PPCC-Pisitófilos Creditófagos-Verano 2022

[Cadavre Exquis]

https://twitter.com/sninobecerra/status/1564509054877171713

Saludos.

[AbiertoPorDemolicion]

Tiene pinta de que lo van a incluir en el paquete de medidas que prepara la CE para "intervenir el mercado del gas"... y que lo pagaran fondos europeos (o sea, alemanes).

Por cierto que se habla poco de los problemones que tiene Francia con sus nucleares. Casi la mitad están paradas por problemas de corrosion...

Que la realidad no te estropee una bonita narrativa....

España se queda sola en su cruzada contra la energía nuclear
https://www.larazon.es/economia/20220827/jzm6gkj4mjdvrlpuxgqbgmjzka.html

España, único país de la UE que no se plantea ampliar la vida de las centrales nucleares

https://www.vozpopuli.com/economia_y_finanzas/energia/espana-unico-pais-ue-no-plantea-ampliar-vida-centrales-nucleares.html

[Derby]

https://www.zerohedge.com/markets/will-housing-downturn-be-worse-2008

Will This Housing Downturn Be Worse Than 2008?

This is a map of home price growth at the housing bubble's peak in 2005.



And this is a map of home price growth at the peak of the housing bubble in 2021.



See the difference?

When we look at home price growth at the peak of the last bubble in 2005, what we see is that home price growth was very concentrated in certain states and cities. Arizona, Nevada, California and Florida saw annual home price growth above 20%.

National home price growth averaged about 11% at the peak in 2005.

Today, national home price growth is higher than at the peak of the last housing bubble at almost 14% and when we look at the previous maps, we can see the price appreciation is much more broad based. The biggest bubble in 2005, which was Arizona, was crazier than the biggest bubble today, which is Idaho but today there are 38 states with annual home price growth over 10%. At the peak in 2005, only 26 states had annual home price growth above 10%.



So will a housing crash today be worse than 2008 given how much more pervasive the rampant home price growth has been? For that we'll have to look at the leading indicators of home price growth, debt levels, and Federal Reserve policy.

There are several key leading indicators of real home price growth that I noted in my most recent post on home prices.

We discussed the months supply of newly constructed homes, the mortgage spread or mortgage rates, and the growth rate of real M2.

The months supply metric shows how many months it will take to clear the current pool of inventory at the current pace of sales. Months supply has exploded to 10.9 which means it will take almost 11 months to get rid of all the inventory of new homes in the pipeline at the current rate of sales. The months supply of newly constructed homes is a leading indicator of home price growth. Higher months supply today means lower home prices to follow.

We're more concerned about the inventory of new homes compared to existing homes because all the economic activity and jobs are attached to new construction rather than existing homes.



In 2008, the months supply figure exploded to 12.2 so it's not quite as bad yet, although it could get there.

The pace of sales volume is completely collapsing today and there's no signs of a slowdown in the pace of decline. The volume of new home sales is down 51% since August 2020. In 2008 and into 2009, new home sales fell by 70% so it's not quite as bad yet, but we haven't hit bottom yet.



In terms of mortgage rates, we have a problem today that is WORSE than 2008. In 2006, mortgage rates jumped 1.3% on a year over year basis. So in 2006, when the housing bubble started to pop mortgage rates were 6.8% compared to 5.5% a year earlier. This spike in mortgage rates kills home prices because people just can't afford rising home prices and rising mortgage rates.



While mortgage rates today are 5.6%, lower than in 2006, the spike or the pace of increase is much worse. Mortgage rates today are more than 2.7% higher than just one year ago!

So the pace of increase in mortgage rates is double the pace of the 2006 period that caused that housing bubble to pop. That's an ominous sign that will cause buyer demand to stop dead in it's tracks…something we are already starting to witness with new home sales crashing 51%.

The next metric to consider is the rate of liquidity growth or money growth.

In the lead up to the peak in the housing bubble in 2006, liquidity growth was NOT excessive. The bubble in 2006 and the crash in 2008 was more about a debt crisis and cheap credit.



Money growth in 2020 and 2021 was more than six times as high as it was in the mid 2000s which is why the housing bubble this time is more broad based rather than concentrated in select cities like it was in 2005 and 2006. Todays' bubble is more about record liquidity growth that was channeled into financial assets.

And when big institutions started to access the single family home market, housing became just another financial asset that was an easy recipient of this excess liquidity that historically stayed trapped in the stock market. This is a major difference to the 2008 bubble. The banks helped to facilitate a housing bubble by granting loans to households, but most of the housing activity was in the household sector itself.

Today, we have financial innovation in which big institutions and private equity funds that can easily access the Fed's new liquidity have moved into single family homes. We don't know what a housing downturn will look like now that bigger players are involved. These are speculators vs. home owners.

Money growth never contracted or slowed below 0% when the 2006 housing bubble popped, not until mid 2008. Today, money growth is falling sharply as the Federal Reserve pulls liquidity out of the system to correct an ongoing inflation problem.

So just as easily as home prices went up because of liquidity, we may see the reverse.

So the inventory issue is not quite as bad as 2008 which is a good thing but the spike in mortgage rates is way worse and the contraction in liquidity growth is more intense.

The debt bubble was worse in 2008 because the debt was concentrated in the banking sector and the household sector in the form of mortgages. Together, the household and financial sector had almost 220% debt to GDP compared to 150% today. So the 2008 crisis started as a housing problem but it morphed into a banking crisis.



Today, we have a housing problem that by most metrics is on pace to be worse than 2008 but we don't have the private sector debt toxicity to turn the housing downturn into a banking meltdown.

Today we have a bigger debt problem in the Federal Government and the household debt is concentrated in what we call consumer debt, mainly student loans and auto loans, not so much mortgage debt.



Today we have a much broader bubble than we did in the peak of 2005 and 2006. The month's supply of new homes is surging towards 2007-2008 levels but it's not there yet. Mortgage rates are spiking way faster so the affordability crisis is worse, particularly when you add on food inflation, rent inflation and gas inflation. Also the rate of liquidity contraction is more intense to correct a big mistake the Fed made in 2020 and 2021.

The 2022 housing crash certainly has the potential to be worse than 2008 if we're talking about the housing market itself. There's much less of a chance that this housing downturn morphs into a global banking crisis. The nonfinancial shadow banking sector? That's a story for another day…

This video explains the impending troubles headed for the housing market. 

https://www.youtube.com/watch?v=vLnX7GsoVDE&t=1s

[Cadavre Exquis]

Reforma estructural del mercado eléctrico



https://www.expansion.com/empresas/energia/2022/08/29/630cbf31e5fdea7c1f8b45b7.html

Saludos.

[Cadavre Exquis]

https://www.expansion.com/mercados/2022/08/29/630d0ddee5fdead7128b4596.html

Saludos.

[Cadavre Exquis]

https://www.expansion.com/economia/financial-times/2022/08/29/630ca9b2e5fdeab23b8b460e.html

Saludos.

[Cadavre Exquis]

https://twitter.com/sninobecerra/status/1564558391342759936

https://www.expansion.com/economia/2022/08/30/630d0afce5fdea84478b45ab.html

Saludos.

[Cadavre Exquis]

https://twitter.com/sninobecerra/status/1564561414995460097

https://www.expansion.com/economia/financial-times/2022/08/29/630cd6e9468aeb737d8b464a.html

Saludos.

[Derby]

https://www.reuters.com/markets/europe/fed-officials-see-us-interest-rates-rising-further-2022-08-30/

Fed officials see U.S. interest rates rising further

Aug 30 (Reuters) - U.S. Federal Reserve officials on Tuesday reiterated their support for further interest-rate hikes to quell inflation, with the influential chief of the New York Fed saying the central bank will likely need to get its policy rate "somewhat above" 3.5% and keep it there through the end of 2023.

"I see us needing to kind of hold a policy stance - pushing inflation down, bringing demand and supply into alignment - it's going to take longer, will continue through next year," New York Fed chief John Williams told the Wall Street Journal. "Based on what I'm seeing in the inflation data, and what I'm seeing in the economy, it's going to take some time before I would expect to see adjustments of rates downward."(...)

[Cadavre Exquis]

https://twitter.com/OperadorNuclear/status/1563460059447062528

https://twitter.com/amturiel/status/1564696816448409601

Saludos.

[Derby]

https://www.marketwatch.com/amp/story/economist-predicts-a-whopper-of-recession-in-2023-and-thats-not-necessarily-due-to-higher-interest-rates-11661888255

Economist predicts a ‘whopper’ of recession in 2023 — and that’s not necessarily due to higher interest rates

Inflation will remain high through 2024 because of ‘unprecedented growth’ in money supply since the pandemic, says economist Steve Hanke

Financial markets investors worry the U.S. is on the brink of an economic downturn as central bankers in Jackson Hole reaffirmed their determination to raise interest rates to bring inflation under control.

Steve Hanke, a professor of applied economics at Johns Hopkins University, said that he believes the U.S. is heading for a “whopper” of a recession next year, but it’s not necessarily because of higher benchmark interest rates.

“We will have a recession because we’ve had five months of zero M2 growth–money supply growth, and the Fed isn’t even looking at it,” Hanke said in an interview with CNBC on Monday. “We’re going to have one whopper of a recession in 2023.”(...)

[Derby]

https://calculatedrisk.substack.com/p/case-shiller-national-house-price

Case-Shiller National House Price Index "Decelerated" to 18.0% year-over-year increase in June

FHFA: "[A] deceleration has appeared in the June monthly data”

Both the Case-Shiller House Price Index (HPI) and the Federal Housing Finance Agency (FHFA) HPI for June were released today. Here is a graph of the month-over-month (MoM) change in the Case-Shiller National Index Seasonally Adjusted (SA).

The Case-Shiller Home Price Indices for “June” is a 3-month average of April, May and June closing prices. June closing prices include some contracts signed in February, so there is a significant lag to this data.



The MoM increase in Case-Shiller was at 0.33%. This was the smallest MoM increase since June 2020, and since this includes closings in April and May, this suggests price growth stalled in June.

On a seasonally adjusted basis, prices declined in 7 of the 20 Case-Shiller cities: Seattle, San Francisco, San Diego, Portland, Los Angeles, Denver and Washington, DC all saw price declines in the June report.

[Derby]

https://www.ft.com/content/c01ca80a-afca-493a-b09a-66dcd30a5767

Frustrated Evergrande bondholders push own plan for debt restructuring

Foreign creditors say chair Hui Ka Yan should repay some of $20bn liabilities from his fortune

Global funds that invested in Evergrande’s bonds have come up with their own debt restructuring plan for the cash-strapped property developer and demanded that its chair repay liabilities with his own fortune, according to two people familiar with the matter.

Frustrated bondholders submitted a proposal that laid out a framework to restructure Evergrande’s $20bn of offshore debts in recent days after the company missed a self-imposed deadline in July to present a plan to meet its colossal liabilities, the people said.

The struggling real estate developer, which has $300bn of total liabilities and was the most prominent default last year in a liquidity crisis that shook the Chinese property sector, had told creditors it was on track to meet the July deadline. It urged patience amid threats of legal action.

The foreign creditors, who are being advised by law firm Kirkland & Ellis and investment bank Moelis & Co, also proposed that Evergrande chair Hui Ka Yan buy new shares issued by the company and use the capital to repay part of its offshore debts, one of the people said.

The sum that investors have requested is not known but a second person familiar with some bondholders’ thinking said it made sense to request that the chair “who has sucked a load of money out of the business . . . put some back in”.

The plans, which were submitted in a PowerPoint presentation, have been dubbed a “straw man proposal” by people close to the bondholders and the company, meaning it was intended to draw a more constructive response from Evergrande.

The proposal laid out a framework by which a broader restructuring of Evergrande’s offshore debts could work, including foreign bondholders’ “expectations and boundaries”, one of the people said.

Investors including BlackRock, UBS, Ashmore and funds controlled by HSBC were large owners of Evergrande bonds when it spiralled towards defaulting on its offshore debt late last year, but many have since reduced or sold off their holdings. Based on filing dates in June or later, international investors in Evergrande’s dollar-denominated bonds included BlackRock, Ashmore, Prudential and BNP Paribas.

The Financial Times reported this month that investors have priced in $130bn of losses on Chinese property developers’ dollar debt on mounting worries that the country’s housing market will face a protracted crisis unless Beijing steps in with a large-scale bailout.

The enhanced pressure on Evergrande by its creditors comes as the developer faces growing political scrutiny in mainland China over its stalled projects. The company, one of China’s biggest homebuilders, has also been hit by a wave of Chinese buyers protesting over unfinished homes by boycotting mortgage payments.

One of the people close to the matter, who is familiar with internal discussions at Evergrande, said the company was unlikely to agree to the creditors’ demands because of the need to prioritise completing its residential projects in China.

Evergrande is also facing a court hearing on Wednesday in Hong Kong after an investor in its online real estate and automobile marketplace, Fangchebao, filed a winding-up petition against the developer. Top Shine filed the petition in June to liquidate Evergrande over a financial obligation of HK$863mn (US$110mn). Evergrande said previously it would “vigorously” defend the court action.

In an announcement to investors in July, Evergrande outlined the potential use of equity in the company’s offshore subsidiaries, including a property services business and electric vehicles unit, as one way to address repayments to bondholders. Other details about its plan to restructure its $300bn liabilities have been limited.

Evergrande also previously mooted a draft plan that would rely on staggered payments and debt-to-equity swaps, but it had not materialised into a formal proposal because of a lack of approval from its biggest creditors.

Evergrande did not immediately reply to a request for comment. Advisers to the international bondholders declined to comment.

[Cadavre Exquis]

https://www.eleconomista.es/opinion/noticias/11924215/08/22/La-elevada-inflacion-se-enquista.html

https://www.eleconomista.es/economia/noticias/11923129/08/22/Tregua-del-IPC-en-agosto-la-inflacion-cae-al-104-en-su-primer-descenso-desde-abril.html

Saludos.

[Cadavre Exquis]

https://www.eleconomista.es/banca-finanzas/noticias/11924148/08/22/El-credito-a-las-empresas-se-encarece-hasta-un-22-en-el-ano-por-el-euribor.html

Saludos.