Wednesday, October 29, 2008

Counterparty Risk...... Lufthansa Edition

I assume we will hear similar stories for month to come...... We all know that the AIG rescue was mainly because they were a major cds unwriter ( see A Question for A.I.G.: Where Did the Cash Go? ).... After the Lehman collapse and the actions taken from the governments i assume the real danger will come from non bank counterparties ( hedge funds, companies ).......

Ich denke das wir ähnlich gelagerte Geschichten demnächst noch öfter zu hören bekommen.... Die starke Stellung von AIG gerade im Hinblick auf CDS im Zusammenhang mit Banken war der eigentlich Grund für die Rettungsaktion ( siehe A Question for A.I.G.: Where Did the Cash Go? ). Ansonsten hätten alleine europäische Banken zweistellige Mrdbeträge verloren. Nach Lehman haben ja alle politischen Vertreter klar gemacht das es keine Bankenpleiten (Versicherungspleiten ?) mehr geben wird und daher ist davon auszugehen das die nächste Welle der "Counterparty" Risiken sicher von Hedge Fonds und Firmen kommen wird die nicht mehr in der Lage sein werden Ihren Verpflichtungen nachzukommen.....


Lufthansa's fuel-hedging for the remainder of 2008 fell to 72 percent of needs from 85 percent because the Sept. 15 collapse of Lehman Brothers Holdings Inc. liminated some of the contracts, the airline said. The company, which forecasts fuel expenses will rise 38 percent to 5.4 billion euros this year, is 57 percent hedged for 2009 needs. Spending on fuel next year is targeted at 5.6 billion euros, Gemkow said.

The airline, which took a charge of 76 million euros because of Lehman's failure, doesn't plan to build up its hedging position.

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Tuesday, October 28, 2008

Trump Needs A Bailout.....

At least in Chicago....... This is one prominent example that the problems in the commercial real estate market are growing rapidly on a daily basis ( see .CMBS Indices )....It is probably no coincidence that once again Deutsche Bank is involved .... At least this time their exposure seems to be minor compared to their Vegas adventure ( see Deutsche Bank Is Doubling Down In Vegas..... ).... Maybe this very possible blow up in Chicago will keep Trump from bragging for the next quarter.... SCHADENFREUDE!

Zumindest was sein Portfolio in Chicago angeht..... Dieses sehr prominente Beispiel zeigt recht anschaulich wie extrem schnell sich im gewerblichen Immobiliensektor die Risiken auftürmen (siehe CMBS Indices )....Irgendwie bekommt man dsa Gefühl das die Deutsche Bank extrem oft in solche Geschichten verwickelt ist. Immerhin scheint sich der zu erwartene Verlust ganz im Gegensatz zu dem wahnwitzigen Vegas Abenteuer (Deutsche Bank Is Doubling Down In Vegas..... ) in Grenzen zu halten. Uns bleibt die Hoffnung das der kaum zu ertragene Herr Trump seine Prahlerei nach der sehr wahrscheinlichen Chicagobauchlandung zumindest mal für ein Quartal einstellen wird...... Meine Schadenfreude ist ihm in jedem Fall gewiss.....

In Chicago, Trump Hits Headwinds WSJ

Donald Trump's tallest construction project ever is facing some tall challenges.

Many real-estate developers are under pressure these days as lenders and investors rush to cut their exposure to the market. But Mr. Trump's 92-story Trump International Hotel & Tower in Chicago, which will be the tallest building constructed in the U.S. since the Sears Tower opened in 1973, may be especially vulnerable because it's getting hit by a triple whammy of colliding forces: the credit crunch, the reversal in the housing market and weak retail sales.

The shiny glass skyscraper is one of the few that the brash Mr. Trump developed without partners. The situation also puts pressure on one of the project's major lenders, Fortress Investment Group LLC.

So far, Mr. Trump has lined up buyers for a bit less than $600 million of condo units and condo-hotel units in a residential market that has virtually seized up. Yet he owes lenders as much as $1 billion when the loans are due, according to public records and several people familiar with the project. He has closed around $200 million in sales so far, with roughly $380 million still in contract. The retail portion of the giant building is for sale, at a time of rising vacancies for retail space in Chicago and one of the worst eras for retailers in years. .....

Most urgently, to stay current on the project's biggest piece of debt, a $640 million senior construction loan, originated by Deutsche Bank AG, Mr. Trump must negotiate by Nov. 1 to exercise an extension provision contained in the original loan that he took out in 2005. To extend the loan, Mr. Trump must prepay additional interest charges to Deutsche Bank. Deutsche Bank declined to comment other than to say it syndicated the loan to several other banks and that its exposure is less than $50 million. Mr. Trump is confident that the extension will be agreed upon.

Adding to Deutsche Bank's leverage in the talks, Mr. Trump agreed to a $40 million recourse completion guarantee on the loan. That means Deutsche Bank can both foreclose on the property and go after Mr. Trump personally for that amount in the event he doesn't complete the building. Mr. Trump discounts the importance of the completion guarantee and is confident that he will complete the building next year. Other than the completion guarantee, Mr. Trump has no personal recourse on the project and any problems in Chicago are unlikely to affect his other businesses......

The issues don't end with the Deutsche Bank loan, according to loan documents. Mr. Trump borrowed $130 million in a mezzanine loan originated by a lending unit of private-equity firm Fortress Investment. That loan contains stiff terms, including a $50 million "exit fee" to be paid when the loan is due, in addition to accrued interest. A loan document says Mr. Trump could have to pay Fortress as much as $360 million, depending on how long the loan accrues interest. Combined with the Deutsche Bank senior loan, he would owe more than $1 billion in total. Should Trump fail to sell more units, Fortress would be on the hook to take over the project and could see a loss on its investment. .....

> Here is more on Fortress / Hier mehr zu Fortress Plundered Fortress / Pump & Dump At Its Best & Hedge Fund Hilarity: Fortress Jokes About Leaving Public Markets

During the last real-estate collapse in the early 1990s, Mr. Trump was pushed to the brink of bankruptcy because he was personally on the hook for hundreds of millions of dollars of debt. He later restructured his debt with the banks and worked his way back to doing real-estate deals, product endorsements and reality television.

The Chicago project is different. He has no partners, he arranged the financing, and his family is managing the construction and marketing. (In 2004, Bill Rancic, the winner of Mr. Trump's reality-television show, "The Apprentice," worked on the Chicago project for a year.)

Gail Lissner, vice president at Appraisal Research Counselors, a Chicago real-estate tracking firm, says contract signings on condos in downtown Chicago were down 72% the first half of the year from a year earlier. And the supply keeps coming. Downtown Chicago will see nearly 10,000 new condo units delivered in 2008 and 2009, a substantial portion of which haven't been presold.

Mr. Trump recently began marketing to sell the 100,000-square-foot retail space in the building, which will be the last part of the building to open, at the end of 2009. But given the wretched retail climate, and the almost complete lack of real-estate financings, finding a buyer could prove challenging. Mr. Trump's son Eric Trump, who is running the retail portion of the project, is confident the project will eventually sign leases with high-end retail tenants. He says the Trumps will sell the retail portion of the project only if a buyer presents a good price.

The 339-room hotel, of which the Trumps still own more than half the rooms, has generated revenue. The Trumps sold around 150 rooms to buyers who can choose to earn room revenue after paying Mr. Trump various fees and assessments, according to marketing documents.

But the hotel business is in rough waters as travelers cut back. Among the neighborhood's 12 luxury hotels, including Mr. Trump's, the percentage of vacant rooms has increased each of the past three months, compared with the year-earlier period, according to data provider Smith Travel Research. And revenue per available room, a common-industry measure, is down three consecutive months.

Adding to the project's stress, Mr. Trump is now in competition with his own customers. At least 30 buyers of the hotel units have put those rooms back on the sales market at substantial discounts to what Mr. Trump is charging for similar units, according to local sales brokers.

Local real-estate broker Andrew Glatz, of Crown Heights Realty, is representing two dozen hotel units and six condo units for resale in the Trump project. He's sold three so far. "All our units are 30% below Trump. We can't compete with his marketing, so we compete with his prices," he says. "It's the most fabulous property in Chicago. They didn't spare any expense," he boasts. His clients can afford to sell below Trump's prices because they bought their units in 2003, before Mr. Trump raised prices substantially.

UPDATE : Trump Files Suit Against Lenders WSJ Mr.

Trump has put $77 million of his own equity into the tower, which he would stand to lose in a potential foreclosure. Other than a $40 million guarantee to complete the project, Mr. Trump has no recourse obligations to the project. A Trump spokesman declined to comment.

Deutsche Bank originated the construction loan in 2005 and sold off most of it to others, retaining less than $10 million of exposure on that loan. The suit alleges that Deutsche Bank compromised the senior construction loan by selling pieces off to "so many institutions, banks, junk bond firms, and virtually anybody that seemed to come along," that the lending group is unable to come to a consensus on how to deal with the matter.

It also alleges Deutsche Bank created a "serious conflict of interest" by taking a separate stake in the project's so-called mezzanine loan that was originated by private-equity firm Fortress Investment Group. The mezzanine loan, which is junior to the senior construction loan, had an original principal of $130 million but will eventually accrue to $360 million. Deutsche Bank purchased roughly one-quarter of the mezzanine loan, according to people familiar with the matter.

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Friday, October 24, 2008

Number / Shocker Of The Day "Volvo New Truck Orders".....

Despite the market terror a nice weekend......

Trotz allem ein schönes Wochenende.....

Volvo said it received 115 order bookings for heavy trucks in Europe in the quarter, down from 41,970 trucks a year earlier. Customers in Europe are taking a ``wait and see'' attitude amid turmoil in global financial markets, Volvo said.

The following table is from the Volvo website. Some readers questioned the data but unfortunately the ordernumber for Europe was no typo. UPDATE :It´s safe to say that cancellations are playing a big part..... There were obvioulsy no cancellations in 2007.....

Die nachfolgende Tablle ist direkt von der Volvo Präsentation Hatte wie einige Leser ebenfalls leichte Bedenken das sich hier evtl. der Fehlerteufel eingeschlichen hat. Ist leider nicht der Fall. Die Orderzahl ist wirklich so schaurig....... UPDATE: Der Löwenanteil des Rückganges liegt in den Stornierungen begründet. Da diese Zahl auf gleicher Basis wie im Jahr 2007 ( mit offensichtlich keinen oder nur wenigen Stornierungen ) berechnet worden ist bleibt sie leider repräsentativ

Third quarterChangeFirst nine monthsChange
Number of trucks20082007in %20082007in %
North America7,5787,486119,61116,18721
South America5,0963,5784213,63912,7527
Asia 14,60712,8631343,06737,57415
Other markets4,6765,675(18)19,82317,64712


The downturn in demand in Europe has been more severe than previously expected. The financial turmoil and credit tightening has led to a very cautious approach among customers when it comes to deciding on investing in new trucks. During the quarter, gross order intake in Europe amounted to approximately 20,000 trucks, consisting of both new customer orders and some changed orders. The explanation to why the net order intake only amounted to 115 trucks is that a review of the order book was carried out in close cooperation with customers. The review resulted in that approximately the same number of orders that were received during the quarter was taken out of the order book

Don´t know what to make of this...... Either they inflated orders in the past or they are trying to say in a very complicated way that they had huge cancellations.....

Keine Ahnung wie genau Volvo das meint..... Entweder die haben in der Vergangenheit die Orderzahl künstlich gen Norden gepusht oder Volvo probiert hier sehr verklausoliert zu berichten das die Stornierungen gigantisch waren......

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Thursday, October 23, 2008

German Banks Are On The Hook For $ 21.Billion Or 30% Percent Of Icelands Forgein Debt

This is the number based on the end of june.... And taking the judgement & brilliance from the German bankers into account i assume this number isn´t any lower right now....... Nice to see that you can ruin your banking system with having a flat property market during the past decade...... Just brilliant!

Diese Zahl stammt aus den Daten von Ende Juni.....Nach den Erfahrungen mit deutschen Bänkern ist aber mit Sicherheit davon auszugehen das trotz genügend alarmierender Vorzeichen diese Summe wohl aktuell nicht wesentlich geringer ist.......Es ist erschütternd wie man es schaffen kann mit dem weltweit wohl einzigen stagnierenden Immobilienmarkt binnen der letzten 10 Jahre sein Bankensystem ähnlich in den Boden zu stampfen wie es die Bubbleländer geschafft haben...... Eine wahre MEISTERLEISTUNG auch von der Bankenaufsicht und den mit Politikern besetzten Aufsichtsräten (besonders bei den Landesbanken ) die jetzt mit Sicherheit der Steuerzahler ausbaden darf! Nimmt man den isländischen Notrenbänker beim Wort und es sind bestenfalls 15% an Rückzahlungen zu erwarten ........Hier die deutschen Versionen Isländer schulden deutschen Banken gut 16 Milliarden Euro FAZ, Größtes Islandrisiko bei deutschen Banken FTD

German Banks Now Face Big Losses From Their Misadventures in Iceland WSJ
German banks have bled billions of euros in the U.S. subprime-mortgage debacle. Now they face another potentially big bill from a costly misadventure in Iceland.

The Icelandic bet is the latest illustration of how German banks -- including once-sleepy regional lenders -- ranged far and wide in recent years in search of yield to escape stiff competition and low profit margins on their home soil.

By June of this year, before Iceland's spectacular financial meltdown, German financial institutions had lent $21.3 billion to Icelandic borrowers, according to the Bank for International Settlements. That was well over a quarter of all foreign lending in Iceland, and roughly five times as much as Britain, the next-largest creditor country.

Iceland's three largest banks -- and the country's main debtors -- collapsed this month, plunging the country into crisis. Kaupthing Bank, Iceland's biggest, missed a coupon payment this week on 50 billion yen ($512 million) of bonds in Japan, heightening default concerns.

Blaming fallout from the U.S. financial crisis, lawmakers in Berlin approved a €500 billion ($642 billion) rescue package for German banks on Oct. 17. Bayerische Landesbank, a state-owned regional lender, became the first German bank to raise its hand for help this week, requesting a €5.4 billion capital injection from the federal government.

BayernLB, as the bank also is known, wrote down €2.6 billion in investments during the first half of the year, much of them tied to soured American subprime debt. But it also disclosed this week that it has €1.5 billion in credit exposure to Iceland, a large chunk of which it might also have to write down. ( more from Bloomberg BayernLB to Seek EU5.4 Billion From German Government )

That lack of clarity highlights the lack of transparency in today's global financial markets -- and why it may take a long time for banks to fully resume lending to each other, even as authorities in Germany and other countries take aggressive steps to restore confidence. Germany's financial-services regulator said Thursday new accounting rules aimed at giving banks and insurers more leeway in valuing certain assets should boost earnings at the country's biggest banks by up to €1 billion in the third quarter.

Now foreign bets that boosted profits are coming back to haunt many banks. Germany's five largest private-sector banks had €12.9 billion in markdowns on securities during the last half of 2007 and first half of 2008, according to Standard & Poor's. Many of the losses are tied to U.S. investments.

But some of the country's state-owned regional lenders, or landesbanken, also have bloodied their noses after venturing abroad in search of juicier yields. Originally created to channel credit to their home states, some became aggressive players in international capital markets in recent years. They also had a lot of money to spend after raising money on the cheap before 2005, when government guarantees on their new debt issuance expired.

"There's not enough low-risk business that can feed all these banks," said Johannes Wassenberg, a European bank credit analyst in London with the ratings agency Moody's.

Two small and relatively unknown German banks, SachsenLB and IKB Deutsche Industriebank AG, became the country's first two victims of the U.S. subprime crisis last year after stocking up on asset-backed securities and then failing to secure enough liquidity to stay afloat.

Deutsche Bank AG and Commerzbank AG, Germany's two largest banks by assets, declined to say how much exposure they have to Iceland. Landesbank Baden-Württemberg, or LBBW, the country's largest landesbank, also declined to say how much Iceland exposure it holds.

HSH Nordbank, a smaller landesbank, said Thursday it had exposure of "low three-digit-million" euros to Iceland. Another landesbank, WestLB, said its exposure to Iceland was "less than €100 million." A third landesbank, Helaba, said its Iceland exposure was below €10 million.

David Oddsson, Iceland's central bank chief, recently estimated that foreign creditors would "unfortunately only get 5, 10, 15% of their laims" on the country's three largest banks.

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Tuesday, October 21, 2008

CRASH DANCE ♫ [The National Debt Ceiling]

They have done it again.... Another brilliant piece from Versusplus ( Thanks Marcy ). The lyrics and more excellent videos on their website.

Da haben die mal wieder einen Klassiker rausgehauen.... Einmal mehr extrem gelungenes von Versusplus ( Danke Marcy ). Empfehle bei Gefallen sich ebenfalls die anderen erstklassigen Stücke auf deren Website reinzuziehen......

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Monday, October 20, 2008

"Cowboy Hedging" Leads To $ 2 Billion Trading Loss....But Compared To Jerome Kerviel.........

Peanuts for Societe Generale...... :-) This might gives us a hint what kind of blowups we can expect from hedge funds or trading desks from financials. The only difference is that this time the trade was "without proper authorisation" ( for an example of a "normal" hedge that went wrong see `KIKO' Hedges Slay Korean Exporters, Threaten Banks )...... Got Gold?

Societe Generale wäre für einen so geringen Verlust wohl dankbar gewesen...... :-) Denke das dieses Beispiel einen leichten Vorgeschmack auf das gibt was demnächst von Seiten der Hedge Fonds und den Tradingabteilungen der Finanzinstitute noch auf uns zurollen wird. Der einzige Unterschied wird dann sein das diese Trades nicht "unauthorisiert" gewesen sind ( hier ein Beispiel einer "normalen" Hedgingtransaktion `KIKO' Hedges Slay Korean Exporters, Threaten Banks )...... Got Gold?

Citic Pacific Slump on Possible $2 Billion Forex Loss
Oct. 21 (Bloomberg) -- Citic Pacific Ltd. tumbled the most in 18 years in Hong Kong trading after predicting HK$15.5 billion ($2 billion) in losses from unauthorized currency bets.

The unit of China's biggest state-owned investment company dropped as much as 47 percent to HK$7.70 at 11:14 a.m. local time. The company ousted Financial Director Leslie Chang and Financial Controller Chau Chi Yin and said yesterday in a filing its parent would help to arrange a $1.5 billion loan.

``The company may face bankruptcy if it doesn't secure the loan from its parent as banks probably won't dare to lend money to it under the current credit crunch,'' said Liu Yang, managing director at Atlantis Investment Management Ltd., which oversees about $2 billion in China assets. ``The incident shows the company has real problems in risk management.''

WSJ The hit to Citic Pacific's bottom line could reach 14.7 billion Hong Kong dollars ($1.89 billion), the company said. That is roughly a third more than the company earned in 2007. The size of the loss won't be known until Dec. 31, when Citic Pacific plans to mark to market its positions in currency-derivative contracts

Citic Pacific's bet that the Australian dollar would rise incurred losses as the currency tumbled about 30 percent against its U.S. counterpart from a 25-year high reached in July. This may be the biggest derivatives loss reported by a Chinese company, almost four times the 2004 sum incurred by China Aviation Oil (Singapore) Corp. betting on jet fuel.

The shares drop, the most since 1990, cut the company's market value to HK$17.3 billion and takes the year's loss to 82 percent.

Citic Pacific's potential loss would beat other wrong bets by Chinese companies. China Aviation Oil triggered Singapore's biggest derivatives scandal after revealing a $550 million trading loss. Liu Qibing, a Chinese government trader, made wrong copper bets resulting in an estimated $300 million in losses in 2005.

Citic Pacific bought currency contracts to fund an A$1.6 billion ($1.1 billion) iron ore mine in Australia, the company said yesterday. The hedging transactions weren't approved by the company's Chairman Larry Yung, the company said.

A loss of HK$808 million has been incurred from terminating some leveraged currency contracts, and an additional HK$14.7 billion in losses are possible, Citic Pacific said yesterday.

Strike Price
The possible losses are based on an exchange rate of 70 cents to the Australian dollar, $1.35 to the euro and 6.84 yuan to the dollar, it said. The outstanding Australian contracts, for monthly delivery until October 2010, have a weighted average strike price of 87 cents to the Australian dollar, it said.

The Australian dollar traded at 69.65 U.S. cents at 12:17 p.m. in Sydney.

``Citic had only A$1.6 billion in capex requirements, however, it is now interested in more than A$9 billion,'' Anil Daswani, a Hong Kong-based analyst at Citigroup, said in a report. The ``cowboy hedging policy sees Citic sitting on unlimited potential losses,'' Daswani said.

Citic Pacific on Aug. 28 said its first-half profit fell 12 percent to HK$4.38 billion as material costs rose and part-owned Cathay Pacific Airways Ltd. posted a loss. At the end of June, the company had net debt of HK$31.2 billion as well as HK$30.2 billion in cash and available committed loan facilities.

UPDATE: Big Currency Bets Backfire WSJ

[foreign exchange]

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Sunday, October 19, 2008

Eastern Europe Carry Trades.......

Over 50 percent of all loans in a foreign currency..... This "conservative" strategie is now backfiring.........No wonder the ATX in Vienna where lots of the dominant banking players are listed is one of the worst performing.. The main players in the Baltics are coming from Scandinavia and especially Sweden (UPDATE : Just in time Sweden braces for a Baltic backlash) ......... Here are more details about the debt & financing troubles in Eastern Europe..... On top of this i recommend this post Baltic Real Estate / Bubble World Tour on the the real epicentre....

Wenn über 50% aller ausstehenden Kredite nicht in der Landeswährung aufgenommen werden kann man nicht gerade von einer "soliden" Finanzierungsform sprechen.... Solange die nur Unternehmen betrifft kann man sicher noch ein Auge zudrücken...Wenn aber private Hypotheken und PKW´s über diesen Weg finanziert werden darf man sich über einen veritablen Kater nicht wirklich wundern......Kein Wunder das der ATX in Wien einer der am übelsten performenden Aktienmärkte überhaupt ist......Hier kommen weitere Details zur Schulden und Finanzierungslage in (der ehemaligen Boomregion ) Osteuropa. Die wesentlichen Spieler im Baltikum kommen aus Skandinavien und da besonders aus Schweden ( UPDATE: Wie passend Sweden braces for a Baltic backlash )....... Darüberhianus verweise ich auf ein früheres Posting aus dem Jahr 2007 Baltic Real Estate / Bubble World Tour das besonders auf das kommende Epizentrum der Krise eingeht.....

WSJForeign-currency borrowing, which is the normal way for Hungarians to buy homes, cars or other big items, are set to become more expensive because of the weak forint, which has lost about 12% of its value against the euro since Oct. 1.

Viktoria Erdos, a 30-year-old professional dancer smoking a cigarette in a café near Budapest's opera house, said her monthly payments on her Swiss-franc mortgage are up about 15%, but it isn't cramping her style too badly. "I'm buying fewer clothes and am partying a bit less," she said. "I'm not really worried yet."

But today's crisis is serious enough. Investors' concern has forced Hungary's authorities to seek a €5 billion ($6.7 billion) loan from the European Central Bank, as well as verbal support from the International Monetary Fund -- two gestures Hungary hopes will persuade investors that the country has strong allies.

All but one of Hungary's major banks are owned by big international banking groups based in Western Europe or the U.S. Around 40% of Hungary's short-term foreign debt is money that banks like Citigroup Inc. lent to their local subsidiaries, according to central-bank figures.

Around two-thirds of Hungary's foreign-currency debt is owed by the private sector, Mr. Simor said -- and most of that is owed by the local units of multinational companies, which dominate Hungary's business scene.

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Tuesday, October 14, 2008

KBC "Total Mark-Downs On The CDO Portfolio In The Third Quarter Will Come To € 1.6 billion"

If KBC is any guide the next quarter for all banks will be uglier than already feared...... Just take a look at the CDO revaluation ( second column from the bottom of the chart ) over the past few quarters and it probably needs an massive accounting change to avoid massive write downs all over the banking sector..... So far the part of "mark-to market" derivative accounting hasn´t changed ( UPDATE: Surprise , surprise..... The EU has just changed/relaxed the accounting rules for derivatives EU lockert Bilanzregeln (German Link....).......Time to step up the lobbying efforts.....What is probably the most "shocking" is the fact that this write down is not related to real estate...Quote KBC "....and primarily corporate collateral" . And i doubt that other institutions are strong enough to take the same conservative approach like KBC ...... I recommend to read the KBC Details / Presentation

Sollte KBC die Richtung für den Bankensektor vorgeben sieht es noch übler als bereits eh erwartet aus...... Guckt Euch nur mal an wie sich die Abschreibungen auf das CDO Portfolio ( zweite Spalte von unten ) über die letzten Quartale entwickelt haben... Es wird wohl nur eine Änderung der Abschreibungsbilanzierungsrichtlinien eine Welle von mrdschweren Abschreibungen verhindern können.... Bisher sind Derivate wie CDO´s noch nicht von einer Aufweichung der Mark-To-Market Regel betroffen... Bin mir aber sicher das die Lobbyarbeit Wirkung zeigen wird ( ÜBERRASCHUNG.....UPDATE: EU lockert Bilanzregeln )...... Das wird aber sicher den Bankenbilanzen kein neues Vertrauen einhauchen können..... Der eigentliche Hammer ist in diesem Fall aber das nach Aussagen von KBC das CDO Portfolio fast nichts mit Immobilien zu tun hat sondern fast ausschließlich durch diverse Formen von Unternehmensanleihen gedeckt ist....Und ich bezweifle ganz stark das alle Institute in der Lage sind ähnlich wie bei KBC jetzt geschehen einen konservativen Wertansatz zu wählen...... Empfehle für mehr Informationen die KBC Präsentation

KBC Press Release André Bergen, KBC Group CEO summarised the results as follows: ‘Despite the difficult climate, the underlying commercial results are satisfactory. However, as has been repeatedly pointed out, the quarterly results are negatively affected by accounting mark-downs on investment portfolios. Given that KBC has a strong capital position, we have also decided to follow up the Moody’s downgrades by marking down additional amounts. This is a kind of provision to absorb the volatility of future earnings, which should reduce customers’ and shareholders’ uncertainty regarding future results." Total mark-downs on the CDO portfolio in the third quarter will come to 1.6 billion euros, resulting in the provisional net result for the third quarter falling to between -880 and -930 million euros. KBC’s own capital buffer is more than adequate to absorb this and every aspect of KBC's financial position remains very strong. For instance, the Tier-1 ratio for banking activities after this action has been taken will still be well above 8.5%.

Market valuation of the structured credit portfolio
As announced a year ago, KBC has an outstanding portfolio of collateralized debt obligations (CDOs) for an (unchanged) nominal amount of 9 billion euros. In accordance with IFRS accounting rules, this portfolio is marked to market. Falls in value are recorded in full in the income statement (in contrast to some other banks who mark down the value against equity in the balance sheet because the CDOs are classified differently for accounting purposes). On 30 September, the mark-down on the CDO portfolio for the third quarter stood at 386 million euros (104 million for the counterparty exposure to monoline insurers and 282 million for changes in credit market prices and other factors). By comparison, the mark-down through the income statement in the second quarter of 2008 came to 315 million euros.

Anticipating future losses
On 14 October 2008, the rating agency, Moody’s Investors Service, announced that it had downgraded the credit rating of a number of CDO securities. This decision was based on loss assumptions that are far more stringent than any others before them. KBC is sticking to its conservative policy of bringing the value of all securities with a credit rating below Ba3 to zero and is applying this retrospectively to its third-quarter results.

Moreover, KBC has decided to apply the new rating hypotheses to its entire CDO portfolio and to record this mark-down in full in the third quarter. In so doing, KBC is largely preventing its future results being affected by additional rating downgrade. The combined impact of these decisions on the results will amount to around -1.25 billion euros (± -850 million euros after tax).

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Bring Out The Discounts.......

Looks like we will get some really good bargains druing the next few month.....I´ll bet that the next wasteful "stimulus" package is already in the making...... Lets hope that the upcoming package will include at least a small portion of infrastructure investments..... But as long as foreign bankrollers are demanding a much higher interest rate there is little incentives to stop this madness....

Sieht ganz nach enigen Schnäppchen in den nächsten Monaten aus......Denke bei uns gibt es ein ähnliches Bild ( Ein Blick auf den Kurs von Metro / Eigner von Saturn & Media Markt ansehen/ sollte genügen).... Gehe jede Wette ein das in den USA bereits ein weiteres sinnloses Konjunkturpaket geschnürt wird..... Bleibt zu hoffen das hier im Gegensatz zum ersten vollkommen gescheiterten Versuch zumindest ein Bruchteil in langfristig sinnvolle Infrastrukturprojekte geht...... Aber solange die USA es schaffen immer noch genügend ausländische Investoren zu "animieren" diesen Wahn mit knapp 4% zu finanzieren muß man Ihnen insgeheim ein großes Kompliment machen (ehrlich gemeint !).....

NYT MasterCard reported last week that spending on consumer electronics and home appliances dropped 13.8 percent in September compared with a year ago. That number is by far the largest recorded since MasterCard began tracking the category in 2003, and twice the largest previous monthly drop in such spending.
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Monday, October 13, 2008

No Kidding.... Dubai May Need Help To Repay Debt....

I have wondered about Dubai early on in 2007 ( see Dubai / Borrow To Build.....? ) what fundamentals are behind the boom in Dubai. It really looks like lots of the megalomaniac projects that have been anounced and are already under construction will face some serious "headwinds"........ In fairness it has to be mentioned that in 2007 only 7 percent of GDP was oilrelated and lots of the giant projects and investments are an attempt to transfrom the economy... It seems that the pace in recent years was too fast and it feels like an attempt to ramp things up with a crowbar...... SEE UPDATE AT THE END OF THE POST

Ich habe mich bereits in meinen bescheidenen Anfängen als Blogger im Anfang 2007 in Dubai / Borrow To Build.....? gewundert was genau in Dubai abgeht. Es sieht in der Tat so aus als wenn ein guter Teil der größnwahnsinnigen Projekte die angekündigt und die sich fast immer auch schon im Bau befinden in nächster Zeit in erhebliche Probleme laufen könnten...... Müßte lügen wenn ich nicht ein gewisses Maß an Schadenfreude verspüren würde...... Fairerwaise muß man erwähnen das Dubai nur noch 7% des BSP dem Öl zu verdanken hat und die gigantischen Projekte ein Versuch sind die Wirtschaft radikal zu transformieren..... Leider sieht es so aus als wenn hier das Tempo in den letzten Jahren doch erheblich zu hoch gewesen ist und das ganze evtl., doch einem Versuch mit der Brechstange gleicht....... BITTE DAS UPDATE AM ENDE DES POSTINGS BEACHTEN

Oct. 13 (Bloomberg) -- Dubai may depend on support from neighboring Abu Dhabi and the federal government of the United Arab Emirates to help pay for a surge in borrowing, Moody's Investors Service Inc. said.

Government-controlled companies owe at least $47 billion in total, more than Dubai's gross domestic product, according to Moody's data based on economic statistics from 2006.

``We believe that leverage raised primarily through state- owned corporations will continue to grow faster than GDP for at least the next five years, during which time the Emirate's susceptibility toward execution, financing and geopolitical risks will be at its most pronounced,'' Philip Lotter, Dubai- based senior vice president at Moody's, said in a report today.

Dubai has borrowed to fund real estate projects including Burj Dubai, the world's tallest tower, and to buy stakes in Deutsche Bank AG, European Aeronautic Defence and Space Co. and Standard Chartered Plc, as it seeks to reduce dependence on its dwindling oil reserves.

Abu Dhabi, by contrast, owns more than 90 percent of the U.A.E.'s oil reserves and nearly 8 percent of the world's total. The Abu Dhabi Investment Authority, its sovereign wealth fund, has assets of between $250 billion and $875 billion, according to the International Monetary Fund.

Dubai controls its economy through state-owned companies that dominate each major industry. Dubai Holding LLC, which groups assets belonging to Dubai Ruler Sheikh Mohammed bin Rashid al-Maktoum, owns hotel chain Jumeirah Group and Dubai International Capital, which unsuccessfully bid for Liverpool Football Club earlier this year.

Default Swaps
The cost of insuring Dubai Holding's bonds has increased nearly four-fold since May, according to traders of credit default swaps. Contracts protecting Dubai Holding Commercial Operations medium-term notes for four years traded at 679.3 basis points on Oct. 10, up from 172.99 at the beginning of May, CMA Datavision prices show.

Dubai World, a state-owned holding company, acquired almost 10 percent of Kirk Kerkorian's MGM Mirage last year for about $5.1 billion. MGM shares have since tumbled to $16.80 from $84 when the deal was agreed.
> The folling quote is from my post Deutsche Bank Is Doubling Down In Vegas.....

> Der nachfolgende Kommentar stammt aus meinem Post Deutsche Bank Is Doubling Down In Vegas.....

Deutsche will have to raise its bet with another $1 billion investment in the development, at the same time local operator Boyd Gaming has shelved a $5 billion project on the Strip. That looks like a risky double-down for a bank already exposed to MGM Mirage's cash-strapped $11 billion CityCenter project nearby.

> I´m not sure if they are already on the hook but when even Dubai World is late in raising as much as $3.5 billion for their $11.2 billion CityCenter project in Las Vegas it is not a very good sign.....MGM,Dubai Fall Behind on $3.5 Billion Loan for Las Vegas Plan . Watch the folling clip and it is no wonder why they are falling behind..... (clip was deleted.... I wonder why....)

> Ich bin mir nicht sicher ob die Deutsche Bank hier schon im "Feuer" steht. Wenn aber selbst Dubai als Hauptinvestor momentan Probleme hat Kredite zu bekommen ist dies sicher kein gutes Zeichen..... MGM,Dubai Fall Behind on $3.5 Billion Loan for Las Vegas Plan . Schaut Euch den Clip an und es ist wenig verwunderlich warum es Finanzierungsprobleme gibt....... Der Clip ist inzwischen gelöscht worden.... Leicht auszumalen warum.....
Deutsche Bank shares have fallen nearly 70 percent since Dubai government-owned DIFC Investments bought a 2.2 percent stake for about $1.8 billion in May 2007.
``In most countries there are identifiable delineations between the public and private sectors,'' Tristan Cooper, Moody's Middle East sovereign analyst, said in the statement. ``In Dubai, however, the state corporatist model plus the fact that the ruler and his closest relatives form the core of the government, make it difficult to draw such distinctions.''

`Implicit' Support
Abu Dhabi and Dubai are the two-largest emirates in the seven-member U.A.E.

While Dubai's economic model ``has proved successful to date, cumulative liabilities are currently rising faster than investments are able to generate returns, which increases Dubai's medium term susceptibility to execution risks and necessitates a clear understanding of wider implicit federal support when rating key government-backed corporations,'' Lotter said
``We don't have any problem raising money,'' Dubai World Chairman Sultan Bin Sulayem said in a telephone interview in Dubai today.
``Why would we announce a big tower if we can't afford to pay for it?''
> I´ve heard other people saying similar things way too often during the paste few years....
> Den Satz habe ich in den letzten Jahren schon einige Male gehört.......
Dubai's state companies have lost at least $6 billion on their five biggest public investments in the past two years, led by Dubai World's stake in casino operator MGM Mirage. Losses on undisclosed investments may be $30 billion, said Luis Costa, emerging-markets debt strategist at Commerzbank AG in London.

``About 80 percent of Dubai World is non-transparent, so it's a very tough game,'' said Costa. ``Deals such as the world's tallest tower may now need more capital injection from the state or may even fail.''
Ruler Sheikh Mohammed bin Rashid al-Maktoum has borrowed to replace Dubai's dwindling revenue from oil with earnings from tourism, finance and real estate. State-owned carrier Emirates has increased its fleet to the largest in the Middle East and has the most orders worldwide for the Airbus A380 superjumbo, as the government seeks to double tourists per year to 15 million by 2015.

Dubai World owns DP World Ltd., the third-largest international port operator, Istithmar World, a private equity firm that acquired Barney's New York Inc. last year, and Nakheel PJSC, builder of the manmade palm-shaped islands in the Persian Gulf. The developer is also building the Nakheel Tower, which will surpass the Burj Dubai, currently the world's tallest at 707 meters.
> I´ll bet that this Skyscraper ( see Nakheel Tower / Wikipedia ) won´t be build.... In hindsight Dubai should be grateful that the location had to be changed and the construction hasn´t started yet......
> Ich lehne mich mal aus dem Fenster und behaupte das dieser Turm zu Babel ( siehe Nakheel Tower / Wikipedia ) niemals gebaut werden wird... Im Nachinnein kann Dubai froh sein das sich durch einen veränderten Bauplatz die Konstruktion verzögert hat und der Bau noch nicht begonnen hat.....
Costs are rising on contracts to protect against a default by Dubai Holding LLC, which groups assets belonging to Sheikh Mohammed, including the Jumeirah Group hotel chain. Credit- default swaps rose almost four-fold in the past six months to 684 basis points, the highest in at least four years.

Dubai Holding Commercial Operations Co.'s 10-year bonds due 2017 fell 0.8 percent today, lifting the yield to a record 13.2 percent, Bloomberg data show.

``We are a very solid company and well diversified,'' bin Sulayem said. The notion of Dubai corporations having to rely on Abu Dhabi for funding ``is news to me,'' he said.
In a report obtained by the Financial Times, the ratings agency says Dubai would lack the financial muscle to cover its debt in the event of a systemic shock, such as a real estate collapse, making it reliant on Abu Dhabi to bail it out.

Publicly recorded debt levels have reached 103 per cent of 2006 GDP, the latest available figure, without including the leverage assumed by aggressive investment companies such as Istithmar and Dubai International Capital.

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Wednesday, October 08, 2008

This Picture Sums It Up.....

I´m a little bit busy during the last few days and this will probably last until the end of the week.... I´m trying to trade a bit and maybe pick up some bargains .... So don´t expect too much posting activity until next week.... In the meantime it is fun to revisit this famous DAX 8000 cover from one of Germans leading newspapers from 15 month ago..... :-) . Make also sure you visit this gallery of desperate stock traders & investors around the globe.....

Ich bin momentan leider sehr beschäftigt. Bei der Börsenlage sicher nicht weiter verwunderlich..... Ich werde versuchen etwas zu traden und anlagetechnisch etwas "shoppen" zu gehen .... Ist wohl ein besserer Zeitpunkt als der Focus diese inzwischen legendäre Titelgeschichte DAX 8000 vor 15 Monaten gebracht hat..... :-) Darüberhinaus sollte man einen Blick auf die Bilderserie von ziemlich geschockten und verzweifelten Anlegern und Tradern rund um den Globus.....Denke das ich ab dem Beginn der nächsten Woche wieder wie gewohnt regelmäßig posten werde....

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Sunday, October 05, 2008

German News Update......Hypo Real Estate Bailout

As expected the Hypo Real Estate bailout was announced before the markets open. At least the government has managed to bring the financial sector to take up to € 8.4 billion of the guarantee. On top of this i assume the step to guarantee all German banking deposits will force other countries to follow. What a difference a week makes..... Only a few days ago our leaders were ranting on the mess outside of Germany and especially the US........

Erwartungsgemäß wurde die Rettungsaktion vor Börseneröffnung verkündet. Immerhin hat der Staat es geschafft dem Finanzsektor noch eine Garantie von 8,4 Mrd € aus dem Ärmel zu leiern. Der Schritt praktisch alle Kundeneinlagen in Deutschland zu garantieren ist sicher mehr als nur als PR anzusehen . Obwohl es diverse Einlagensicherungsfonds gibt darf doch momentan zumindest daran gezweifelt werden das der Bankensektor von sich aus in der Lage ist die Kontrolle nicht noch mehr zu verlieren. Insofern wird diese Zusage sicher helfen den GAU eines Bankruns zu verhindern. Dies wird unweigerlich dazu führen das anderen Staaten nachziehen müssen um eine Kapitalflucht aus Ihren Ländern zu unterbinden. Siehe das Beispiel als irische Bnaken mit der Staatsgarantie massiv und offensiv um Einlagen britischer Banken geworden haben....... Schon erstaunlich welch Unterschied eine Woche ausmachen kann.... Noch vor wenigen Tagen hat sich Steinbrück derart abfällig über den Zustand des US Finanzsektors geäußert das eine gwisse Arroganz und Überheblichkeit nicht zu überhören war. Etwas mehr Demut hätte sicher gut getan.....

Dank an Hartgeld

Hypo Real Gets EU50 Billion Government-Led Bailout
Germany's financial industry agreed to double a credit line for Hypo Real Estate to 30 billion euros, Torsten Albig, a spokesman for Finance Minister Peer Steinbrueck, said late yesterday in an e-mailed statement. The federal government's guarantee for the credit line remains unchanged, Albig said.

Der vom Bund zur Verfügung gestellte Bürgschaftsrahmen von bis zu 35 Mrd. Euro werde nicht verändert. Bis zu einer Gesamthöhe von 14 Mrd. Euro trage der Finanzsektor 60 Prozent (das sind 8,5 Mrd. Euro) und der Bund 40 Prozent der möglichen finanziellen Belastungen, die sich aus einer Inanspruchnahme der Ausfallgarantie ergeben könnten.

> This piece from the NYT is the first and only detail that i have found as a cause for the liquidity shortfall. I´m still in the camp that the short term repofunding has played the major role for the needed baliout. ( see Hypo Real Estate And The Art Of Reading The Latest Interim Report..... )

> Der nachfolge Absatz aus der NYT ist der bisherher einzige Detailpunkt den ich haben finden können der erklärt warum die Depfa/HRE in Probleme gekommen sind. Ich bin nach wie vor der Überzeugung das eine weitere wesentlich Rolle die viel zu kurzfristige Refinanziereung über Repogeschäfte gespielt hat. ( siehe Hypo Real Estate And The Art Of Reading The Latest Interim Report..... )

NYTDepfa, a Dublin-based lender that Hypo acquired last year, is at the center of its problems. Depfa underwrote a package of municipal bonds which were subsequently downgraded by ratings agencies. That step obliged Depfa to buy the bonds back, a contractual requirement that would create almost immediate liquidity problems at Hypo itself, given the difficulty of getting short-term funding in today’s drumtight credit markets

Germany guarantees savings to avert panic Germany said on Sunday it would guarantee all private German bank accounts – currently worth €568bn – in a dramatic move to prevent panic withdrawals as fears over the worldwide financial crisis spread to Europe’s largest economy.

Merkel sagt Staatsgarantie für Spareinlagen zu
Die Bundesregierung sagte derweil am Sonntag aufgrund der Verschärfung der Finanzmarktkrise die Bereitschaft zu, angesichts der Krise der Finanzmärkte eine Staatsgarantie für alle privaten Spargeldeinlagen, Termineinlagen und Girokonten zu geben

Aus dem Finanzministerium hieß es, die Regierung übernehme damit eine Garantie, die über das Einlagensicherungssystem der Banken hinausgehe. Es gehe um eine Summe von 568 Milliarden Euro. Die Garantie gelte aber unbegrenzt

European leaders eye German moves UK and other European officials on Sunday expressed surprise at Germany’s abrupt move to guarantee German private bank accounts, amid concerns other European governments would have to follow Berlin’s lead and offer similar safeguards to savers, to avoid a cross-border flight of capital to more secure banks

One UK official said there was annoyance that German chancellor Angela Merkel had acted unilaterally only hours after attending an economic summit in Paris at which she agreed there should be greater cross-border co-ordination of measures during the economic crisis

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Saturday, October 04, 2008

Hypo Real Estate And The Art Of Reading The Latest Interim Report.....

I´m a little bit late on this story but this is indeed one more example of how incompetent the German "elite" is in dealing with the financial crises .....One week after one of the biggest bailouts in history with close to € 35 billion (it was still unclear how big the part from the German banking and finance sector and the taxpayer shoud habe been, rumors were running that the guarantee from the "private" sector was € 8 billion and the rest was provided via the German taxpayer ) and calming words that this should be well enough for the "foreseeable" future it looks like at least one bank ( Deutsche Bank ) that was involved in providing one part of the guarantee had finally gotten the time to read the latest report........ Very difficult for the German elite ( banking, oversight, Bundesbank, politicians etc ) to see at first glance that the proposed number would carry the HRE only over the next 3 month..... If you want to laugh out loud i highly recommend to read the "risk report" on page 24 in the latest HRE Interim Report at June 30, 2008.... Looks like we will get the "mother of all German bailouts" before the asian markets will be open for trading......

Ich habe aufgrund der überaus hektischen letzten Börsenwoche leider keine Zeit gehabt das Thema HRE zu beackern. Ich verweise daher dringend auf den Blogger "Weissgarnix" der bereits als die erste Meldung über den Bailout über die Ticker lief die heutigen Ereignisse vorhergesagt hat. Genießt bitte in der Reihenfolge seine Berichterstattung zu dem HRE Debakel
1. HRE - Da kömmt noch (viel) mehr!
2. Lesestoff für klagefreudige HRE-Aktionäre
3. Avanti Dilettanti!

Wer zudem noch gute Science Fiktion lesen möchte dem empfehle ich anstelle Perry Rhodan den letzten HRE Zwichenbericht zum 30.06.2008... Mehr an der Wirklichkeit vorbei geht nun wirklich nicht...... Tippe mal das wir noch bevor die Asiatischen Börsen den Handel eröffnen die "Mutter aller Deutschen Bailouts" sehen werden ......

It is a irony and a farce that 2 ( HRE & the merged Depfa ) of the biggest supporters & cheerleaders of the "Pfandbrief" ( covererd bond ) with the supposed highest safety standarts are running into funding problems..... But it looks like they have choosen to get a little bit of extra yield in ramping up their repo funding a whopping 41% since the end of 2007 to € 89 billion ( see Page 27 HRE Analyst Presentation ) while their long term covered funding is flat since the end of 2006.....
Quote CFO at this presentation " We take advantage of the very favourable conditions of the repo market....."

But what else do you expect from a management that had this to say back in January Hypo Real Estate Crashing 35%...CEO "We Did A Fantastic Job"......

Zudem möchte ich noch darauf hinweisen das es einer gewissen Ironie und Tragik gleichkommt, das ausgerechnet zwei ( HRE plus übernommene Depfa ) der größten und strärksten Befürworter im Pfandbriefmarkt der ja bekanntermasen eines der sichersten Anlageinstrumente unsere Zeit ist, in Refinanzierungsprobleme gelaufen sind. Normalerweise dürften sich die Pfandbriefe gerade in dieser Zeit ungebremster Nachfrage erfreuen. Dummerweise sieht es für mich so aus als wenn das vollkommen inkompetente Management der HRE/Depfa wohl wegen eines minimalen Zinsvorteiles die Ausweitung des Geschäftes einzig und allein mit der Refinanzierung durch Repos ( 44% seit Ende 2007 auf sagenhafte 89 Mrd € ) zu stemmen versucht ( siehe Seite 27 HRE Analysten Präsentation ) während die langfristige Finanzierung durch Pfandbriefe / Covered Bonds seit Ende 2006 unverändert geblieben ist.

Zitat aus der dazugehörigen Telefonkonferenz "Wir haben die sehr vorteilhaften Bedingungen des Repomarktes ausgenutzt........"

Aber was sonst soll man auch von einem Management erwraten das im Januar dieses Zitat rausgehauen hat Hypo Real Estate Crashing 35%...CEO "We Did A Fantastic Job"......

Hypo Real Estate Rescue at Risk as Banks Withdraw Their Support Bloomberg
Hypo Real Estate Holding AG, the ailing German property lender, said a 35 billion-euro ($49 billion) government-backed bailout plan collapsed as commercial banks withdrew their support.

``The bank is in a very difficult situation,'' Hypo Real Estate spokesman Hans Obermeier said in a telephone interview. ``We hope everyone involved in the discussions is aware of this.''

German authorities brokered the Sept. 28 bailout to avoid economic damage that would have resulted from the failure of the nation's second-biggest property lender. Hypo Real Estate said in a statement late yesterday that ``alternative measures are being investigated.''

Hypo Real Estate's financing needs exceeded the bailout plan guarantee, Germany's Die Welt reported yesterday, citing unnamed people in the finance industry. It will need 20 billion euros by the end of next week and 50 billion euros by the end of the year, according to the newspaper. As much as 100 billion euros may be needed to shore up the bank's finances by the end of 2009, Die Welt said. Obermeier declined to comment.

The European Central Bank and the Bundesbank planned to contribute jointly 20 billion euros, and a group of unidentified banks another 15 billion euros. The plan called for Hypo Real Estate to use 42 billion euros in assets, mostly debt owed by government borrowers, as collateral.

Heiner Herkenhoff, a spokesman for the German BDB banking association, declined via e-mail to comment. Bundesbank spokesman Christian Burckhardt and the German Finance Ministry didn't return calls seeking comment.

Shut Out
The bank sought the lifeline after its Dublin-based Depfa Bank Plc unit, which specializes in government lending and depends on now-closed money markets for funding, failed to get short-term funding amid the credit crunch.

Failure to provide the rescue package ``may have triggered unpredictable consequences for the German financial and economic system similar to those of the collapse of U.S. financial group Lehman Brothers,'' Frankfurt-based Bundesbank and BaFin, Germany's financial regulator, said in a joint letter dated Sept. 29 and addressed to Finance Minister Peer Steinbrueck.

``If we had not acted, the bank's crisis wouldn't have just hurt the financial sector, but its network of business would have hurt the real economy, in Germany and beyond,'' German Finance Minister Peer Steinbrueck said the same day.

Hypo Real Estate, run by Chief Executive Officer Georg Funke since it was spun off from HVB Group in 2003, reported writedowns on collateralized debt obligations on Jan. 15. The company said Aug. 13 that second-quarter pretax profit plunged 95 percent because of further markdowns on debt.

Flowers Investment
A group led by J.C. Flowers & Co., the buyout firm run by Christopher Flowers, bought a 24 percent stake in Hypo Real Estate for about 1.13 billion euros in June.

Former parent HVB Group is now a unit of UniCredit SpA, Italy's biggest lender, which is holding an extraordinary board meeting today to boost its regulatory capital and settle investors' concern with its finances.

The global financial crisis that prompted Lehman Brothers Holding Inc.'s Sept. 15 bankruptcy filing is weighing on Europe. Belgian authorities are exploring ``all methods'' to keep Fortis in business even after it received an 11.2 billion-euro government bailout on Sept. 28. Belgium and France on Sept. 30 threw Dexia SA a 6.4 billion-euro lifeline.

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Friday, October 03, 2008

Clusterf#@k to the Poor House - Bailout Bill Passes / Daily Show

This sums it up.... It looks like McCain has some kind of Amnesia or Alzheimer within one Interview.... Stunning....Have a nice weekend....

Nette Zusammenfassung... Es sieht ganz so aus als McCain an schwerem Alzheimer leidet... Anders sind die Aussagen in einem nur einzigen Interview nicht zu erklären.... Erschreckend ( selbst im Verhältnis zu dem was man von deutschen Politikern so hört ) ......Allen ein schönes Wochenende und einen schönen "Tag der Deutschen Einheit"....

Formidable Opponent - Business Syphilis
Business syphilis infects the market after a corporate orgy.

On top of this a nice rant from Rep. Peter DeFazio (D-Oregon) via Tim from The Mess That Greenspan Made

Hier kommt ein sehr treffender Kommentar von Rep. Peter DeFazio (D-Oregon)via Tim von The Mess That Greenspan Made

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Thursday, October 02, 2008

Chart Of The Day " Depression Index"

I´m not sure if this qualifies for a contrary indicator but the pessimism, fear & volatility are all reaching new historic highs ( see latest cover from Time & Economist & someone told me that even Cramer is telling people to get out of stocks......) signalling maybe a short term bottom or bounce..... Emphasis is on short term.... Either way you look at this it is definitely not a bad time to be a labaled as a notorious Goldbuck..... :-)

Bin mir nicht sicher ob dieser Indikator als ausreicht um als Kontraindikator zu gelten. Wenn man diesen aber mit der allgemeinen Stimmungslage, der umgehenden Angst ( siehe hierzu auch die wunderschönen und treffenden Cover von Time & The Economist ) und der extrem hohen Volatilitätä kombiniert könnte es gut sein das zumindest kurzfristig das schlimmste überstanden ist..... Betonung liegt wohlgemerkt auf kurzfristig...... Unabhängig davon gab es wohl selten eine bessere Zeit als "Goldbuck" beschimpft zu werden...... :-)

Echoes of the Depression / 1929 and all that Economist

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