have ever seen this, and it's no market for old men, but risk aversion is the order of the day."

[zfranco]

As impressoras do FED devem estar a trabalhar 24 horas por dia a fabricar tanto dolar !!!!

[Broker_Invest]

As impressoras do FED devem estar a trabalhar 24 horas por dia a fabricar tanto dolar !!!!

Não esquecer que eles podem imprimir moeda até ao valor que tem reservas de ouro (salvo erro) olha que eles tem bastate ouro para dar e vender, e este mesmo serve para casos de emergencia.

http://en.wikipedia.org/wiki/Official_gold_reserves


Abraços e bons negocios

[camafeu]

O saxo Bank mandou-me este email:

Published: Sep. 24 2008, 07:48 GMT

It's not over yet for the financials

The introduction of the $700 billion package (the new "bad bank") by U.S. Treasury Secretary Paulsen will not mark the end of the credit crisis for the financials.
Summary

There are more write-downs to come. Balance sheets are weak due to capital not being replaced, while new government requirements for underlying capital limit financials' ability to conduct business as usual. And, is the size of the program sufficient for the amount of toxic assets out there?

Will the bad bank pay enough for the toxic debt?

According to the Paulson plan the new bad bank will not only buy mortgage-related assets, as first expected, but all kinds of "toxic debt" including student loans, consumer credit card debt, car leases and so on. For most of these loans there are no current market prices as trading has dried out and banks are struggling to sell them to shore up their liquidity. At least the new bad bank offers a buyer which will transform illiquid assets into cash – undoubtedly positive for financials. But if the selling price of the debt is below the current book value it could trigger further write-downs.

First indications are the bad bank wants a reverse action where it would only buy the cheapest toxic assets. Any financial carrying a hefty load of toxic assets with liquidity issues will have to offer its debt cheap to be sure the bad bank will buy them. And hence the write-downs...

Beware that the whole Paulson plan is still not approved by the congress.

Weak balance sheets and new capital requirements limit future earnings potential.

According to Bloomberg, financial firms have written down $522 billion and raised new capital of $370 billion since the beginning of the subprime crisis (see the table below). The difference of $152 billion is no longer available as working capital. If we assume a conservative return on capital of 10% to 15%, we are talking about $20 billion of missing company earnings worldwide. Also, increased capital requirements will draw on the financials' working capital, having a negative leverage effect on margins and earnings.

http://mitsweb.iitech.dk/live/dc/analysisimage.aspx?ResUID=6ab69214-a95d-4d6d-b04a-ddd7ead7978c  Source: Bloomberg

Another point about Bloomberg's estimated write-downs is the low figure for Asia relative to the amount of investment assets held there. It would be a surprise if some of the world's biggest investors had not bought any mortgage-related products...

A $700 billion snowball in hell 

The value of toxic debt on bank and insurance company balance sheets exceeds the $700 billion in financial resources the new bad bank will have access to. If toxic debt is defined as level 3 assets (no market price - only internal model valuations), the US financials had $500 billion on their balance sheets at the end of June. Add student loans or consumer credit and the possible total debt exceeds the resource available.

This would be exacerbated if recent announcements hold up and foreign companies are allowed to sell to the bad bank if they have a significant part of their business in the US. And it is still not clear if everybody else can sell their problem credits to the bad bank via a US bank as intermediate. Paulson may have invited other governments and central banks to take part in the exercise, but turnout will be muted.

Expectations for global debt that could possibly be sold to the bad bank fluctuate between $1 and $5 trillion. At Saxo, we believe this amount could be up to $2 trillion - or roughly 3-4% of World GDP, mostly emanating from the US.

The concept of the investment bank has failed.

Pure investment banks are the biggest losers. Lehman Brothers is bankrupt; Bear Stearns and Merrill Lynch were forced into takeovers by JPMorgan and Bank of America respectively. The last "surviving investment banks", Goldman Sachs and Morgan Stanley, have morphed into a normal commercial banks, giving them access to the momentarily all-important cheap liquidity from the Fed. Both banks are likely shore up capital and purchase new assets, with small and medium-sized regional banks being possible targets.

It's ironic that investment banks were brought to their knees by their own "brilliant ideas". The repacking of mortgage loans and the excessive short-selling of stocks was invented largely by investment banks – with each owning at least one hedge fund.

[berrio]

As impressoras do FED devem estar a trabalhar 24 horas por dia a fabricar tanto dolar !!!!

Não esquecer que eles podem imprimir moeda até ao valor que tem reservas de ouro (salvo erro) olha que eles tem bastate ouro para dar e vender, e este mesmo serve para casos de emergencia.

http://en.wikipedia.org/wiki/Official_gold_reserves


Abraços e bons negocios

Não existe limite à expansão de um balanço, por parte de um banco central que tenha uma moeda fiduciaria - ou seja, sem o padrão-ouro.
No limite, a Reserva Federal pode "imprimir" notas ad eternum. Tem no entanto dois problemas:
1. Dólar. Expandir o balanço ad eternum (conhecido como "Quantitative Easing") faz com que a moeda do país em questão cave um buraco até ao outro lado do planeta;
2. Senhoriagem. Ao expandir o balanço o Banco Central cria inflação. Dado que a Reserva Federal recebe juros nas suas holdings de divida pública mas não paga juros na moeda que emite, na expansão a diferença é posítiva e a favor do estado. A isto chama-se senhoriagem, e é por isto que a "inflação" é conhecida também como um "imposto". O problema é que existe um nível limite de senhoriagem. A partir de um momento, na expansão da massa monetária, o "imposto" deixa de compensar a perda de receitas devido à diminuição de poupança. Existe um ponto onde as receitas liquidas do Banco Central se tornam negativas, mas a inflação continua a aumentar. É um dos dois casos onde um Banco Central poderá ir à "falência" (o outro sendo, quando um BC não se financia na sua própria moeda, não tendo controlo. Foi o caso da Islândia, mas não é o caso da Fed, BCE e Banco do Japão).

[fernandex]

http://en.wikipedia.org/wiki/Official_gold_reserves

Vejam só a posição de Portugal no ranking...
13.º, com 382.5 toneladas!! Mais do que, por exemplo, o Reino Unido... Cerca de 2/3 do que tem o BCE...

Ao preço que tem estado o ouro este ano, o Banco de Portugal bem podia ter vendido umas toneladas.

É muita massa em ouro!!! Já para não falar nuns determinados lingotes que por lá andam, que têm um certo e determinado símbolo... esses ainda devem valer mais...

[cyborg]

boas a todos

E á pouco tempo tinhamos quase 600 toneladas mas tivemos que derreter umas barras com umas cruzes esquesitas antes que o reclamassem
mas se fizerem as contas per capita devemos ser dos paises do mundo que mais reservas tem

ps: como diz o meu avô... na 2ª guerra mundial iam comboios carregados de mantimentos onde se lia nos vagons escrito "sobejas de portugal" e para cá não vinham vazios né

[camafeu]

Cheira-me que esta injecção de 700 biliões é uma medida de emergência para comprar tempo e os mercados funcionarem.

Ninguém sabe o valor exacto da dívida tóxica, se for muito grande eles vão ter de continuar a injectar dinheiro.

Em relação ao ouro parece que Portugal acumulou muito ouro no tempo de Salazar.

[camafeu]

Faber prevê a 3ª guerra mundial?

Prestem atenção ao minuto 4.

http://nl.youtube.com/watch?v=3-3PALhsZ3Y

Tem se vindo a notar um acréscimo de tensão ultimamente, não deve vir aí nada de bom.