Wie groß sind die Probleme, denen sich die Entscheidungsträger der EU gegenübersehen?

Angela Merkel zeigt es uns:

Zentrale Punkte der Einigung am EU-Gipfel

- 50% haircuts on private holdings of Greek bonds through 2020. Evidently this will still be voluntary. It would cut Greece's debt by €100 billion ($1.39 billion). German Chancellor Angela Merkel said EU leaders aim to see the credit swap take place in January.

- Leverage will increase the firepower of the European Financial Stability Facility by 4-5 times, to somewhere in the range of €1 trillion ($1.4 trillion).

- China and the IMF could play a huge role in the bailout. Not only has the IMF expressed interest in playing a role, French President Nicolas Sarkozy told reporters that he will call Chinese Premier Hu Jintao around midday tomorrow, presumably to discuss this.

- Greece will receive €130 billion ($180 billion) in fresh aid. We're thinking this includes the nearly €110 billion ($150 billion) it was promised back in July.

- EU leaders believe Italy's commitment to debt sustainability and encouraging growth, even though Italian PM Silvio Berlusconi didn't propose any new measures to accomplish these goals in a letter he wrote to some members of the summit today.

- The European Banking Authority estimates that only €106 billion ($147 billion) in funding will be needed to recapitalize European banks and help them meet capital requirements of 9%. Turns out it didn't actually conduct new stress tests accounting for adverse scenarios this time around. European Council President Herman van Rompuy told reporters that banks must reach this 9% ratio with only the "highest quality capital." We're hoping he means Tier 1 capital and will not allow banks to use riskier convertible bonds to meet this number.

- We aren't likely to see a final roadmap on EU treaty changes until March 2012.

Quelle: Business Insider

Das offizielle Dokument zum EU-Gipfel gibt es hier.

Eine unangenehme Frage zum Schulden-Haircut für Griechenland

Greece’s debt will remain 120 per cent of GDP a decade hence, even under the 50 per cent bondholder haircut. (As the debt sustainability analysis by the Troika warned.) Does that look like a safe number to you? Say, providing a good buffer to any external shocks that Greece might face over that period? Does it look like it rules out subsequent bondholder haircuts?

Bei FTAlphaville gibt es noch weitere Fragen, die den Kopf der wirtschaftspolitischen Entscheidungsträger in der EU zum Rauchen bringen sollten.

Was passiert eigentlich mit den Hilfsgeldern für Griechenland?

Die Antwort wird den europäischen Steuerzahlern nicht gefallen:

More than half of the money lent to Greece so far by the International Monetary Fund and European nations has gone to repay bondholders, a transfer of billions of dollars from taxpayers around the world to European banks and pension funds that invested in the troubled Mediterranean nation. [...]

The argument at the time, pressed most forcefully by officials from the European Central Bank, was that imposing losses on private investors would wreck the euro region’s credibility and possibly prompt international bond markets to turn on other countries, such as Spain and Italy.

Nearly 18 months later, with billions of dollars in public money already paid out to bondholders, Greece’s situation has only worsened, and Spain and Italy have come under market scrutiny anyway.

Wie ist es um die Erholung der Wirtschaft im United Kingdom bestellt?

Bei FTAlphaville gibt es diesbezüglich keine guten Nachrichten:

[T]he UK [is left] with no real sources of economic momentum: consumer spending is held back by high private debts and job losses, public spending will fall in real terms, while exports and business investment are now likely to roll over. Stagnation beckons.

In Großbritannien zeigt sich, wie schwierig die Phase der wirtschaftlichen Erholung nach massiven Finanzkrisen ist:

"Überraschungen werden in den kommenden Jahren wahrscheinlich positiver Natur sein"

Inmitten der in diesen Tagen um sich greifenden dunkelschwarzen Krisenberichterstattung liefert David Kotok eine Analyse der derzeitigen Schuldensituation in den USA und in Europa mit folgender vorsichtig-positiver Schlussfolgerung:

Default risk has characterized the last four years of the financial crisis. It is on everyone’s mind. Assumptions about creditworthiness and expectations about the future of creditworthiness are at their lowest, and distrust for rating agencies and credit evaluation is at its highest. The sentiment among market participants is acutely cynical.

All this says to us that the surprises during the coming years are more likely to be on the positive side. Default risks in the realms of sovereign debt, the housing sector, and state and local government have been identified. Concerns about the United States and its default risk have also been identified.

Die Lösung für das Problem? Mehr von dem Problem!

If as Albert Einstein observed insanity is “doing the same thing over and over again and expecting different results”, then the latest proposals for resolving the Euro-zone debt crisis requires psychiatric rather than financial assessment.

The sketchy plan entails Greece restructuring its debt with writedowns around 50% and recapitalisation of the affected banks. The European Financial Stability Funds (“EFSF”) would increase its size to a proposed Euro 2-3 billion from its current Euro 440 billion. This would enable the fund to inject capital into banks and also support Spain and Italy’s financing needs to reduce further contagion risks.

On proposal under consideration entails the EFSF using leverage to increase its size and enhance its ability to intervene effectively.

[...]

The EFSF would apparently bear the first 20% of losses on sovereign bonds and perhaps its investment in banks. This resembles the equity tranche in a CDO (Collateralised Debt Obligations), which assumes the risk of the initial losses on loans or bond portfolios. Assuming the EFSF contributes Euro 400 billion, the total bailout resources would be around Euro 2,000 billion. Higher leverage, a lower first loss piece, say 10%, would increase available funds to Euro 4 trillion. The European Central Bank (“ECB”) would supply the “protected” debt component to leverage the EFSF’s contribution, bearing losses only above the first loss piece size. [...]

The EFSF must borrow money from the markets, relying on its own CDO like structure, backed by a cash first loss cushion and guarantees from Euro-zone countries. In fact, some investors actually value and analyse EFSF bonds as a type of highly rated CDO security known as a super senior tranche. This means that the new arrangement has features of a CDO of a CDO (CDO2), a highly leveraged security which proved toxic in 2007/ 2008. [...]

The 20% first loss position may be too low. Unlike typical diversified CDO portfolios, the highly concentrated nature of the underlying investments (distressed sovereign debt and equity in distressed banks exposed to the very same sovereigns) and the high default correlation (reflecting the interrelated nature of the exposures) means potential losses could be much higher. Actual losses in sovereign debt restructuring are also variable and could be as high as 75% of the face value of bonds.

The circular nature of the scheme is surreal. Highly leveraged vehicles, in part backed by weakened nations like Spain and Italy, are to undertake the “rescue” of the same countries and their banks. Levering the EFSF merely highlights circularity in the entire European strategy of bailouts, drawing attention to the correlated default risks between the guarantor pool and the asset portfolio of the bailout fund. This is akin to an entity selling insurance against its own default. This only works if all commitments are fully backed by real cash and savings, which of course nobody actually has, requiring resort to familiar “confidence tricks”. [...]

It now looks like the proposal to leverage the EFSF via the ECB are unlikely to be pursued - but as this is Europe nothing should be discounted. Instead, different forms of leverage are under consideration - EFSF to enter into credit default swaps to protect holders of bonds issued by weak European sovereign borrowers; EFSF to guarantee the first 10% or 20% or 40% of losses to bondholders; EFSF to act as bond re-insurer.

Quelle: Satyajit Das's Blog

Ein Mangel an Vorstellungskraft

In some sense, all of finance is about imagination because finance is about saying, what should something be worth today based on what I think is going to happen in the future? Nobody knows what’s going to happen in the future. And so all financial models are specifying in some way an imagined future and then saying, if that future is true, what should I pay for something today?

And so for example, if you’re building an option model, you’re saying, what will volatility be in the future? And given my estimate of volatility in the future, I can value an option today. If you’re looking at CDO’s, which sort of came in a cropper in the big financial crisis, essentially human beings are saying, what will housing prices do in the future? What will defaults on loans be and defaults on mortgages be? And given my imagined scenario for the future, what should
I pay for something today that’s sensitive to that future behavior?

The big failures, I think, are failures of imagination, not of mathematics. The big mistakes are when you don’t’ think of something that does come to fruition eventually.

When I was in graduate school, I went to see a movie the night before my qualifying exams called, “Bedazzled” with Peter Cook and Dudley Moore. It’s about 40 years old, but I think it was remade a few years ago. Dudley Moore – I think they’re both dead now, Dudley Moore and Peter Cook – he was a short-order cook at a Wimpy’s in London and he’s in love with the waitress that serves him. Peter Cook plays the devil and offers him seven chances to seduce the waitress in exchange for his soul. And so he agrees. And then he tries to specify the circumstances under which he will be with the waitress. And so the first time, he says something like, he’d like to be in a fancy castle in Oxfordshire and with her and both of them in love with each other and both of them wealthy. And the devil snaps his fingers, and there they are in this castle and they’re around the billiard table and they’re in love with each other, but she’s married to the owner of the castle and he’s just a guest. And she has scruples, so she’s not willing to get involved with him.

And in every scenario he tries of these seven scenarios he gets it wrong. In the last one he asks if they can both just be somewhere quiet with nobody to interfere with them and nobody talking, and they make them both nuns in a sort of Trappist monastery.

And so his imagination can never specify precisely enough the future that he’d like to have. And I think that’s sort of what goes wrong with a lot of financial models. You can’t really write down one short description of all the things that markets may do in the future.

Quelle: The Big Picture

Fehler, die es zu vermeiden gilt. Abschreckende Beispiele

As the economy languishes, politicians and pundits are debating what to do next. When we look around the world, it’s hard to find positive role models. But as we search for answers, it is useful to keep in mind those fates that we would like to avoid.

The recent economic histories of four nations are noteworthy: France, Greece, Japan and Zimbabwe. Each illustrates a kind of policy mistake that could, if we are not careful, presage the future of the United States economy. Think of them as the four horsemen of the economic apocalypse.

Den ganzen Artikel von Greg Mankiw gibt es hier.

Amerikas Großbanken erleiden einen Einbruch

The biggest Wall Street firms posted their worst quarter in both trading and investment banking since the depths of the financial crisis as they face questions about the future of their business.

JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC), Citigroup Inc. (C), Goldman Sachs Group Inc. (GS) and Morgan Stanley posted $13.5 billion in trading revenue minus accounting gains for the third quarter, down 35 percent from a year earlier. Investment- banking revenue plunged 41 percent from the second quarter to $4.47 billion.

Quelle: Bloomberg

Ein wichtiges Wochenende steht vor der Tür

Das anstehende Wochenende wird für die weitere Entwicklung der Schuldenkrise in Europa von Bedeutung sein:

Just as we did too many times in 2008, we are about to enter into a weekend where all eyes are on government officials and their attempt to deal with a major financial problem. All the big European guns are in Frankfurt to settle differences and come to an agreement: Draghi, Trichet, Van Rompuy, Barroso, Schaeuble, Baroin, Juncker, Sarkozy, Merkel, and Lagarde.

Siehe auch:

The President and German Chancellor spoke today by telephone to prepare the European dates in the coming days.

The President and the Chancellor have agreed to provide a comprehensive and ambitious global response to the current crisis in the euro area.

This response will include the following:

- The operational implementation of new forms of intervention EFSF.

- A plan to strengthen the capital of European banks.

- The implementation of the economic governance of the euro area and the strengthening of economic integration.

For a lasting solution to the situation in Greece, the Greek authorities will have to make ambitious commitments to address the situation of their economies as part of a new program. Based on the report of the troika and the analysis of debt sustainability Greece, France and Germany call for immediately undertake negotiations with the private sector to reach an agreement for strengthening sustainability.

The President and the Chancellor will meet Saturday night in Brussels ahead of the European Council summit in the euro area on Sunday.

France and Germany have agreed that all elements of this ambitious and comprehensive response will be discussed in depth at the summit on Sunday in order to be finally adopted by the Heads of State and Government at a second meeting later than Wednesday.

Quelle: Calculated Risk

"Geldpolitik muss größeres Augenmerk auf die Stabilität der Finanzmärkte legen"

Ben Bernanke gesteht ein, dass bei den Notenbanken ein Umdenken stattfinden muss:

Federal Reserve Chairman Ben S. Bernanke said Tuesday that he is more open to using the Fed’s interest rate policies to combat financial bubbles, arguing that in the wake of the economic crisis, central bankers must rethink their assumptions.

Before the economic upheaval, Bernanke acknowledged, central banks viewed financial stability as a “junior partner” to the task of tweaking interest rates to try to boost growth. But both stability and monetary policy are of vital importance to the U.S. economy, he said.

19. Oktober 1987: Ein rabenschwarzer Börsentag

Gestern jährte sich der wohl schwärzeste Börsentag des 20. Jahrhunderts zum 24. Mal:

On this day in 1987, the stock market suffered its worst crash of the 20th Century, even worse than 1929. The Dow lost 22% in a single day.[...]

A Brief 1987 Recap – Even if there had been no “October Surprise”, the year 1987 would have been a remarkable one for Wall Street. The Dow started the year below 2000 and ran to 2722 by early Fall. (A gain of nearly 38%.) The rally was breaking all the old rules. A group of guys in Chicago came up with a new rule called Portfolio Insurance ( or Dynamic Hedging) which might be synopsized as buy strength/sell weakness (we’ll explain another day). The U.S. dollar was weak and the subject of controversy. There was some conflict and confrontation in Iran (U.S. bombing Iranian oil platforms). The President’s wife and right hand had gone into the hospital for a rumored cancer operation. And there was a new SEC chairman who was misquoted in the midst of the free-fall suggesting that maybe markets should close. The misquote greased the skids.

"Entrüstung über die Finanzbranche" in den USA. Occupy Wallstreet nimmt Fahrt auf

There is an unfocused financial rage in the United States.

It was born in the late 1990s on an unholy trinity of accounting swindles, the dot-com collapse and analyst scandals. It grew on a housing boom and bust that created 5 million (and counting) foreclosures, leaving more than a quarter of bank-financed homes worth less than their mortgages. It matured on a growing wealth disparity that eviscerated the middle class and brought back the plutocracy of the 1920s. It reached its peak with the bailout of reckless bankers, who were rewarded for their irresponsibility with what may be the greatest wealth transfer in human history.

And now it seems to be finding its voice with the movement known as Occupy Wall Street.

Quelle: Barry Ritholtz

Kahnemans neues Buch. Wider die Ansicht, der Mensch treffe immer und überall rationale Entscheidungen

Um Entscheidungen, die von Menschen und Institutionen im Wirtschaftsleben getroffen werden, besser verstehen zu können, hat sich in den Wirtschaftswissenschaften eine noch recht junge Fachrichtung herausgebildet, die sich mit den kognitiven, sozialen und emotionalen Hintergründen von wirtschaftlichen Entscheidungen befasst: Behaviorial Economics. Einer der Gründerväter der wirtschaftswissenschaftlichen Verhaltensforschung, der Psychologe Daniel Kahneman, bringt dieser Tage ein neues Buch auf den Markt, das einen populärwissenschaftlichen Zugang zu zentralen Problemen verspricht, die aus den drastischen Verzerrungen, denen der menschliche "Entscheidungsapparat" ausgeliefert ist, erwachsen. Jonah Lehrer gibt einen Ausblick darauf, was von Kahnemans Buch zu erwarten ist:

In Mr. Kahneman’s important new book, “Thinking, Fast and Slow,” his first work for a popular audience, he outlines the implications of this new model of cognition. What are the most important mental errors that we all make? And can they be overcome?

Consider the overconfidence bias, which drives many of our mistakes in decision-making. The best demonstration of the bias comes from the world of investing. Although many fund managers charge high fees to oversee stock portfolios, they routinely fail a basic test of skill: persistent achievement. As Mr. Kahneman notes, the year-to-year correlation between the performance of the vast majority of funds is barely above zero, which suggests that most successful managers are banking on luck, not talent.

…And it’s not just investors who suffer from this mental flaw. The typical entrepreneur believes that he or she has a 60% chance of success, though less than 35% of small businesses survive more than five years. Meanwhile, CEOs who hold more company stock—taken here as a sign of self-confidence—also tend to make more irresponsible decisions, overpaying for acquisitions and engaging in misguided mergers.

Even consumers are hurt by this bias. A recent survey of American homeowners found that they expected, on average, to spend about $18,500 on remodelling their kitchens. The actual average cost? Nearly $39,000.

We like to see ourselves as a Promethean species, uniquely endowed with the gift of reason. But Mr. Kahneman’s simple experiments reveal a very different mind, stuffed full of habits that, in most situations, lead us astray. Though overconfidence may encourage us to take necessary risks—Mr. Kahneman calls it the “engine of capitalism”—it’s generally a dangerous (and expensive) illusion.

What’s even more upsetting is that these habits are virtually impossible to fix. As Mr. Kahneman himself admits, “My intuitive thinking is just as prone to overconfidence, extreme predictions and the planning fallacy as it was before I made a study of these issues.”

Zur Entwicklung am US-Arbeitsmarkt. Die Schaffung und Zerstörung von Arbeitsplätzen

Job creation has been headed down in a pretty persistent way since 2000. Job creation rose slightly to a quarterly rate of about 9 percent of total employment in the 1990 recession. Still, job destruction rose even more during that recession. During the 1990s, job creation settled at about an 8 percent rate. Job destruction fell sharply during the 1990s, as did the unemployment rate.

Job creation dipped during the 2001 recession (more normal behavior than in 1991) but the recovery was startlingly weak. Since 2000, job creation has never reached the rates of the mid-1990s. Indeed, in the current recovery, job creation remains at the lowest rate as a percent of total employment of the post–World War II period.

Haltiwanger, John: Job Creation and Firm Dynamics in the U.S.

Ein Interview ohne Antworten, BNP-Style

Das Handelsblatt hat ein Interview mit Baudouin Prot, dem CEO von BNP Paribas, veröffentlicht. So weit, so gut; es erscheinen ja beinahe täglich Interviews mit wichtigen Führungskräften des europäischen Bankensektors. Und in einem Moment spontaner Ehrlichkeit muss man sich wohl eingestehen: Nicht jedes dieser Interviews ist es wert, eingehend gelesen zu werden. Ich habe jedenfalls oft schon nach wenigen Sätzen genug von der hohlen Phrasendrescherei, die einige Banker in Interviews von sich geben. Umso interessanter sind Meldungen wie diejenige, dass das "Handelsblatt" das Interview mit Prot publizierte, ohne dessen Antworten anzuführen:

The back-story here is that Handelsblatt interviewed BNP boss Baudouin Prot who subsequently insisted on revising his answers. (This practice is regrettably common in the newspaper industry).

But fed up with the excessive meddling, the German paper decided to publish the interview without the answers.

BNP zeigte sich ob dieses "Missverständnisses" not amused.

Europas G R O O O ßbanken

Am Beispiel Frankreichs habe ich bereits einmal darauf hingewiesen: Europas Großbanken haben derartig gewaltige Bilanzsummen, dass diese das Bruttoinlandsprodukt der Länder, unter deren nationale Bankenaufsicht die jeweiligen Banken fallen, zum Teil um ein Vielfaches übersteigen. Bei "Credit Writedowns" gibt es dazu die oben angezeigte anschauliche Grafik, bei der einem allerdings das Blut in den Adern gefriert, wenn man über die möglichen Konsequenzen im Falle von notwendigen Rettungsaktionen nachdenkt.

Was ist die Zukunft Chinas?

Chinas Wirtschaft hat in den letzten dreißig Jahren eine rasante Entwicklung genommen:

In thirty short years, China was able to accelerate her GDP from $216 billion to $11 trillion. She amassed reserve capital of $3 trillion. She reversed America’s fortunes from the greatest creditor nation to the greatest debtor nation. She gutted America’s factories while creating the world’s largest manufacturing base in her own country. A measure of output that highly correlates to GDP is energy consumption. In June of this year, 2011, China surpassed the United States as the largest consumer of energy on the planet. While the U.S consumes 19 percent of the world’s energy, China consumes 20.3 percent.

Wie wird es mit der chinesischen Volkswirtschaft weitergehen? Dazu schreibt James Quinn:

There are few opinions in the middle regarding the China story. People are either convinced China is a juggernaut that can’t be stopped and will become the dominant world power (a recent, global Pew Poll found that 47% of respondents think China is or will be the dominant global power), or they see a colossal bubble that will burst and cause worldwide mayhem.

Quinn gehört ins Lager derer, die in China große Probleme am Horizont sehen, weil es eine gewaltige Immobilienblase und ein massives Inflationsproblem gebe. Es gibt jedoch auch die Ansicht, dass die chinesische Blase nicht so schlimm sei wie die geplatzte Immobilienblase in den USA:

As housing bubbles go, China's looks relatively benign. Unlike in the United States, Chinese home buyers typically put down at least 40 percent of the purchase price. That means they don't have to worry about a modest decline wiping out all their equity, and banks have little reason to fear an influx of "jingle mail" from defaulting homeowners returning the keys.

Household debt amounts to less than 20 percent of China's gross domestic product, according to the International Monetary Fund, one fifth of the U.S. ratio.

Aber natürlich ist da nicht nur das isolierte Problem der Immobilienblase. Die Fragilität der chinesischen Großbanken wird immer deutlicher; es könnten massive staatliche Rettungsaktionen notwendig werden. Drängende soziale Probleme sind ungelöst: Die Gesundheitsversorgung ist für Millionen Chinesen unerschwinglich; die Einkommensunterschiede sind enorm. Die Korruption blüht in großen Bereichen der Wirtschaft. In Sachen Umweltverschmutzung liegt vieles im Argen. Und bei dieser selektiven Aufzählung haben wir das gewaltige Problem der demografischen Entwicklung der chinesischen Bevölkerung noch gar nicht angesprochen.

Das Eingangszitat macht deutlich, welchen enormen Stellenwert die chinesische Wirtschaft im globalen Kontext hat. Die USA sind von ihren chinesischen Gläubigern abhängig, und auch im Rest der Welt würden viele Lichter ausgehen, wenn der chinesische Wachstumsmotor ins Stocken geriete.

Härtere Strafen für Insider-Handel

When disgraced hedge-fund titan Raj Rajaratnam is sentenced in federal court Thursday, he will come up against a hard and unavoidable truth: Inside traders are facing considerably harsher sentences than they did in the past.

Mr. Rajaratnam, Wall Street's latest symbol of perfidy and excess, is expected to receive among the longest-ever U.S. prison terms for his role in one of the biggest U.S. insider-trading cases ever, lawyers say.

A higher percentage of those found guilty of such crimes are receiving significant time behind bars than in the past, according to a Wall Street Journal analysis.

Quelle: WSJ

Schuldenabbau und Geldpolitik

Wie kann es sein, dass sich selbst Experten in Sachen Geldpolitik nicht einig sind, in welchem Umfang die Notenbanken in der derzeitigen Situation Maßnahmen ergreifen sollten, um die Wirtschaft anzukurbeln? Die Berücksichtigung der Rolle des Schuldenabbaus kann dabei ein wichtiges Element zur Erklärung sein, wie man bei Rortybomb nachlesen kann:

1 – Balance Sheet Recession. People who think that deleveraging is real, and no amount of monetary stimulus will help.

These are people like Richard Koo. Their argument goes that the presence of excess debt is the key constraint holding back economic growth. No amount of monetary stimulus will fundamentally change the asset position of households, and so there’s no way it will alter consumption or output (or, at least, not to the degree that is necessary). Raghuram Rajan may believe something like this, as best as I can tell. The MMT folks are probably best placed here as well.

As Beckworth and Rognile point out above, this view doesn’t make sense given the conventional understanding of how monetary policy ought to operate. If we desire greater spending from households or creditors; we can always make that happen by flooding the system with money.

2 – Liquidity Trap People who think that deleveraging is real, monetary stimulus could help, but the Fed won’t deliver enough.

These are people like Paul Krugman. As Rognile points out — Krugman is careful to note how deleveraging is only an issue if you’re in a liquidity trap, but that nuance tends to be lost among many other commentators. Elsewhere, he has argued that fiscal stimulus is only worthwhile as long as interest rates are zero — at other times, he often takes for granted that monetary policy ought to handle the brunt of aggregate demand management (or at least he did in the ’90s).

In that sense, Krugman actually agrees with Scott Sumner on more issues of intellectual substance than, say, with Keynes. It’s just that Krugman believes that in this particular instance, we happen to be in some kind of liquidity trap in which monetary policy won’t be sufficient to tackle the headwinds of a deleverage cycle.

3 – Quasi-Monetarists Then; there are people who believe that deleveraging may be a concern; but monetary policy (even with a zero-rate bound) ought to handle everything.

Here are the market monetarists like Scott Sumner and David Beckworth, as well as Matt Rognile. The belief is not only that monetary policy can fix any conceivable deleverage shock; but that the Fed could do so tomorrow given the set of tools they have; involving perhaps the adoption of a price level, getting more QE, imposing interest on reserves, or offering guidance on the future path of interest rates.

via FTAlphaville

Wie viel Stress halten Europas Banken aus?

FTAlphaville hat ein wenig mit dem Stresskalkulator gespielt.

Siehe auch: Stresstests werden schärfere Kapitalvorgaben enthalten.

Niedrigere Gewinne für Investmentbanken in den USA. Für Retailbanken schaut es besser aus

Goldman Sachs Group Inc. (GS), whose shares have fallen 43 percent this year, may report its lowest quarterly profit since the 2008 financial crisis. Far from Wall Street, Wells Fargo & Co. (WFC) is headed for record earnings.

Third-quarter U.S. bank earnings, which kick off with JPMorgan Chase & Co. (JPM) on Oct. 13, will show that investment- banking businesses such as bond trading and merger advice declined, while retail operations like mortgage lending prospered, according to analysts including Richard Staite at Atlantic Equities LLP in London.

It’s a reversal from 2009 and early 2010, when rising markets and a perfect trading record propelled New York-based Goldman Sachs to its highest profits ever, as commercial lenders including SunTrust Banks Inc. (STI) in Atlanta charged off billions of dollars of delinquent mortgages.

Quelle: Bloomberg

Wer ist Schuld an der hohen Marktvolatilität? Böses Kokain

Inmitten all der düsteren Krisenberichte sollten wir uns auch einmal etwas zum Schmunzeln gönnen:

An undersecretary for Italian Prime Minister Silvio Berlusconi has proposed a drug-testing program for stock traders, citing studies that point to a “worrisome” link between substance abuse and market fluctuations.

Some Italians may have entrusted savings to people “not capable of making decisions” due to drug use, Carlo Giovanardi said in a phone interview today from Belluno, Italy.

Giovanardi, who’s responsible for the government’s family and drug-abuse prevention policy, said he plans to contact regulators and industry groups working with the stock exchange to discuss the drug-testing plan. The program could be developed without the passage of a new law, he said. [...]

Giovanardi, who last year promoted a voluntary drug test for members of parliament, also cited “U.S. studies” suggesting recent market turmoil may have been amplified by “people who’ve lost touch with reality” due to drug use.

Quelle: Bloomberg

Angesichts dieses unheimlich drängenden Problems könnte man glatt die anderen, fast hätte ich gesagt: die wirklichen Probleme Italiens vergessen. Beinahe.

"Ist das Verbot von Leerverkäufen die Lösung?"

In response to the sharp decline in prices of financial stocks in the fall of 2008, regulators in a number of countries banned short selling of particular stocks and industries. Evidence suggests that these bans did little to stop the slide in stock prices, but significantly increased costs of liquidity. In August 2011, the U.S. market experienced a large decline when Standard and Poor’s announced a downgrade of U.S. debt. Our cross-sectional tests suggest that the decline in stock prices was not significantly driven or amplified by short selling. Short selling does not appear to be the root cause of recent stock market declines.

Furthermore, banning short selling does not appear to prevent stock prices from falling when firm-specific or economy-wide economic fundamentals are weak, and may impose high costs on market participants.

Quelle: Staff Report Fed New York

Die Wochen der Entscheidung für Europa

Angela Merkel and Nicolas Sarkozy [...] gave themselves three weeks to devise a plan to recapitalize banks, get Greece on the right track and fix Europe’s economic governance.

“By the end of the month, we will have responded to the crisis issue and to the vision issue,” the French president said in Berlin yesterday at a joint briefing with the German chancellor before they dined at her office.

[...] Merkel said European leaders will do “everything necessary” to ensure that banks have enough capital. Sarkozy said they would deliver a plan by the Nov. 3 Group of 20 summit.

Quelle: Bloomberg

"Angst bringt selten das Beste im Menschen hervor"

By any measure, the global economy is facing unusually high levels of uncertainty and volatility. But human nature may be impeding our ability to turn the economy around.

[...]

Along with making people irritable, uncertainty can create paralysis. Some animals freeze when they are frightened. Acting like a deer in the headlights can be a good strategy if you are trying not to be seen, but it can get you run over.

In humans, this behavior is illustrated by an experiment conducted by the Princeton psychologist Eldar Shafir. The subjects, who were graduate students, were told about an attractive deal for a spring-break vacation. They could get an especially good price if they bought their tickets now, rather than waiting a week. But, as part of the deal, the students wouldn’t hear the results of an important exam until the discount expired. That uncertainty caused many students to freeze: Although a majority said they intended to take the trip whether or not they passed the exam — either to celebrate their success or recover from failure — they didn’t want to buy the tickets until they found out the results.

I worry that many Americans are now acting like Professor Shafir’s subjects.

Den ganzen Artikel gibt es in der NYT.

"Ist eine neuerliche Rezession in den USA eine ausgemachte Sache?"

Recession probabilities once again are Topic One in the United States. This week the influential Economic Cycle Research Institute (ECRI) took the position that a U.S. recession is inevitable in the near term if it has not started already. Regarding Europe, many observers believe that a Eurozone recession is in the works, but the likelihood that the United States will follow suit is a subject of intense debate.

[...]

I emphasize that a U.S. recession is certainly possible, given that a Eurozone recession looks very likely. It is entirely conceivable that European policymakers will fail to gather the necessary resources in time to prevent financial-market contagion to peripheral countries, such as Italy and Spain, or to recapitalize their banks sufficiently quickly in the face of or, better yet, in advance of a Greek default. Such a financial shock, if it occurs, could be transmitted to the United States with sufficient severity to lead to recession here. This would be a new negative shock, however, and does not appear to be built into current early-warning financial indicators in the United States to a sufficient degree to make a U.S. recession the base case at this time. My current reading of the financial market indicators of the U.S. business cycle is that investors are more concerned about Japan-style economic stagnation right now than about a traditional recession.

Quelle: Econbrowser

"Die Politik ist in den USA kein stabilisierender Faktor, ganz im Gegenteil"

The recovery from the recession of 2008-09 remains anemic. Job growth has stalled, unemployment stands above 9 percent, and there are renewed fears of another output drop.

A major factor behind the weak recovery and gloomy outlook is a climate of policy-induced economic uncertainty. An index we devised (see attached chart) shows U.S. policy uncertainty at historically high levels.

We constructed our index by combining three types of information: the frequency of newspaper articles that refer to economic uncertainty and the role of policy, the number of federal tax code provisions set to expire in coming years, and the extent of disagreement among forecasters about future inflation and government spending.

Our index shows prominent surges in policy uncertainty around the time of major elections, the outbreak of wars and after the Sept. 11 attacks. It shows another surge after the bankruptcy of Lehman Brothers Holding Inc. in September 2008. Policy uncertainty has remained at high levels ever since.

Quelle: Bloomberg

Zombie Economics

Zweifel, Unsicherheit, Ängste: Was ist aus den USA geworden? Wie mag es weitergehen?

Wer die amerikanischen Medien wie ich recht intensiv verfolgt, muss feststellen, dass die wirtschaftlichen Erfahrungen der letzten Jahre zusammen mit gesellschaftlichen Entwicklungen, die schon seit längerem ins Fleisch der Gesellschaft schneiden - z.B. die seit Jahrzehnten stagnierenden Einkommen weiter Teile der Bevölkerung - tiefe Spuren hinterlassen haben. Manche sprechen schon von einem verlorenen Jahrzehnt und sehen wenig Anlass zu Optimismus:

[T]he signs of wreckage couldn’t be clearer. It’s as if Hurricane Irene had swept through the American economy. Consider this statistic: between 1999 and 2009, the net jobs gain in the American workforce was zero. In the six previous decades, the number of jobs added rose by at least 20% per decade.

Then there's income. In 2010, the average middle-class family took home $49,445, a drop of $3,719 or 7%, in yearly earnings from 10 years earlier. In other words, that family now earns the same amount as in 1996. After peaking in 1999, middle-class income dwindled through the early years of the George W. Bush presidency, climbing briefly during the housing boom, then nosediving in its aftermath.

In this lost decade, according to economist Jared Bernstein, poor families watched their income shrivel by 12%, falling from $13,538 to $11,904. Even families in the 90th percentile of earners suffered a 1% percent hit, dropping on average from $141,032 to $138,923. Only among the staggeringly wealthy was this not a lost decade: the top 1% of earners enjoyed 65% of all income growth in America for much of the decade, one hell of a run, only briefly interrupted by the financial meltdown of 2008 and now, by the look of things, back on track. [...]

As for this decade, less than two years in, we already know that the news isn't likely to be much better. The problems that plagued Americans in the previous decade show little sign of improvement.

In Europa hält sich immer noch das Vorurteil, die Amerikaner seien allesamt selbstherrlich, arrogant und unreflektiert. Doch im Moment stellen sehr viele amerikanische Bürger ihr Land in Frage; sie bringen ihre Selbstzweifel zum Ausdruck; sie offenbaren ihre Zukunftsängste: Wie mag es mit den USA weitergehen, zumal sich die politischen Gräben immer bedrohlicher auftun?

Auch anlässlich des Todes von Steve Jobs sind zahlreiche Reflexionen über den Status Quo der amerikanischen Wirtschaft und Gesellschaft zu lesen. Ein Beispiel dafür:

Earlier this year a Federal Reserve official tried to tamp down worries about inflation by noting that, while food and petrol were getting more expensive, you could now buy an iPad that was twice as powerful for the same price as the previous model. The remark, soon lampooned as “Let them eat iPads”, predictably drew derision. But it typified a tactic to which American leaders frequently turn when they need a rejoinder to economic doomsaying: cite an Apple product.

As bad as their politics has got, Americans could always comfort themselves with the knowledge that their business leaders, entrepreneurs and workers were the most dynamic and innovative in the world. But they may look back on 2011 and see three events that undermine that story: the downgrade of America’s credit rating; the last flight of the space shuttle; and Mr Jobs’s death. [...]

Of course, it would be foolish to count out Apple, much less an entire economy, because of one man’s death. Yet even if Apple remains as successful as it has been under Mr Jobs, that success long ago decoupled from that of the broader economy. [...]

Americans' entrepreneurial self-esteem is now embodied by Apple, Google, Facebook and Amazon. These are indeed fabulously innovative companies with world-beating business models. Yet one wonders if they are increasingly the exception, not the rule, and if the passing of Mr Jobs is simply the most prominent example of a broader decline in American entrepreneurship.

Sind die Finanzmärkte effizient, wenn es um die Verarbeitung von Informationen geht?

How efficiently do financial markets process news of unexpected events? This question becomes particularly salient now, as multiple events across the globe drive market movements. Do these gyrations reflect responses to fundamental news or to “noise”? In general, it is very difficult to discern how well markets process information, because there is no objective way for observers to separate fundamental news from noise components when markets react to a news report. In this post, however, we examine an unusual episode involving a false news report that provides a unique look into this question. We find that even when noise can be clearly identified, markets may take as long as a week to fully process the “signal,” or relevant information, component of news.

Hier geht's zum ganzen Artikel.

"Geldpolitik ist kein Allheilmittel"

Ben Bernanke sagte dieser Tage vor dem Kongress aus. Die Schlussfolgerung seiner Ausführungen liest sich so:

Monetary policy can be a powerful tool, but it is not a panacea for the problems currently faced by the U.S. economy. Fostering healthy growth and job creation is a shared responsibility of all economic policymakers, in close cooperation with the private sector. Fiscal policy is of critical importance, as I have noted today, but a wide range of other policies--pertaining to labor markets, housing, trade, taxation, and regulation, for example--also have important roles to play. For our part, we at the Federal Reserve will continue to work to help create an environment that provides the greatest possible economic opportunity for all Americans.

Europa retten, nur wie?

John Quiggin und Henry Farrell vertreten die Auffassung, dass die führenden EU-Politiker die Dinge nur schlimmer machen, als sie ohnehin schon sind:

Europe is on the brink of disaster—again. The possibility of a Greek default sent the markets roiling on Tuesday. And despite more than $2 trillion doled out to troubled nations such as Greece and Portugal, Europe’s leaders are once again meeting behind closed doors, trying to find a way to stanch the bleeding.

It won’t work, and the window of opportunity is closing fast. At their core, Europe’s problems are political, not economic. And until the continent’s richer nations find the political will to help their poorer counterparts, the situation will remain dire.

If this was just an economic problem, the solution would simple. In the short-term, Europe needs to shore up investor confidence, and the European Central Bank could do that by announcing that its top priority is preserving the euro, not price stability. This would allow the ECB to increase the money supply and ease the strain on struggling economies such as Greece and Portugal. In the meantime, the wealthier nations could put together a once-off restructuring of, say, Greek debt, and a recapitalization of the country’s national banks. [...]

The problem: Figuring out the politics. Richer member states such as Germany and the Netherlands don’t want to pay for the profligacy of Greece and Portugal. Poorer member states—like Greece and Portugal—say that they are suffering from the economically harmful austerity measures that richer states are demanding.

[...]

Europe’s leaders should instead [...] [be] pushing for radical political change, namely, radically increasing democratic control, and making the continent as politically integrated as it is economically. [...] Creating this union wouldn’t be easy. Europe remains politically divided—both in terms of its leaders and its citizens. Yet the old disguises no longer work. And a truly united Europe may be the only way to end this seemingly interminable crisis.

"Die Bilanzen der Banken sind undurchsichtig"

Morgan Stanley in a free fall. Goldman Sachs at multi-year lows. Citigroup looking Ugly. Bank of America off 50% from recent highs.

You may be wondering what is going on with the major firms in the financial sector. While each of these firms have different problems — vampire squids to Countrywide acquisitions — they all have something in common: Their balance sheets are opaque.

[...]

The bottom line is this: Investors do not really have a clear idea of how healthy any of these banks truly are. We do not know the state of their balance sheets. We do not know what their exposures are to mortgages, to Europe, to Greece, etc. They could all be technically insolvent, as far as any investor can tell.

And that is exactly how the bankers wanted it.

But given the trouble in Europe, and the likely problems in housing if the US goes into a recession, Investors have decided they cannot take the risk of a holding an opaque, possibly under-capitalized probably over-leveraged financial firm blindly. They are telling the banks no thanks, we are not interested, we are going to be prudent and we have to assume the worst. Hence, for the second half of 2011, they have been selling off their holdings in these opaque, potentially insolvent too big to succeed entities.

Quelle: TBP

"Die Trennlinie zwischen Erholung und Rezession war noch nie dünner"

Joshua Brown sieht schwarze Wolken am Konjunkturhimmel:

The veil between recovery and recession has never been thinner and all the old ghosts of the past have returned to haunt us once again, some of them almost exact replicas of their prior incarnations. Witness:

Rumors of hedge funds blowing up run rampant through the tape.

Bankruptcy talk for storied franchises like American Airlines and Eastman Kodak now litters the headline ticker.

Confidence is at all-time lows. We've not been this despondent about our leadership and forward-track in all of our recorded history as a society - the Civil War era and Great Depression included.

The certainty of higher taxes is also now taking hold, from the middle class on up. We know it's coming no matter who is elected, it's only a matter of timing and degree.

[...]

And of course Europe is the very spookiest of ghosts dancing 'round the harvest bonfire this season. Playing the role of the Ghost of Lehman this Halloween is the EU Fiscal Union and what's left of the ECB as a credible institution. In hindsight, it's a miracle that something like this was ever even attempted let alone allowed to persist for so long. Picture the self-satisfaction of the French, backed by the sweat-equity of the German efficiency empire, supporting an epic Mediterranean talent for deception and then topped off with a creme fraiche of Continental haughtiness - then you get to the heart of why this mess is so un-clean-up-able. The monetary-union-that-wasn't is a combination of all the worst traits of each of its member states, a 10-car pileup of cultural flaws just begging to be toppled so that the BMW at the bottom of the pack can drive away from the Peugeots and the Fiats with only minor scrapes and scratches.

Den ganzen Artikel gibt es hier.

Startschuss für "Bankenrettungsaktionen". Dexia ist wieder einmal in höchster Not

France and Belgium rushed to the aid of Dexia SA (DEXI.BR) on Tuesday, in what will be the first state rescue of a European bank in the euro zone sovereign debt crisis.

The lender to hundreds of French and Belgian towns, which also needed propping up after the 2008 financial crisis, will see its French municipal finance arm broken off and put under the ownership of French state banks.

The rescue plan also looks likely to involve a broader break-up, with the sale of healthier operations, such as its Belgian and Turkish banking businesses, as well as the creation of a state-guaranteed pool of toxic assets. [...]

"Basically, what we're getting toward here is backdoor nationalization," said one London-based analyst speaking on condition of anonymity. "Everything that's happening now is just a case of how you split up the pie but really the pie is all going toward the state, effectively."

Quelle: Reuters

Die anderen 99 Prozent der Bevölkerung

Ezra Klein tut seine Meinung zu Occupy Wallstreet kund:

These are not rants against the system. They’re not anarchist manifestos. They’re not calls for a revolution. They’re small stories of people who played by the rules, did what they were told, and now have nothing to show for it. Or, worse, they have tens of thousands in debt to show for it…

This is why I’m taking Occupy Wall Street — or, perhaps more specifically, the ‘We Are The 99 Percent’ movement — seriously. There are a lot of people who are getting an unusually raw deal right now. There is a small group of people who are getting an unusually good deal right now. That doesn’t sound to me like a stable equilibrium…

What gives their movement the potential for power and potency is the masses who just want the system to work the way they were promised it would work. It’s not that 99 percent of Americans are really struggling. It’s not that 99 percent of Americans want a revolution. It’s that 99 percent of Americans sense that the fundamental bargain of our economy — work hard, play by the rules, get ahead — has been broken, and they want to see it restored.

Quelle

Welche Fragen werden die Volkswirtschaftslehre in den nächsten Jahren am meisten beschäftigen?

Viele bekannte, in den USA forschende und lehrende Wissenschafter wurden mit ebendieser Frage konfrontiert; hier geht es zu den Antworten.

Zum Keynes-Jubiläum

Auch John Cassidy hat sich anlässlich des 75-jährigen Erscheinungsjubiläums des großen Werks "The General Theory of Employment, Interest and Money" mit Keynes und dem Keynesianismus beschäftigt:

But the real essence of Keynes, I eventually decided, can be expressed in these terms:

1. In the short-run, demand is what drives economies, not prices.

2. In a demand-driven economy, many types of unfavorable and self-sustaining outcomes are possible, including lengthy slumps.

3. The role of the government is to sustain demand and help the economy avoid such disastrous outcomes.

I regard these statements as truisms, even though others would dispute them, to varying degrees. Once you get beyond them, things get murky. For example, like most economists of a certain age, I was brought up on the “I.S.L.M.” model, a toy version of Keynesianism due to Sir John Hicks, which allows you to depict the entire economy in the form of two simple curves: one representing investment and saving, the other the supply and demand for money. In policy terms, the I.S.L.M. setup remains immensely useful. Whenever I hear somebody saying, “We should cut taxes on X,” or, “The Fed should do Y,” I automatically think to myself: “What would that do to the I.S. and L.M. curves?” I’d be willing to bet that many of the economists who work at the White House and the Fed go through a similar exercise.

But I.S.L.M. is a crude form of Keynesianism. It depends on the assumption that prices are fixed, which is obviously not true. Conservative economists have always posed this question: In a depressed economy, why won’t prices and wages adjust to restore a full-employment “equilibrium”? Keynes’s answer, which it must be said he never fully integrated into what modern economists would recognize as a “model,” had to do with uncertainty and crowd psychology. When “animal spirits” are depressed, he pointed out, the mere availability of cheap money and cheap labor won’t be sufficient to make businesses invest and expand. Rather, the economy will get stuck in rut.

"Die Zukunft erscheint als nicht besonders rosig und das ist das wirkliche Problem"

Antonio Fatas will, dass häufiger das Wort "Angst" in den Mund genommen wird, wenn es um die Frage geht, warum die Wirtschaft nicht auf den Wachstumspfad zurückkehrt:

What is keeping growth in advanced economies from recovering at a speed similar from previous recessions? There are several explanations and which one you prefer might depend on your political taste (see an example of this debate in the US here).

There is one potential explanation that I find is being overemphasized: "it is all about uncertainty". And some make it more explicit and talk about regulatory uncertainty, uncertainty about taxes, about a sovereign default in Europe, etc.

No doubt that uncertainty plays a role in explaining macroeconomic fluctuations and I am a big fan of Nick Bloom's work, an economist at Stanford, who has provided strong evidence that uncertain raises around some of the most recent recessionary episodes.

But what do we mean when we use the word uncertainty to describe the current environment? I believe we are mixing two things: one is that the future is more difficult to predict (and this truly matches the notion of uncertainty) but the second one is that future scenarios are simply worse than what we thought before. This is not uncertainty, this is just bad news. [...]

My preference would be to use the word fear rather that the word uncertainty to describe what we are seeing these days. What is really damaging is the possibility of a new recession, the possibility of sovereign default. These are all bad news. On average the future does not look great and this is the real problem.

Quelle

Arbeitslosigkeit? "Kein Land kann sich die Verschwendung seiner menschlichen Ressourcen leisten"

Es gab Zeiten, da sprachen bedeutsame Politiker anders als sie es heute tun. Franklin D. Roosevelt war bemüht, keine Zweifel über seine Prioritäten aufkommen zu lassen:

To those who say that our expenditures for Public Works and other means for recovery are a waste that we cannot afford, I answer that no country, however rich, can afford the waste of its human resources. Demoralization caused by vast unemployment is our greatest extravagance. Morally, it is the greatest menace to our social order. Some people try to tell me that we must make up our minds that for the future we shall permanently have millions of unemployed just as other countries have had them for over a decade. What may be necessary for those countries is not my responsibility to determine. But as for this country, I stand or fall by my refusal to accept as a necessary condition of our future a permanent army of unemployed. On the contrary, we must make it a national principle that we will not tolerate a large army of unemployed and that we will arrange our national economy to end our present unemployment as soon as we can and then to take wise measures against its return. I do not want to think that it is the destiny of any American to remain permanently on relief rolls…

Quelle: slacktivist

Bernanke fordert Maßnahmen zum Abbau der Arbeitslosigkeit

Federal Reserve Chairman Ben Bernanke said Wednesday that long-term unemployment is an American "national crisis" and suggested that Congress should take further action to combat it. He also said lawmakers should provide more help to the battered housing industry.

Bernanke noted that about 45 percent of the unemployed have been out of work for at least six months.

"This is unheard of," he said in a question-and-answer session after a speech in Cleveland. "This has never happened in the post-war period in the United States. They are losing the skills they had, they are losing their connections, their attachment to the labor force."

Quelle: AP News

Die Fed hat ein Doppelmandat: Es ist gesetzlich verankert, dass sie ein stabiles Preisniveau und eine Maximierung der Beschäftigung anstrebt. Im Gegensatz zu den europäischen Notenbankern, die nur das Preisniveau im Auge haben, liegt es also durchaus im Aufgabenbereich des Ben Bernanke, Maßnahmen zur Bekämpfung der Arbeitslosigkeit zu forcieren. Charles Evans, Präsident der Federal Reserve Bank von Chicago, hatte schon Anfang September gefordert, dass die Geldpolitik sich stärker mit dem Arbeitslosigkeitsproblem auseinandersetzen müsse. Doch die politischen Gräben sind tief: Die Republikaner sind gegen weitere Interventionen der Fed; sie werden auf argumentativer Ebene von Ökonomen wie John Taylor unterstützt, der die Aufhebung des Doppelmandats fordert. Andere Ökonomen, darunter Paul Krugman, fordern hingegen vehement ein, dass die Fed ihre gesetzlich festgeschriebenen Ziele aggressiver verfolgen müsse.

Fehler, die sich wiederholen, wiederholen und wiederholen

Adam Posen ist für eine Ausweitung der fiskal- und geldpolitischen Maßnahmen:

Both the UK and the global economy are facing a familiar foe at present: policy defeatism. Throughout modern economic history, whether in Western Europe in the 1920s, in the US and elsewhere in the 1930s, or in Japan in the 1990s, every major financial crisis-driven downturn has been followed by premature abandonment—if not reversal—of the macroeconomic stimulus policies that are necessary to sustained recovery. Every time, this was due to unduly influential voices claiming some combination of the destructiveness of further policy stimulus, the ineffectiveness of further policy stimulus, or the political corruption from further policy stimulus. Every time those voices were wrong on each and every count. Those voices are being heard again today, much too loudly. It is the duty of economic policymakers including central bankers to rebut these false claims head on. It is even more important that we do the right thing for the economy rather than be slowed, confused, or intimidated by such false claims.