happy holidays / frohe feiertage
ich wünsche allen frohe und gesunde feiertage sowie einen "guten rutsch" ins neue jahr. in sachen postings herrscht bis zum 1.1 eine weile ruhe.
Gold...The Ultimate Triple-A Asset
Trying to assess the impact of flat or lower home prices on consumer spending is more of a walk in the dark. A large part of the problem is that there is no U.S. precedent for the current conjunction of a housing correction, a personal savings rate of zero and the uncertainty created by the boom in mortgage equity withdrawal (MEW) in recent years and its uncertain relationship with consumer spending. Therefore, it is necessary to be modest in making a forecast.(better be realistic.../ lieber realistisch...)
PIMCO’s forecast of a U.S. soft landing includes the expectation of a moderate slowdown in consumer spending next year, with the negative ongoing impact from the housing market partially offset by wage growth and the boost to real incomes from lower energy prices. But there is a great degree of uncertainty in the outlook.......
The wealth effect from rising asset prices, and the greater ease of liquefying house price gains, has meant that, in aggregate, U.S. households have stopped saving out of income. Savings rates are hard to forecast, but the current stagnation of house prices and a reassessment of the rate of future house price appreciation will put upward pressure on the savings rate over time. ( fro here on there is only one way t go..., kann eh nur noch nach oben gehen....)
U.S. consumer spending has proved largely impervious to the forces of gravity in recent years. If MEW turns out to have been an important driver of consumer spending, then the leveling off of house prices and associated drop in equity withdrawal may have a more direct, mechanical and pronounced impact on consumer spending. .....(i´m reading this correct. they put an if in front of the mew impact. what a joke. just look at the mew impact on gdp.../ kann meinen augne nicht glauben. die stllen in ihrer vorhersage für 07 den einfluß des mew in frage. bei dieser grafik schwer zu verstehen.....)
The experience of the U.K. and Australia offer both comfort and warning. Consumer spending growth decelerated when the housing markets slowed in those countries in 2004-2005, but it did not grind to a halt. But it is not clear how useful those examples will prove as guides. The U.K. was helped by buoyant global growth and Australia by the commodities boom. Neither had the same huge rise in housing inventory that we have seen in the U.S.
Global Spillover Risk
Canada and Mexico are the economies most directly exposed to weaker U.S. growth. But in thinking about the impact of a weaker U.S. growth impulse on the global economy, direct trade links are only the starting point.
Figure 5 summarizes the ways in which weaker U.S. growth can impact the global economy, including trade, business confidence and a broad array of financial market linkages. Indeed, U.S. economic data and associated market movements at turning points in the U.S. cycle tend to have a greater impact on Eurozone and Japanese markets than the local data. ......
the Eurozone is experiencing another form of spillover, in the form of the euro’s appreciation against the dollar.
A U.S. slowdown as a result of a U.S.-centric housing correction is very different to the 2001 experience of a common shock in the form of a stock market/capital spending bust. While business investment is strong in the Eurozone and Japan, it is vulnerable in the event that below-consensus U.S. growth feeds into weaker business confidence around the globe.....
.... As for monetary policy, one question is how long the window of opportunity remains open for the Bank of Japan and possibly the European Central Bank to raise rates further. Fed rate cuts would send a signal of external risks. In the event of weaker than expected growth, the BoJ will be extremely reluctant to cut rates and past experience would suggest that the ECB would be in no hurry at all to react.
Monetary policymakers in English speaking countries, which are further ahead in the rate cycle and, like the Fed, currently focused on near-term inflation risks, would be the first to follow the Fed’s lead.
China has provided an increasingly important source of demand growth in Asia owing to its rapid economic expansion and openness to trade. The U.S. has accounted for about 20% of overall global growth since 2002, measured at purchasing power parity (PPP) exchange rates, while China has contributed 30% of global growth. ......In spite of its rapid growth, in nominal U.S. dollar terms, China’s economy is not much larger than the U.K.
Since trade accounts for such a large share of China’s economy, the gap with the U.S. in terms of imports is much narrower than the GDP gap. In October, U.S. imports were worth about $182bn while China’s came in at about $64bn. But a large share of that import bill represents intermediate goods shipped in from China’s neighbors to be re-exported in the form of finished goods to the U.S., meaning that independent of the Chinese authorities’ efforts to slow investment spending, slower U.S. growth should have an impact on Chinese import demand. The U.S. trade deficit stood at $59bn in the month of October. China’s trade surplus was $24bn. Over time, continued growth and a shift towards consumption will mean that China will indeed emerge as a second global bass drum. For now it is the high-hat cymbal.
To give an idea of the amount of ground that would have to be made up in the event of a more pronounced slowdown in U.S. consumer spending, it is worth noting that U.S. consumer spending accounts for about 21% of world GDP, compared with 14% for the Eurozone and a similar amount for the whole of Asia, including Japan and China. As for the oil exporting countries, the OECD2 points out that in spite of the big rise in petrodollars over the past few years, merchandise exports from its member countries to OPEC have been decelerating since early 2005. Oil exporters have taken over from developing Asian nations as the largest component of the global savings glut, measured by their combined current account surpluses.http://immobilienblasen.blogspot.com/2006/12/petrodollar-pegor-why-all-talk-about.html
Over time, strong growth in China and other emerging market countries will reduce the role of the U.S. in setting the global tempo – a long-term decoupling. ....... Every country can’t run a current account surplus: the world is a closed economy.
klasse zusammenfassung über das zusammenspiel von krediten und anderen vermögenswerten. die ersten probleme im aktienmarkt werden sicher mit problemen wie ausfällen oder einem ansteig der spreads im kreditmarkt einhergehen.GENTLEMEN prefer bonds. If you look round the world for speculative excess at the end of 2006, there are many more signs in the supposedly staid world of debt than in the stockmarkets.(unfortunately they are closely correlated, dummerweise hängen diese beide eng miteinander zusammen)
zuallererst muß man sagen das es eh ein witz ist das ne firma wie fannie die über mehrere jahre keine bilanzen vorlegen konnte und ne berichtigung von über 6 mrd $ vornehmen mußte ein wichtiger spieler im sub prime markt ist. die kreditgeber können ihre "schrottkredite" nicht schnell genug aus ihren büchern tilgen. da paßt es gut wenn ne "halbstaatliche" organisation alles was bei 3 nicht auf den bäumen ist aufkauft und damit ins risiko geht. kein wunder das diese geschichte ausser kontrolle geraten ist.
Congress created Washington-based Fannie Mae and McLean, Virginia-based Freddie Mac to expand homeownership by increasing mortgage financing and provide market stability. ( bur a what price.../ aber zu welchen preiß....).
.....They've turned to the market because of narrower spreads on their own securities and rising regulatory targets on how much financing they must provide to low-income borrowers.
The typically largest floating-rate AAA classes were sold last week at spreads of 20 basis points, the least this decade, Friedman Billings' Youngblood said in an interview. Spreads on top-rated sub-prime bonds haven't widened because rating firms have required them to be protected against large losses, he said.
Even if spreads on AAA sub-prime bonds widen due to less demand, the credits are still sound, according to Youngblood.
``I can't envision anything short of the Great Depression of the 1930s that would bring into question the interest and principal of AAA classes,'' ......and wee all know that youngblood is always right....http://immobilienblasen.blogspot.com/2006/07/fundstck-des-tages.html
Letters from Ofheo to Fannie Mae and Freddie Mac don't explicitly say they must apply bank regulators' guidance to bond purchases.(read this twice!) The regulator does expect them to develop systems that ensure they avoid buying securities with loans not conforming to the directive, according to Corinne Russell, a spokeswoman (like the acounting model..... :-), wie das buchführungsprogramm....;-)
Non-agency securities make up about 40 percent of the U.S. mortgage-bond market. About 15 percent of Fannie Mae's $725.5 billion mortgage portfolio, or $108.6 billion, was made up of such securities on Sept. 30, compared with 13 percent, or $97.8 billion, a year earlier. About 33 percent of Freddie Mac's portfolio, or $235.7 billion, was made up of them on Oct. 31, compared with 34 percent, or $232.4 billion, a year earlier.
the grey is showing past recessions / das grau markiert vergangene rezessionen
U.S. building permits down 31.3% year-over-year
U.S. housing starts down 25.5% year-over-year
U.S. Nov. building permits fall to 9-year low.
U.S. Nov. building permits short of 1.55 mln expected
U.S. Nov. housing starts exceed 1.54 mln expected.
U.S. Nov. building permits fall 3% to 1.506 mln pace.
U.S. Nov. housing starts up 6.7% to 1.588 mln pace
Building permits are down 31.3% in the past year and are down 14.1% in the first 11 months of 2006 compared with the same period in 2005.
Regionally, starts rose 8.6% in the Northeast and rose 18.5% in the South. Starts fell 6.3% in the Midwest to the lowest level in 15 years. Starts fell 8.1% in the West to the lowest level in five years.
much more details and charts as always from "calculated risk!"
|EPS Trends||Current Qtr|
|7 Days Ago||1.05||0.49||4.97||2.84|
|30 Days Ago||1.07||0.51||5.00||3.13|
|60 Days Ago||1.07||0.51||5.00||3.18|
|90 Days Ago||1.08||0.52||5.02||3.29|
"We did not anticipate the suddenness or magnitude of the fall in pricing that occurred this year in many of our communities. Our profitability and the pace of new home sales in our markets continues to be adversely impacted by high contract cancellation rates, increases in the number of resale listings and increases in the number of new homes available for sale," Mr. Hovnanian said. The Company's contract cancellation rate for the fourth quarter was 35%, compared with 25% in the fourth quarter of 2005 and a 33% rate reported in the third quarter of fiscal 2006.
"In the fourth quarter, we decided to walk away from $141 million in land deposits and predevelopment costs and took impairment charges of $174 million,"
the Company had 60,714 lots held under option contracts and controlled a total of 94,618 lots, a 22% decline
For the first quarter of fiscal 2007 we anticipate modest earnings of between $0.05 and $0.10 (estimate 0,45)
We anticipate that our average ratio of net recourse debt to capitalization will average close to our target of 50% during fiscal 2007
gross margin including interest 17,7 in vs 24,7 in q4 2005!
interest capitalized up over 100%!!!! to 103 m$
mortage loans held for sale up 33% to 282 m$. (problems in the mbs market!?, maybe charges needed.....)
net contracts in the southeast down 77%!
backlog in the west down over 60%
and take this: crispy from the http://bakersfieldbubble.blogspot.com/ has researched the cash flow from operations in the last 5 quarters ! lots of read inc............
click here!" to see the bloodbath/details.......
update after the call.
disclosure: short hov
glücklicherweise diesesmal nur ein finanzieller tsunami der zudem überwiegend ausländische invetsoren/spekulanten trifft. in jedem fall ist das ein dramatischer zug der beim letzten mal große verwerfungen über das jeweilige land hinaus ausgelöst hat. immerhin werden jetzt evtl auch mal wieder risiken aufgezeigt die momentan bei fast jeder assetlkasse keine rolle zu spielen scheinen. die vola wird sicher steigen udn einige hedge fonds werden sicher massive probleme bekommen. ( kein mitleid...)
Dec. 19 (Bloomberg) -- Thai stocks plunged the most in at least 19 years, triggering declines across Asia, after the central bank said international investors must pay a 10 percent penalty unless they keep funds in the country for a year.
i suggest to see the "full video!" (3 minutes. lots of fun!
unbedingt das video ansehen. ist fats ne art wunder das in der show auch wirklch bären auftreten. sonst sind doch alle irgendwie bullish. ist schließlich fox.........
thanks to tim und fred i mellerud. "transcript and tims insights here"
that is happening at the same time when US credit quality in 25-year retreat toward junk-S&P. amazing!
das ganze passiert zeitgleich mit ner rapiden verschlechterung der kreditratings in den usa. erstaunlich!
this point is so importend because the pe firms didn´t really have to make an exit to get gigantic return. they just load the company up with tonns of debt to get an "extra dividend"
The debt of companies owned by buyout firms has risen to the equivalent to 5.4 times their cash flow (some deals in the last time have had even higher multiples!einer der letzten deals hatten noch höhere multiples), the most ever, S&P says. here are some examples like hertz etc
(time to call the stuntmen.../ zeit den stuntmen zu rufen)
Since buying Hertz, the Clayton Dubilier ownership group has raised debt by $3.4 billion and shaved cash and cash equivalents almost in half.
In a leveraged buyout, the acquirer borrows most of the purchase price and uses the target company's cash flow to repay lenders
The owners have received a dividend of $1 billion and plan to get another payout of about $420 million (and still they have managed to take this company public)
(Reuters) - The massive funds raised by private equity firms and the faster-than-expected speed with which they're spending them are stretching some of their investors thin, causing concern that there won't be enough money to go around in 2007.
evtl. können dann ja die zentralbanken diese lücke füllen..... :-), so groß ist der schritt vn fannie mae papieren nicht mehr........