Þúsund punkta dándagur á Dow Jones í vikunni?

Mér finnst það fremur líklegt. Tiltrúin á fjármálakerfinu er greinilega að hruni komin og þar að auki eru greinileg samdráttarmerki í efnahagskerfi BNA. Dollarinn er síðan í frjálsu falli og hrun gjaldmiðilsins er áreiðanlega fyrirboði um hrun á hlutabréfa- og skuldabréfamörkuðum vestra.

Athugasemdir

[Baldur Fjölnisson, 26.11.2007 kl. 14:00]

November 26 2007: 3:54 AM EST

  The next credit scandalThe real outrage of the credit crunch has been in the way major banks disclosed potential losses. Now, there are billions more in undisclosed risk.By Peter Eavis, senior writerhttp://cnnmoney.printthis.clickability.com/pt/cpt?action=cpt&title=Banks+have+billions+more+in+undisclosed+risk+-+Nov.+25%2C+2007&expire=-1&urlID=25098123&fb=Y&url=http%3A%2F%2Fmoney.cnn.com%2F2007%2F11%2F24%2Fmagazines%2Ffortune%2Feavis_conduits.fortune%2Findex.htm%3Fpostversion%3D2007112603&partnerID=2200

NEW YORK (Fortune) -- The major banks have already reported billions in unexpected losses from complex investment vehicles known as CDOs. Now they face big risks from other corners of the debt markets -- but don't expect them to warn investors anytime soon.

The failure by banks to properly inform shareholders of their potential losses is perhaps the biggest scandal so far of the credit crunch that began this summer.

Earlier this year, for example, Merrill Lynch, Citigroup and Bank of America gave almost no indication that one particularly toxic debt product -- CDOs, or collateralized debt obligations -- could be the source of billions of dollars in losses.

Those losses came to light this fall, blindsiding shareholders and pummeling banks' stock prices.

The lack of disclosure not only has unsettled investors, but also has raised the prospect that large losses are lurking in other parts of the banks' businesses.

One likely new trouble spot: Conduits, the opaque structures banks set up to provide debt funding to borrowers. Often, the debt issued by the conduits is collateralized with assets, like mortgages.

Conduits typically aren't consolidated on a bank's balance sheet. But banks are often on the hook to fund them if investors stop buying the debt they've issued. When that happens, a lot of risk can get moved onto the balance sheet.

In a similar way, a good chunk of Citigroup's CDO losses occurred because it had to honor prior commitments to fund a large amount of debt previously issued by CDO structures. The financial services giant was ultimately forced to bring onto its balance sheet $25 billion of short-term CDO-debt backed with risky mortgages. (CDOs explained)

Now, conduits could trigger a similar process at many big banks. Since demand for certain types of conduit debt has shrunk dramatically and bad loan numbers on subprime debt are soaring, banks could well end up absorbing large amounts of conduit debt.

Citigroup (Charts, Fortune 500) had off-balance sheet conduits with assets totaling $73 billion as of Sept. 30. And Merrill bought $5 billion of assets from its conduits in the third quarter, a move that led to pre-tax losses of over $500 million in the same quarter.

Almost every major banks has significant conduit exposure. But if conduits are becoming a problem, banks are not saying much about it in their financial statements.

A close look at what happened with CDOs at Citigroup and Merrill shows just how little investors are told -- and should make investors wary about how little they know about banks' exposure to conduits.

So why was CDO exposure so secret?

Banks typically arranged and sold CDOs to investors, so the sold ones would not appear on their balance sheets.

In fact, there was one place in financial statements where numbers were given on CDOs. The disclosure was inadequate, but still worth looking at now.

In quarterly financial statements, companies disclose their "variable interest entities," or VIEs. These are entities to which a company has actual or potential economic exposure.

When it comes to inadequate CDO disclosures, the VIEs that matter are those that are not consolidated on a company's balance sheet.

A word search for CDO in a public financial statement may have taken an investor to the VIE tables. But once there, there would be no way of gauging just what the true exposure was to CDO losses.

This is partly the fault of the accounting rule -- something called FIN 46-R -- that governs off-balance sheet VIEs. The big problem is that it doesn't force companies to disclose realistic estimates for losses.

Under FIN46-R, companies must disclose their maximum loss exposure. That sounds like a conservative approach, but in practice it isn't. That's because banks often add comments in financial statements that effectively tell investors not to take these maximum loss numbers seriously.

Take a look at Citigroup's second quarter filing, posted Aug. 3, which was well into the summer credit meltdown. In it, the bank said actual losses from its unconsolidated VIEs, which included $75 billion of CDOs, were "not expected to be material." It has since estimated losses could be between $8 billion and $11 billion (which is most definitely material).

So the question becomes: Did banks have a good idea of what off-balance-sheet CDO losses would be before they were disclosed? The answer to that is: Almost certainly.

Even if FIN 46-R doesn't demand that banks disclose their estimates for actual losses, if such losses are material, other accounting guidelines demand they be made public.

And recent financial statements clearly indicate that banks have closely and continuously estimated the value of their financial commitments -- even those to off-balance sheet entities, like CDO structures.

If a change in the estimated value of a financial commitment to an off-balance-sheet entity produces a loss, that also generates a loss on the income statement. Both Merrill (Charts, Fortune 500) and Bank of America (Charts, Fortune 500) say in recent financial statements that their income statements have already been recognizing value changes in commitments to provide funding to CDOs.

For Citigroup, it was these sorts of CDO funding commitments that led the bank to take $25 billion of CDO debt onto its balance sheet.

If Citigroup were valuing that commitment in the same way as Merrill and Bank of America, then it would presumably have taken at least some losses on it before the CDO debt came on its balance sheet.

And those loss estimates should have been rigorous and sophisticated. That's because FIN 46-R guides companies to give probabilities to different loss scenarios for its unconsolidated entities.

In other words, if FIN 46-R were being followed, all the banks concerned should have been able to produce internal estimates for a range loss scenario -- and they would have been doing so as the credit crunch started this summer.

"We are confident that our financial statements fully comply with all applicable rules and regulations," said Citigroup spokeswoman Christina Pretto.

Just think how much better warned investors would have been if those actual loss estimates had been made public.

And just think how useful it would be to know those loss estimates for distressed conduits the banks must deal with now. 

[Georg P Sveinbjörnsson, 26.11.2007 kl. 14:18]

Já, það verður fróðlegt að fylgjast með framvindunni næstu daga og vikur.

[Sveinn hinn Ungi (IP-tala skráð) 26.11.2007 kl. 17:22]

Herfurðu tölur Baldur um hvað Citigroup og aðrir bankar hafa þurft að afskrifa, sem hlutfall af heildar útlánum. Það væri fróðlegt að skoða þær tölur svona til samanburðar við það að Kaupþing fer í greiðsluþrot ef þeir tapa 12% af útlánum.

[Baldur Fjölnisson, 26.11.2007 kl. 17:57]

Citigroup ætlar núna að segja upp 45,000 starfsmönnum (af 317,000).

Það er erfitt að segja til um hversu mikið stærstu bankar og fasteignalánafélög BNA þurfa að afskrifa en þegar eru það orðnar gríðarlegar fjárhæðir og alls ekki öll kurl komin til grafar eins og Fortune bendir á sbr. fyrra innlegg. Subprime dæmið er bara hluti vandans. Ég held að eigið fé þessarra lykilfyrirtækja geti hreinlega gufað upp en þar sem þau eiga bæði seðlabanka BNA og ríkisstjórn landsins mun þeim án efa verða "bjargað" með seðlaprentun, en að sjálfsögðu á kostnað dollarans og hrun hans hefur verið að segja þetta fyrir.

[Baldur Fjölnisson, 26.11.2007 kl. 19:40]

Hlutabréfamarkaðurinn stjórnar heiminum og þar sem hann stjórnast eingöngu af hagnaði og vexti og næsta ársfjórðungi og þolir ekki neina langtímahugsun, þá hefur þetta fyrirkomulag greinilega ákveðin og alvarleg siðferðileg (og efnahagsleg vandamál).

Við erum núna stödd í risavaxinni tækni- og framleiðnibylgju. Það er verið að jafna út launamun og lífskjaramun vestursins og austursins. Þetta hefur verið í gangi síðustu 20-30 árin amk. Krísan á vesturlöndum snýst um að verð á tækjum og efni fer sílækkandi vegna ofboðslegs innflutnings á offramleiðslugetu og verðhjöðnun frá þrælaverksmiðjum í Asíu. Verð á vinnu manna hér er löngu orðinn grátbroslegur brandari. Þetta hefur verið dulið með skuldapappíraframleiðslu. Jafnframt hefur það sem áður var kallað því virðulega nafni fjölmiðlar opinberlega breyst í auglýsingaruslpóst. Sömu aðilarnir stjórna skuldapappíra- og ruslpóstsframleiðslunni. 

Framleiðsluaukning heimsins hefur verið tröllvaxin. Til þess að koma út fjallgörðum af ódýru drasli frá þrælaverksmiðjum Asíu höfum við sem sagt fengið tröllvaxna skuldaframleiðslu og gígantískan ruslpóst. Laun okkar hefðu þurft að hækka um hundruði prósenta til að taka við öllu þessu drasli en það gekk ekki og því er þessi massífa bylgja falin í skuldapappíraframleiðslu.

[Baldur Fjölnisson, 26.11.2007 kl. 19:54]

Það er erfitt að segja þetta á nærgætnislegan hátt en komonn þið þurfið að vera gjörsamlega heiladauð til að taka minnsta mark á einhverfu trúarfasistunum sem fjármálaveldi heimsins hefur stillt upp til að rugla ykkur í ríminu. George W. Bush, Tony Blair, always a frown with Gordon Brown, Dabbi og Dóri, þessi ósýnilegi sem er að gufa upp í forætisráðuneytinu hjá okkur, fasistarugludallarnir sem þessi fjármálamaskína hefur svikið til valda í Þýskalandi og Frakklandi, og svo framvegis. Þetta er eitt sjónarspil.

[Sveinn hinn Ungi (IP-tala skráð) 26.11.2007 kl. 20:51]

Það er nú ólíklegt að DOW falli um 1000 punkta á einum degi, en hún hefur fallið um yfir 1000 punkta á nokkrum vikum, þannig að það getur alveg haldið áfram eitthvað svipað. Ég hef nú mun meiri trú á Bandarísku efnahags stöðunni en þeirri Íslensku, þar fór seðlabankinn strax að lækka vexti þegar ljóst var að stefndi í samdrátt, en hér eru vextir hækkaðir þó svo að seðlabankinn sjái sjálfur fram á harða lendingu. Ég næ ekki alveg hvað þeir eru að hugsa.

[Baldur Fjölnisson, 26.11.2007 kl. 22:46]

Nei, ég stórefa að frekari skuldapappíraframleiðsla á gervivöxtum leysi vanda sem stafar af óhóflegri skuldaframleiðslu á gervivöxtum. Væri verð peninga í BNA (vextir) gefið frjálst myndi það strax verðleggja inn áhættu vegna ónýtra inneigna og gáleysislegra útlána og fjármagns sem er bundið í ónýtum skímum og sjálfsagt fljótt rjúka upp fyrir 20%. Þetta er stýrður markaður þar sem seðlabanki í eigu einkabanka hefur einkarétt á peningaprentun og ræður auk þess vaxtastiginu. Þetta skapar einkafjármagninu algjört vald og hefur gert í nærri heila öld.

[Baldur Fjölnisson, 27.11.2007 kl. 08:30]

Það er ágætis grein um vandræði rusllánastarfsemi Wall Street í nýjasta Fortune (sem að sjálfsögðu barst til mín í gegnum torrentana) undir yfirskriftinni "What were they smoking?".

[Baldur Fjölnisson, 27.11.2007 kl. 09:40]

...the liquidity and credit crunch in international financial markets is back to its summer peaks of August and, in most dimensions, even worse than in the summer; financial markets are now in a “virtual panic mode” according to a market participant (FT).

...the ECB is now announcing another massive injection of liquidity. This injection of liquidity will miserably fail like the previous ones as the ECB is not getting it that a reduction in its policy rate is now necessary and urgent.