18:39
The U.S. banking system is it on the brink of bankruptcy?
Yes, says economist Nouriel Roubini. In a study published on Thursday that the media have dubbed "Dr. Disaster" ensures that U.S. banks will lose more than one trillion dollars. He argues for it to be recapitalized again.
The cost of the crisis for banks in the world could amount to 3,600 billion dollars by accumulating losses and writedowns, according to a study released Thursday by the economist Nouriel Roubini.
For Nouriel Roubini, one of the first to have predicted the collapse of the financial system, the losses would be well above what the banks have so far recognized (1,000 billion dollars).
Nicknamed Dr. disaster for his pessimism, Nouriel Roubini, who predicted in 2006 the housing market crisis and its collapse, said the U.S. banking system is "on the verge of insolvency."
In a study published with the analyst Elisa Parisi-Capone on his blog, RGE Monitor, Nouriel Roubini, professor at New York University, estimates that global banks will lose a total of 1,600 billion dollars over 12,370 billion loan unsecured. Of this total, banks and brokerage firms lose U.S. alone of $ 1,100 billion.
Banks will also have to address impairments of $ 2,000 billion in financial assets now estimated at 10,840 billion, say the two economists. For the U.S. banking system, the effort required would be 600 to 700 billion dollars.
In total, U.S. banks alone bear half the overall cost of the crisis of 3.600 billion dollars, says Nouriel Roubini.
Given that the total assets of U.S. banks is 1,840 billion recapitalization after they have received state, the banking system of the United States "is on the verge of insolvency if our estimates of losses are realized "write the two economists.
They argue therefore that U.S. banks are recapitalized again from 1000 to 1400 billion, by public or private capital.
The cost of the crisis for banks in the world could amount to 3,600 billion dollars by accumulating losses and writedowns, according to a study released Thursday by the economist Nouriel Roubini.
For Nouriel Roubini, one of the first to have predicted the collapse of the financial system, the losses would be well above what the banks have so far recognized (1,000 billion dollars).
Nicknamed Dr. disaster for his pessimism, Nouriel Roubini, who predicted in 2006 the housing market crisis and its collapse, said the U.S. banking system is "on the verge of insolvency."
In a study published with the analyst Elisa Parisi-Capone on his blog, RGE Monitor, Nouriel Roubini, professor at New York University, estimates that global banks will lose a total of 1,600 billion dollars over 12,370 billion loan unsecured. Of this total, banks and brokerage firms lose U.S. alone of $ 1,100 billion.
Banks will also have to address impairments of $ 2,000 billion in financial assets now estimated at 10,840 billion, say the two economists. For the U.S. banking system, the effort required would be 600 to 700 billion dollars.
In total, U.S. banks alone bear half the overall cost of the crisis of 3.600 billion dollars, says Nouriel Roubini.
Given that the total assets of U.S. banks is 1,840 billion recapitalization after they have received state, the banking system of the United States "is on the verge of insolvency if our estimates of losses are realized "write the two economists.
They argue therefore that U.S. banks are recapitalized again from 1000 to 1400 billion, by public or private capital.
source : lexpress.fr
18:28
The U.S. banking system has no chance to survive
The accounting reality shows ...
Here's an update on the status of the U.S. financial crisis.
According to several studies published recently in the United States, the capitalization of banks varies between 1 500 and 2 000 billion.
In front, the outstanding mortgage securities is about 11 000 billion. The exposure of U.S. banks on these securities is around 50%, or 5,500 billion.
The U.S. real estate fell by 10-12%, or a hole in accounting from 1 100 to 1 400 billion, thus pretty much the entire share capital of U.S. banks, not to mention the other market segments credit, student loan type, consumer loan, car loan, and above all business loans ...
Already at this stage, that's about all U.S. bank which is virtually insolvent.
But what do we know U.S. housing? It is disconnected in many countries around the world purchasing power. Given the financial situation in the country, with millions of foreclosures resulting in an oversupply of houses and apartments, we can reasonably estimate that the downward correction will continue with a first target located between -20 and -30 % within a year or two. Indeed, once the value of the mortgage exceeds that of a well, Americans are advised to declare bankruptcy. Only a bull market in real estate could calm the game Is this credible at this stage?
Prove a moderately pessimistic scenario with a fall of 25%. This is a hole of 2 500 to 3 000 billion. Just make these additions to understand that American finance is damn! She can not pay the abyss. The dollar also could not resist.
Here's an update on the status of the U.S. financial crisis.
According to several studies published recently in the United States, the capitalization of banks varies between 1 500 and 2 000 billion.
In front, the outstanding mortgage securities is about 11 000 billion. The exposure of U.S. banks on these securities is around 50%, or 5,500 billion.
The U.S. real estate fell by 10-12%, or a hole in accounting from 1 100 to 1 400 billion, thus pretty much the entire share capital of U.S. banks, not to mention the other market segments credit, student loan type, consumer loan, car loan, and above all business loans ...
Already at this stage, that's about all U.S. bank which is virtually insolvent.
But what do we know U.S. housing? It is disconnected in many countries around the world purchasing power. Given the financial situation in the country, with millions of foreclosures resulting in an oversupply of houses and apartments, we can reasonably estimate that the downward correction will continue with a first target located between -20 and -30 % within a year or two. Indeed, once the value of the mortgage exceeds that of a well, Americans are advised to declare bankruptcy. Only a bull market in real estate could calm the game Is this credible at this stage?
Prove a moderately pessimistic scenario with a fall of 25%. This is a hole of 2 500 to 3 000 billion. Just make these additions to understand that American finance is damn! She can not pay the abyss. The dollar also could not resist.
This is only a matter of time. The worst will happen. Simply, the U.S. is an election year and are not willing to do housework. Everything will be done to shift in time order. What yad'amusant, it was thought Haberrer with the head of Credit Lyonnais have toured the issue in the early 90 at the slips, but the Americans have largely exceeded in the discipline . The French taxpayer did not ultimately paid dearly seen that U.S. taxpayers will pay ...
Consequently, commodities denominated in dollars will explode upwards!
Highly likely, too, the American finance is likely to be nationalized.
According to Business Week, hedge funds are dozens to have been failures, hundreds to block investor withdrawals. The Fed in its effort to preserve the banking system in place, causing margin calls and the collapse of the financial, only yesterday the stars and other stars.
The French eager for the failure of speculative finance should not rejoice: between 20 and 40% of the assets of pension funds across countries, are invested in these hedge funds. Very wicked speculators actually manage the pension money ... and they are drinking from the cup, with a big B.
And as I said after he wrote a little less than a year in my book Buy or rent an apartment, George Bush is the biggest thief in the history of mankind. It was destroyed in eight years that Bill Clinton was beautifully built ... I find the media particularly silent on the responsibility of the Republican administration and its wars it could not afford to pay. Greenspan wanted to avoid the economic recession of 2001 through the transfer of the Internet bubble to the housing bubble. I do not know how Bush and Greenspan have been arranged, but the end result is there. It is a grim repetition of history on a bank, monetary and real estate!
France, which invented the concept of paper money based on trust, has already experienced this burst Monetary there several centuries. The purpose and cause of the failure were the same as financing of the war ...
Politicians are crazy. Generations after generations, centuries after centuries, they make the same mistakes again. Frankly, it's unhealthy home to spend more than what will fit in boxes. Is beyond me, especially this constancy in public spending.
The novelty is that they have brought with them people, and to a certain extent, businesses. Because the credit bubble is that of U.S. individuals and companies that the state has just calculated that it would benefit from growth based on fictitious debt still to reap more tax revenue ...
One wonders if the attachment of currency to the gold standard is not the only solution possible in practice given the limited brain development politicians in the economic field ... without of course hide the evil unnamed bankers.
Consequently, commodities denominated in dollars will explode upwards!
Highly likely, too, the American finance is likely to be nationalized.
According to Business Week, hedge funds are dozens to have been failures, hundreds to block investor withdrawals. The Fed in its effort to preserve the banking system in place, causing margin calls and the collapse of the financial, only yesterday the stars and other stars.
The French eager for the failure of speculative finance should not rejoice: between 20 and 40% of the assets of pension funds across countries, are invested in these hedge funds. Very wicked speculators actually manage the pension money ... and they are drinking from the cup, with a big B.
And as I said after he wrote a little less than a year in my book Buy or rent an apartment, George Bush is the biggest thief in the history of mankind. It was destroyed in eight years that Bill Clinton was beautifully built ... I find the media particularly silent on the responsibility of the Republican administration and its wars it could not afford to pay. Greenspan wanted to avoid the economic recession of 2001 through the transfer of the Internet bubble to the housing bubble. I do not know how Bush and Greenspan have been arranged, but the end result is there. It is a grim repetition of history on a bank, monetary and real estate!
France, which invented the concept of paper money based on trust, has already experienced this burst Monetary there several centuries. The purpose and cause of the failure were the same as financing of the war ...
Politicians are crazy. Generations after generations, centuries after centuries, they make the same mistakes again. Frankly, it's unhealthy home to spend more than what will fit in boxes. Is beyond me, especially this constancy in public spending.
The novelty is that they have brought with them people, and to a certain extent, businesses. Because the credit bubble is that of U.S. individuals and companies that the state has just calculated that it would benefit from growth based on fictitious debt still to reap more tax revenue ...
One wonders if the attachment of currency to the gold standard is not the only solution possible in practice given the limited brain development politicians in the economic field ... without of course hide the evil unnamed bankers.
source : agoravox.fr
18:16
The U.S. banking system is bankrupt?
Recent statistics, revised upward indicate that U.S. banks have suffered $ 850 billion of losses and writedowns in 2008, 90 billion for only 125 billion for Citigroup and Wells Fargo all Wachovia.
According to the IMF, the total losses from the banking crisis is expected to exceed 2200 billion U.S. dollars. Already, federal authorities have had to inject more 1.000milliards dollars to avoid further bankruptcies, the type of Lehman Brothers, all the measures implemented by the United States to overcome the crisis and recession amounting to 3.000 billion for the entire U.S. economy!
And banks are not the only victims of the financial crisis. Mention may also AIG, which through its para-banking subsidiary, AIG Financial Products, has already reached 98 billion loss in 2008, which required a takeover of the state (80% stake), and total payment of $ 180 billion.
Where are these losses? Obviously, credit subprime that are causing this crisis. But these have been resold through the channel of CDOs (Collateral Debt Obligations), securities traded on a market of over-the-counter, thus completely opaque and unregulated.
To protect against default risk, investors (often other banks) have contracted CDS (Credit Default Swaps) with other financial institutions, which has spread the "toxic" assets across the global banking system.
Today, the total outstanding CDS exceeds 60,000 billion * dollars * (cons only 6,400 billion at end 2004). The astronomical amount of these products is explained, according to Marc Chesney, a professor at the University of Zurich, by speculation, the stock of outstanding CDS to be near the 5,000 billion of risky debt on which the CDS are backed .
For Warren Buffett, the potential losses on these CDS exceed 10,000 billion! You should know that already, the bankruptcy of Lehman Brothers had affected large international banks, exchange for investment banking transactions in CDS. But this mechanism has been generalized. AIG had sold well over $ 450 billion to other banks (including two-thirds of foreign institutions). Thus, a substantial portion of federal assistance to AIG is already in the repayment of liabilities of the insurance company vis-à-vis foreign banks (including the General Society, for $ 12 billion). We must also remember that the rescue of AIG can repay the investors who had bet on Lehman Brothers by buying CDS this bank. So what, you it the situation could get worse?
Is that, beyond mortgages (subprime) that have been securitized (the creation of CDOs) and then provided (implementation of CDS), there are other "sword of Damocles": loans to consumption, including the default rate increases rapidly and credit cards * t * (up also unpaid), excluding the effect of impairments on the balance sheets of banks, severely under-capitalized, despite the 500 billion paid by the federal state line.
To save the American banking system, the government has used the full range of possible solutions: partial nationalization (AIG) or total (Freddie Mac, Fannie Mae) guarantee provided to structures concentrating toxic assets, draft "bad bank" supported by the state and even appeal to private investors, through sales systems debt auction (if there are investors interested ...)
What are the implications of these initiatives? We can already say that we are witnessing a massive transfer of private debt into public debt: the amount of "Treasury Bonds" (U.S. Treasury obligations) has almost doubled since the beginning of the year. And this is just the beginning. The U.S. budget deficit could reach 8% in 2009: the rescue of the banking sector is the price.
source of : cafedelabourse.com
According to the IMF, the total losses from the banking crisis is expected to exceed 2200 billion U.S. dollars. Already, federal authorities have had to inject more 1.000milliards dollars to avoid further bankruptcies, the type of Lehman Brothers, all the measures implemented by the United States to overcome the crisis and recession amounting to 3.000 billion for the entire U.S. economy!
And banks are not the only victims of the financial crisis. Mention may also AIG, which through its para-banking subsidiary, AIG Financial Products, has already reached 98 billion loss in 2008, which required a takeover of the state (80% stake), and total payment of $ 180 billion.
Where are these losses? Obviously, credit subprime that are causing this crisis. But these have been resold through the channel of CDOs (Collateral Debt Obligations), securities traded on a market of over-the-counter, thus completely opaque and unregulated.
To protect against default risk, investors (often other banks) have contracted CDS (Credit Default Swaps) with other financial institutions, which has spread the "toxic" assets across the global banking system.
Today, the total outstanding CDS exceeds 60,000 billion * dollars * (cons only 6,400 billion at end 2004). The astronomical amount of these products is explained, according to Marc Chesney, a professor at the University of Zurich, by speculation, the stock of outstanding CDS to be near the 5,000 billion of risky debt on which the CDS are backed .
For Warren Buffett, the potential losses on these CDS exceed 10,000 billion! You should know that already, the bankruptcy of Lehman Brothers had affected large international banks, exchange for investment banking transactions in CDS. But this mechanism has been generalized. AIG had sold well over $ 450 billion to other banks (including two-thirds of foreign institutions). Thus, a substantial portion of federal assistance to AIG is already in the repayment of liabilities of the insurance company vis-à-vis foreign banks (including the General Society, for $ 12 billion). We must also remember that the rescue of AIG can repay the investors who had bet on Lehman Brothers by buying CDS this bank. So what, you it the situation could get worse?
Is that, beyond mortgages (subprime) that have been securitized (the creation of CDOs) and then provided (implementation of CDS), there are other "sword of Damocles": loans to consumption, including the default rate increases rapidly and credit cards * t * (up also unpaid), excluding the effect of impairments on the balance sheets of banks, severely under-capitalized, despite the 500 billion paid by the federal state line.
To save the American banking system, the government has used the full range of possible solutions: partial nationalization (AIG) or total (Freddie Mac, Fannie Mae) guarantee provided to structures concentrating toxic assets, draft "bad bank" supported by the state and even appeal to private investors, through sales systems debt auction (if there are investors interested ...)
What are the implications of these initiatives? We can already say that we are witnessing a massive transfer of private debt into public debt: the amount of "Treasury Bonds" (U.S. Treasury obligations) has almost doubled since the beginning of the year. And this is just the beginning. The U.S. budget deficit could reach 8% in 2009: the rescue of the banking sector is the price.
source of : cafedelabourse.com
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