Empiric Student Property Share Discussion Threads

[briarberry] 11/3/2009 13:00

bailout/stimulus bubble update...


The U.S. Congress gave final approval to a $410 billion bill that will boost domestic spending



March 11 (Bloomberg) -- China's urban fixed-asset investment surged 26.5 percent in the first two months of the year as the nation poured money into roads, railways and energy pipelines.


China


The Bank of England is to spend the first £2bn of its £75bn quantitative easing scheme, designed to boost bank lending.

[briarberry] 11/3/2009 12:48

Feds, Brits Probe AIG's London Office on $500B Losses

Ground zero for AIG's spectacular implosion, which has soaked up more federal bailout money than any other entity, appears to have been a small London branch office that may have lost nearly half a trillion dollars in bad deals.

The disastrous deals were built up in a decade and, when the crisis hit, the man who ran the unit for the last eight years retired after making $280 million for himself and leaving with a $1 million-a-month consulting contract.



(jail not bail)

[briarberry] 10/3/2009 12:57

March 10 (Bloomberg) -- Treasuries fell on speculation the sale of $63 billion of securities this week will deter investors and as rising stocks reduced demand for the safest assets.

The losses pushed the three-year yield to the highest level since Feb. 27 before the Treasury Department sells a record $34 billion of the notes today. It will also auction $18 billion of 10-year debt tomorrow and $11 billion of 30-year bonds on March 12. Billionaire Warren Buffett said government efforts to spur growth may lead to inflation.

[briarberry] 06/3/2009 09:36

Argentina Collapse in 2001

Argentina's Economic Collapse - Part 1 of 12

Argentina's Economic Collapse - Part 2 of 12

Argentina's Economic Collapse - Part 3 of 12

[briarberry] 05/3/2009 15:39

Bailout bubble still growing

The Bank of England comes to grips with prospects for a deflationary spiral, cutting its key lending rate nearly to zero and launching an unprecedented program to effectively print money by buying 75 billion pounds ($106 billion) of commercial paper and government bonds over the next three months.


Up to £1.5 trillion of new money (I guess most of you have noted this fact already)

If all that £150bn is given to the banks and it's all lent out by the banks. Then, with a 10% reserve it would be worth £1.5 trillion to the banks


While the Bank will initially add £75bn, Chancellor Alistair Darling has given it permission to extend this to up to £150bn.


Why didn't Japan suffer from price inflation due to their monetary inflation???

[briarberry] 03/3/2009 18:40

Toyota U.S. down 40% to 109,583 units in February
Ford reports a 48.2% drop in February U.S. vehicle sales
GM U.S. February sales down 53% to 126,170 units
Honda February U.S. sales fall 38% to 71,575 units

(consumption is 75% of US GDP)

[briarberry] 03/3/2009 16:15

Pending Home Sales Jan -7.7%

[briarberry] 03/3/2009 14:14

Euro, Finacial situation in Europe could get a lot worse ???


European banks have taken on much more leverage than their American colleagues. + European banks have been much slower than US banks in terms of recognising their losses. Write-offs now total about $750 billion in the US and only about $325 billion in Europe.

Citibank has calculated that it would only take a cumulative increase in bad debts of 3.8% in 2009-10 to take the core equity tier 1 ratio of the European banking industry down to the bare minimum of 4.5%

Nowhere has the credit boom been more pronounced than in Eastern Europe. And nowhere is the pain felt more now that credit has all but dried up.

The problems in Eastern Europe begin and end with their large external debts. In recent years, ordinary people all over the region have converted their traditional mortgages to EUR- or CHF-denominated mortgages. Some have even switched to JPY mortgages. Who can possibly resist 3% mortgages? Didn't anyone inform them of the risk? As currencies across the region have fallen out of bed in recent months, these mortgages have suddenly become 30-50% more expensive. No wonder the local economy is suddenly tanking.

Credit Suisse has calculated that net foreign liabilities (as a % of GDP) have risen from 47% to 65% in recent months as a direct result of the loss of local currency values

Austrian banks alone have lent about $300 billion to the region, equivalent to 68% of its GDP according to the Financial Times. A default rate of 10% on its Eastern European loans is considered enough to wipe out the entire Austrian banking system. EBRD has gone on record stating that defaults in Eastern Europe could end up as high as 20%

Hungary, Latvia and Ukraine have already received emergency loans from the IMF and both Serbia and Romania are reportedly considering asking for help. Meanwhile the IMF's coffers are draining quickly and it has asked leading industrial nations for new funding. At their summit a week ago, EU leaders coughed up an extra $250 billion but nobody said where the money is going to come from. Even if they find the money, it is likely to prove hopelessly inadequate.

Government borrowing. The official estimate for the UK for next year is already approaching 10% of GDP, an estimate which will almost certainly rise further. We probably have to get used to running 10-15% deficits for a few years, a fact which seriously undermines the notion of government bonds being next to risk-free.

[briarberry] 02/3/2009 23:27

The Housing Chart That's Worth 1000 Words

chart =

[briarberry] 02/3/2009 15:51

AIG reported a fourth-quarter loss topping $61 billion. (lost $61 billion in 3 months!)

For the year, A.I.G. lost $99.3 billion

[briarberry] 26/2/2009 22:18

Feb. 26 (Bloomberg) -- Treasuries fell for a third day as the government sold $22 billion of seven-year notes in the last of three auctions this week as it issues an unprecedented amount of debt to spur the U.S. economy.

Declines were led by 10- and 30-year securities. The administration forecasts a budget deficit of $1.75 trillion in the fiscal year ending Sept. 30. That's 23% higher than a forecast by economists at primary dealer Goldman Sachs Group Inc., and equivalent to about 12 percent of the nation's gross domestic product.

[briarberry] 24/2/2009 14:00

Feb. 24 (Bloomberg) -- Taiwan's export orders dropped by a record in January, threatening to stoke unemployment and deepen the island's recession.

Orders fell 41.67 percent from a year earlier after December's 33 percent plunge, the Ministry of Economic Affairs said in a statement on its Web site today. That was a steeper decline than the 38 percent median estimate in a Bloomberg News survey of nine economists.

The global recession is pummeling exports across Asia, with South Korea's overseas shipments plunging by a record in January and Singapore's falling by the most in at least 22 years. Taiwan's central bank cut interest rates to a record low last week and may make further reductions after the economy shrank in the fourth quarter by the most since at least 1952.

[briarberry] 23/2/2009 00:37

2008 Q4 earnings reporting nearly finished, with earnings down 42.1% (I guess non-GAPP). Also 2009 Q1 ratio of negative to positive company forecasts jumping to 5.9 to 1


Overall earnings are now expected to have fallen 42.1% for the fourth quarter, according to Thomson Financial. This would mark the worst earnings growth rate since Thomson began tracking earnings 10 years ago.

The first quarter is looking increasingly grim, with the ratio of negative to positive company forecasts jumping to 5.9 to 1, compared with a usual ratio of 2 to 1 historically.

Whereas health care, consumer staples and the utilities sectors had still posted slight earnings growth in the fourth quarter, all 10 sectors of the S&P are now expected to see their earnings fall in the first quarter, according to Thomson.

Next week, another 51 S&P 500 companies will report results, including Dow component Home Depot (HD) on Thursday.

[briarberry] 21/2/2009 22:37

Switzerland threatened with bankruptcy

Swiss banks have given billions of credit to Eastern Europe - now the customers cannot pay back the money. Switzerland is threatened with the fate of Iceland, says economist Arthur P. Schmidt.

In countries such as Poland, Hungary and Croatia, the Swiss franc has become an important currency. Thousands of households and small firms took out loans in Swiss francs, and not in the national currency zloty, forint, or kuna because of lower interest rates. In Hungary, 31 percent of all loans are in Swiss currency. Amongst household loans, they are almost 60 percent.


update

[briarberry] 19/2/2009 21:47

Bailout bubble...


Russia need 3 trillion rubles ???

Russia need Three trillion rubles to cover the budget deficit. The suggestion is that the central bank could print it




Europe needs £16 trillion ???



European Commission officials have estimated that impaired assets may amount to 44pc of EU bank balance sheets. The Commission estimates that so-called financial instruments in the trading book total £12.3 trillion (13.7 trillion euros), equivalent to about 33pc of EU bank balance sheets.

In addition, so-called 'available for sale instruments' worth £4trillion (4.5 trillion euros), or 11pc of balance sheets, are also added by the Commission to arrive at the headline figure of £16.3 trillion.

[briarberry] 18/2/2009 14:27

Simon Johnson was Economic Counsellor and Director of the Research Department at the IMF from March 2007-August 2008. This is part 1 of his interview with Bill Moyers on Feb 12 2009.





(jail not bail)

[briarberry] 17/2/2009 17:27

Russian stock market was suspended

Polish main index, WIG down over 6% and WIG20 down over 7%

[briarberry] 17/2/2009 15:24

20-percent decline in GDP in Ukraine compared with January 2008. (partly due to Russia cutting gas supplies)

[briarberry] 17/2/2009 14:44

Feb. 17 (Bloomberg) -- Singapore's exports fell the most in at least 22 years in January as the deepening global recession pared demand for electronics and other goods in all of the island's 10 largest markets.

Non-oil domestic exports dropped 34.8 percent from a year earlier, after contracting 20.8 percent in December.

[briarberry] 16/2/2009 22:23

Four U.S. Banks Seized, Bringing Total for Year to 13 (Update1)

By Margaret Chadbourn

Feb. 13 (Bloomberg) -- Banks in Florida, Illinois, Nebraska and Oregon were shut by state regulators, boosting the toll of failed institutions to 13, as a worsening economy and slumping housing market pushes home foreclosures to records.

[briarberry] 16/2/2009 21:54

The S&P would have to drop to 554 just to be overvalued based on 2008 Q4 earnings projections


Earnings Are Crashing
by Carl Swenlin
February 13, 2009

The real P/E for the S&P 500 is based on "as reported" or GAAP earnings (calculated using Generally Accepted Accounting Principals), and it is the standard for historical earnings comparisons. The normal range for the GAAP P/E ratio is between 10 (undervalued) to 20 (overvalued).

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Note that projected earnings for 2009 Q2 are $15.90. Keep in mind that the last earnings peak of $84.92 was for 2007 Q3. That's a drop of over 80%!

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Note that the S&P would have to drop to 554 just to be overvalued based on 2008 Q4 earnings projections.

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Of course, the market doesn't always follow these projections, but they are reasonable targets based upon the best fundamental estimates we have available.

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Market fundamentals are abysmal. The current estimated quarterly earnings for the S&P for 2008 Q4 is -$10.44. The S&P has never in history reported negative earnings for a quarter.