Tema: PPCC-Pisitófilos Creditófagos-Otoño 2022

[Derby]

https://www.scmp.com/economy/economic-indicators/article/3198672/china-trade-export-growth-suffers-first-drop-over-2-years-imports-also-down

China trade: ‘turning point’ as export growth suffers first drop in over 2 years on weak demand, zero-Covid

China’s exports declined by 0.3 per cent in October compared with a year earlier, down from 5.7 per cent growth in September

Imports also declined by 0.7 per cent in October compared with a year earlier, down from 0.3 per cent growth in September

[Derby]

https://www.bloomberg.com/news/articles/2022-11-07/half-of-swedish-households-see-bleak-home-prices-sliding-further

Half of Swedish Households See Home Prices Sliding Further

*SEB house price indicator improved slightly in November to -33
*Nordea now also sees home prices falling 20% from peak

The outlook for Sweden’s housing market remained bleak in November amid this year’s 10% decline in prices from their peak levels, according to the latest data.

House prices in the biggest Nordic country have been forecast to drop as much as 20%, in a sign of what may be to come in other markets where home costs rose sharply during the pandemic. That makes Sweden one of the bellwethers for a global housing cooldown as soaring inflation rips through household budgets and rising borrowing costs begin to bite.(...)

https://www.bloomberg.com/news/articles/2022-11-07/uk-house-prices-fall-most-in-almost-two-years-halifax-says

UK House Prices Fall Most in Almost Two Years, Halifax Says

*Figures confirm drop reported by rival lender Nationwide
*Rising mortgage rates and darker outlook weigh on buyers

UK house prices fell at the sharpest pace in almost two years as rising mortgage rates and a gloomy outlook for the economy depressed demand(...)

[Benzino Napaloni]

Seguimos para bingo.

https://www.elconfidencial.com/espana/2022-11-07/el-pp-plantea-una-ayuda-fiscal-de-750-euros-para-hipotecas-de-rentas-de-hasta-40-000-euros_3519056/

¿Quién paga? El Estado con dinero público. Es decir, todos los que pagamos impuestos.

¿Con qué objetivo? Permitir que se puedan pagar las hipotecas. Es decir, en vez de situar el problema en el precio del ladrillo, se sitúa en la falta de capacidad del pepito para pagar.

Y son estas ratas de alcantarilla quienes hablan de bajar impuestos... Por cosas así no veo ni por asomo al PP como un partido liberal en lo económico. Es un partido pro-ladrillo y pro-pisito.


Para bien o para mal, tampoco tienen poder real de decisión. España no tiene capacidad económica por sí misma para esto, y los que mandan son los que nos dejan los dineros... ¿Nos jugamos algo a que jugarán a perder las próximas elecciones generales cuando vean que no habrá dinerito de fuera para el banano?

[Derby]

Casi nada...

https://www.ft.com/content/e3c4ae5c-3d89-41f2-92c2-09462aa869fd

The Bank of England’s LDI autopsy

Breeden speaks

Sarah Breeden, the Bank of England’s director for financial stability, has had an interesting autumn. Earlier today she gave her first speech since the LDI shambles nearly blew up the UK’s financial system.

The title is timely: Risks from leverage: how did a small corner of the pensions industry threaten financial stability? The whole thing is worth reading for a pretty good explanation of the debacle, albeit one that describes the BoE’s role in a flattering light. We are all the principled heroes of our own stories, after all.

For those that need a refresher, the core problem was “poorly managed leverage”, according to Breeden. What was novel this time was that it cropped up in an obscure corner of the UK pension system, rather than in investment banks or hedge funds:

Many UK DB pension schemes have been in deficit, meaning their liabilities — their commitments to pay out to pensioners in the future — exceed the assets they hold. DB pension schemes invest in long-term bonds to hedge the interest rate and inflation risk that arises from these long-term liabilities. But that doesn’t help them to close their deficit. To do that, they invest in ‘growth assets’, such as equities, to get extra return to grow the value of their assets. An LDI strategy delivers this, using leveraged gilt funds to allow schemes both to maintain material hedges and to invest in growth assets. Of course that leverage needs to be well managed.

The rise in yields in late September — 130 basis points in the 30-year nominal yield in just a few days — caused a significant fall in the net asset value of these leveraged LDI funds, meaning their leverage increased significantly. And that created a need urgently to delever to prevent insolvency and to meet increasing margin calls.

The funds held liquidity buffers for this purpose. But as those liquidity buffers were exhausted, the funds needed either to sell gilts into an illiquid market or to ask their DB pension scheme investors to provide additional cash to rebalance the fund. Since persistently higher interest rates would in fact boost the funding position of DB pension schemes, they generally had the incentive to provide funds. But their resources could take time to mobilise.

To sever the feedback loop between gilt firesales to meet collateral calls and yields shooting higher and triggering a new round of margin calls, the BoE temporarily paused its plans to shrink its balance sheet and bought £19.3bn worth of gilts.

Breeden all but declares victory, estimating that LDI funds have now raised over £40bn, deleveraging “significantly”, and can now “withstand very much larger increases in yields than before, well in excess of the previously unprecedented move in gilt yields”.

One key point: Breeden reckons the flash point was primarily about £200bn worth of pooled LDI schemes — umbrella strategies that combine lots of smaller schemes — despite only making up a small part of the overall £1.4tn LDI industry.

The bigger LDI funds — typically large segregated mandates — contributed to the turmoil through their share size (they account for about 85-90 per cent of the market) but most were able to raise money from their individual pension plan clients.

In contrast, pooled LDI funds struggled, Breeden says:

In these funds, which make up around 10-15% of the LDI market, a pot of assets is managed for a large number of pension fund clients who have limited liability in the face of losses. The speed and scale of the moves in yields far outpaced the ability of the large number of pooled funds’ smaller investors to provide new funds who were typically given a week, in some cases two, to rebalance their positions. Limited liability also meant that these pooled fund investors might choose not to provide support. And so pooled LDI funds became forced sellers of gilts at a rate that would not have been absorbed in normal gilt trading conditions, never mind in the conditions that prevailed during the stressed period.

. . . Indeed the self-reinforcing spiral it led to meant that around £200 billion of pooled LDI funds threatened the £1.4 trillion traded gilt market, which itself acts as the foundation of the UK financial system, underlying around £2 trillion of lending to the real economy through wider credit markets.

Breeden also discusses broader topics including leverage, liquidity mismatches, counterparty risks, investor herding, why financial stability matters and how it can operate through several channels. For anyone who has had to read a GFSR (or even Kindleberger) there isn’t much new here.

But aside from an amusing claim that the UK was ahead of the game in addressing risks from non-bank leverage, the most interesting point Breeden made was that one aspect of the post-financial crisis regulatory architecture might sometimes actually make things worse.

Our emphasis in bold below:

This more widespread collateralisation of derivatives has been an essential part of the package of reforms to address faultlines exposed in the Global Financial Crisis. Initial margin requirements are vital to limit cascading counterparty credit risks . . .

But more widespread collateralisation has increased the sensitivity of liquid-asset demand to market volatility. And, if market participants are not prepared for such calls, their actions to raise cash can squeeze liquidity in already stressed markets, further amplifying shocks.

So whilst greatly reducing counterparty credit risks, with important systemic benefits, collateralisation may also increase systemic liquidity risks.

[Derby]

https://news.yahoo.com/eu-set-water-down-plan-143029821.html

EU Set to Water Down Plan for New Bank Capital Standards

(Bloomberg) -- European Union countries are close to agreeing on a watered-down version of new capital rules for banks after the industry warned that a strict approach would risk choking off the supply of credit to the bloc’s economies.

The most recent draft proposal for implementing Basel III includes several changes to an earlier version from the EU’s executive arm and could be approved Tuesday by finance ministers meeting in Brussels, according to people familiar with the matter.

Banks would dodge an increase in the perceived riskiness of several types of equity exposures, fewer subordinated debt holdings would be moved to a higher risk-weighting and there would be more flexibility for property loans, according to comparison of the earlier proposal with the latest document seen by Bloomberg.

Global regulators spent a decade after the financial crisis coming up with new rules to force banks to boost their capital reserves to avoid a repeat of the 2008 credit crunch and the ensuing bailouts by taxpayers. Yet Europe, where companies rely more on banks for funding than bond or stock markets, has been reluctant to fully implement the standards its regulators agreed to in Basel.

The latest EU plan cites the “utmost importance” of implementing outstanding pieces of regulation, but it also states the need to avoid a “significant increase in overall capital requirements” for Europe’s banking system and take account of “specificities of the EU economy.”

Officials from the European Central Bank and European Banking Authority said last week that they’re “very concerned” that the legislative process for implementing Basel III in the EU has seen pressure to deviate from the standards initially agreed in 2017. The European Commission’s proposal last year already included departures from the original standards, they said.

[Derby]

Otro indicador...

https://twitter.com/LizAnnSonders/status/1589589016449630209

Used car prices continue to crash per ⁦@Manheim_US Index … year/year change came in at -10.4% in October, worst since December 2008

[Derby]

https://twitter.com/JeffWeniger/status/1589340592118587397

The population vs home construction dynamics have changed.

[Juan]

Sé que PPCC hablaron de los findes de pensiones británicos, y ahora leo esto de Derby y no entiendo nada. ¿Puede por favor alguien amable explicármelo con marionetas?

[sudden and sharp]

‘I’d never seen anything like it’: how market turmoil sparked a pension fund selloff
https://www.theguardian.com/business/2022/sep/29/id-never-seen-anything-like-it-how-market-turmoil-sparked-a-pension-fund-selloff

[Derby]

https://www.bloomberg.com/news/articles/2022-11-07/redfin-sinks-as-oppenheimer-downgrades-on-flawed-model

Redfin Sinks After Real Estate Company Is Downgraded Over ‘Flawed’ Model

*The real estate company has plunged about 90% so far this year
*Peers Compass, Opendoor also decline to start the week



Redfin Corp. sinks to a fresh record low after an Oppenheimer analyst downgraded the stock and said the real estate company’s model is “fundamentally flawed.”

Shares plunge as much as 18% on Monday to $3.32, as Oppenheimer’s Jason Helfstein cut his recommendation to underperform from a hold-equivalent rating. He sees room for further pain, slashing his price target to a Street-low $1.30.

“We believe that Redfin’s business is fundamentally flawed, as the company continues to use a fixed-cost model for agents,” the analyst writes. “This prevents the company from optimizing margins when the housing markets decline and limits share gains when markets rebound.”

Redfin said that any comments the company can share about its stock price move will be addressed on its earnings conference call on Wednesday after it releases results.

Redfin has plunged more than 90% so far this year, as real estate technology firms have been slammed amid the housing market’s slowdown from rising mortgage rates.

Last week, Opendoor Technologies Inc. said it would lay-off about 18% of its headcount. The week before, Zillow Group Inc. cut about 5% of employees. Opendoor is falling as much as 13% on Monday, and Compass Inc. slides as much as 8.9%.

[Cadavre Exquis]

Facebook Parent Meta Is Preparing To Notify Employees of Large-Scale Layoffs This Week
Posted by msmash on Monday November 07, 2022 @09:40AM from the shape-of-things-to-come dept.

Meta is planning to begin large-scale layoffs this week, WSJ reported over the weekend, citing people familiar with the matter, in what could be the largest round in a recent spate of tech job cuts after the industry's rapid growth during the pandemic. From the report:

The layoffs are expected to affect many thousands of employees and an announcement is planned to come as soon as Wednesday, according to the people. Meta reported more than 87,000 employees at the end of September. Company officials already told employees to cancel nonessential travel beginning this week, the people said.

The planned layoffs would be the first broad head-count reductions to occur in the company's 18-year history. While smaller on a percentage basis than the cuts at Twitter Inc. this past week, which hit about half of that company's staff, the number of Meta employees expected to lose their jobs could be the largest to date at a major technology corporation in a year that has seen a tech-industry retrenchment.

Saludos.

[Mistermaguf]

Es criminal...

https://www.huffingtonpost.es/entry/gonzalo-bernardos-da-esta-solucion-para-hacer-frente-al-aumento-del-precio-de-las-hipotecas_es_63676de5e4b0eb51ab10e7cb

Gonzalo Bernardos da esta solución para hacer frente al aumento del precio de las hipotecas

"Es muy sencillo".

(...) Semanas después de que el economista protagonizara un tenso debate con Yolanda, una de las mujeres que habían asistido al programa para denunciar que ahora pagaba más de 300 euros al mes, de golpe, ha hablado de ella y ha destacado algo importante.

“Le dije a Yolanda que encontraría una solución y la he encontrado. Es muy sencillo. Pero esto tendría que ser el Ministerio de Economía el que se lo impusiera a los bancos, porque sino no serán muy partícipes de esto”, ha señalado.

Gonzalo Bernardos ha detallado que la idea es “convertir la hipoteca que tiene Yolanda en fija” aunque “el tipo de interés sea variable”. “Entonces, usted paga lo que seguía pagando, pero lo que se ajusta es el número de años que seguirá pagando”, ha señalado a otra mujer durante el programa.

“Es decir, si los tipos de interés están por encima del que usted contrató la hipoteca, el número de años le incrementará. Si el tipo de interés está por debajo, el número de años se acortará. Pero como mínimo tiene una tranquilidad, que siempre pagará lo mismo”, ha defendido.

El economista ha justificado que es un modelo “muy sencillo”. “Aunque varíe el tipo de interés y la hipoteca sea variable, tu cuota no varía”, ha sentenciado.

Nuestro bufón de cabecera, el ínclito Bernardos, descubriendo la pólvora.

Cuando leí su propuesta de vanguardia, inmediatamente me acordé de un hilo mítico de burbuja.info, (del 2006!, que viejos que estamos) de un personaje entrañable llamado Fajardo, es éste: https://www.burbuja.info/inmobiliaria/threads/pues-con-mi-hipoteca-cuota-blindada-me-suda-la-pijota-el-euribor.17754/

Por si no se acuerdan, la CAM (qué epocas aquellas, qué nostalgia) ya había tenido la misma idea genial, la "hipoteca blindada". Relájense y diviértanse, que nos hará cada vez más falta.

[Derby]

Contraction is coming...

https://www.bnnbloomberg.ca/eu-s-gentiloni-says-contraction-is-coming-in-winter-months-1.1842802

EU’s Gentiloni Says ‘Contraction Is Coming’ in Winter Months

(Bloomberg) -- The European Union’s economy is set to shrink in coming months as it struggles with the energy crisis and high inflation, the bloc’s Economy Commissioner Paolo Gentiloni warned Monday.

He was speaking ahead of a gathering of euro-zone finance ministers in Brussels and a few days before he presents the European Commission’s autumn forecasts Friday.

“We had a still positive quarter, which was not obvious and positive news,” Gentiloni told reporters. “But of course we also know that the economy is slowing down and a contraction is coming at least for the winter months.”

Asked about the coming update to the bloc’s economic forecasts, Commission Executive Vice President Valdis Dombrovskis told journalists that it would “indicate further weakening of the economy” and confirm the high level of inflation.

He expects inflation to continue to slow, however, as energy prices have peaked and targeted measures are being taken to lower them, while the European Central Bank is raising interest rates.

[Benzino Napaloni]

Sé que PPCC hablaron de los findes de pensiones británicos, y ahora leo esto de Derby y no entiendo nada. ¿Puede por favor alguien amable explicármelo con marionetas?

Bueno, a nivel de marionetas yo diría que de donde no hay no se puede sacar. Derby desarrolla la forma concreta de cómo empieza el desmorone, como que en EEUU la cohorte de jóvenes ya está por debajo de las nuevas viviendas construidas. Lo mismo con las pensiones en Gran Bretaña.

Pero al final todo viene de los 80 y de las nefastas decisiones que tomaron Reagan y Tatcher. En vez de asumir que no se podía seguir viviendo así, se fabricó una fantasía que al final sólo se sustentaba en la autofagia y vivir de lo ahorrado. Algo que ahora nos está estallando en la cara, y especialmente me refiero al invierno demográfico.

Últimamente seguro que han leído noticias de que faltan hasta carpinteros. Carpinteros, maquinistas de tren, y cada vez más cosas. Pues esa falta de personal repercute tanto en el trabajo en sí como en los impuestos que se pagan. ¿Recuerdan los 2000, cuando se decía que si no venían inmigrantes no podríamos pagar las pensiones? Reconozco que yo mismo compré ese discurso hasta que me desengañé a las puertas del crack. Pues ya no se pueden pagar las pensiones, y los inmigrantes con suerte han retrasado lo inevitable.

Si tienes más gastos que ingresos, y lo haces de forma sostenida en el tiempo, tarde o temprano te quedas sin ahorros. No es tan importante saber por dónde romperá, porque por algún sitio va a ser seguro.


El factor trabajo va a ser primordial, y el señor Musk ya nos ha dado un buen ejemplo de lo que viene, lo comenté ayer en el hilo del fin del trabajo. El lumbreras ha ido a lo bestia, y se ha dado cuenta tarde de que por error o por un mal cálculo ha acabado despidiendo algunos perfiles que le hacían mucha falta. Pues esto tampoco es nuevo, ya lo hizo la banca en la crisis de hace quince años. Despidos a mansalva, y luego a recuperar casi suplicando a los que sabían gestionar impagos. Echar al caro y esperar que el barato te siga haciendo el trabajo es un error tremendo. Del caro no hay que mirar lo que cuesta, ni cuánto tiempo lleva ahí. Hay que mirar si es rentable y su experiencia es valiosa. He vivido demasiados casos de empresas que se han ido al carajo de esta manera, nunca remontaron el vuelo tras los despidos.

[sudden and sharp]

Viene el día prometedor...