Mr. KnowItAll
17.03.2001, 18:05
x
Vollständige Version anzeigen : Game-Over für Buy and Hold Investoren?
Ralph
17.03.2001, 22:03
Hi KIA,
ich bin der Ansicht, dass die Technologiewerte noch ein längeres Jammertal vor sich haben werden, da der Abbau der enormen Überkapazitäten (aufgebaut in 10 Jahren Boom) länger dauern wird, als viele erahnen ... vielleicht sogar Jahre.
In weiten Teilen des Tech-Sektors inkl. Telekom, sehen wir sekulare Abwärtstrends, die teilweise Jahre dauern werden, bis sie ihr Tief erreicht haben ..... Zinssenkungen helfen da nur sehr bedingt. Zu einem solchen Bereich gehört die Telekommunikationsbranche, und damit auch deren Zulieferer (z.B. die heissgeliebten Optic Fiber-Werte) .... aber das sagt einem ja keiner !
Hinzukommt, dass wir in Technologie "ersaufen" ..... Neuinvestments werden nur sehr gering -wenn überhaupt- getätigt. Wir haben mehr Rechnerpower auf dem Schreibtisch, als wir jemals brauchen. Im Kommunikationsbereich ist es genauso.
Daraus leitet sich dann m.E. auch ab, dass eine Buy-and-Hold-Strategie eigentlich nicht das richtige ist ..... vor allem dann nicht, wenn man nur Technologie denkt.
Ich gehe soweit zu sagen, dass der , der nicht traden kann/will, sich von der Börse im Moment vollkommen fernhalten sollte.
Ich vertrete die Meinung, dass wir auf keinen Fall, die V-Erholung sehen werden ..... ich präferiere eher die L-förmige, wobei nicht klar ist, wie lange der untere Teil des "L" dauert bzw. wo er anfängt. Ausserdem bin ich der Ansicht, dass wir auch auf KEINEN Fall den erhofften "Big Bang" sehen werden (Crash und Erholung an einem Tag), sondern wir werden jammernd und wimmernd am Boden liegen ..... wie lange und wo weiss ich nicht, aber ich habe eine Meinung (und die könnte im NASDAQ bei 1350 sein). Der grosse Knall ist die Wunschvorstellung der Analysten und einiger Unbedarfter, die glauben, sie könnten es vorhersagen.
Wenn man sich die Charts von den 1930ern anschaut, dann stellt man fest, dass erst Jahre später ein wirklicher Boden ausgebildet wurde .... in der Zischenzwit konnte man mit Buy-and-Hold nur Geld verlieren.
In einer Phase der Hysterie ist sowieso nicht der optimale Zeitpunkt zu Kaufen (längerfristig). Denn der hysterische Verkäufer wird immer wieder zurückkommen, und der Käufer kann immer tiefere Kurse abwarten.
Ausserdem verfällt man bei BTH zu leicht in den Fehler, dass man sehr schnell anfängt "längerfristig" zu denken, weil man seine eigenen Fehler nicht einsehen will/kann.
Hier mal ein paar Charts, von Gary B. Smith kommentiert .... alle aus den 30ern.
http://members.tripod.de/ProfitGalore/30-1.gif
http://members.tripod.de/ProfitGalore/30-2.gif
http://members.tripod.de/ProfitGalore/30-3.gif
http://members.tripod.de/ProfitGalore/30-4.gif
http://members.tripod.de/ProfitGalore/30-5.gif
http://members.tripod.de/ProfitGalore/30-6.gif
http://members.tripod.de/ProfitGalore/30-7.gif
Für mich kommt Buy-and-Hold in nächster Zeit nicht in Frage !
Ralph
ich bin der Ansicht, dass die Technologiewerte noch ein längeres Jammertal vor sich haben werden, da der Abbau der enormen Überkapazitäten (aufgebaut in 10 Jahren Boom) länger dauern wird, als viele erahnen ... vielleicht sogar Jahre.
In weiten Teilen des Tech-Sektors inkl. Telekom, sehen wir sekulare Abwärtstrends, die teilweise Jahre dauern werden, bis sie ihr Tief erreicht haben ..... Zinssenkungen helfen da nur sehr bedingt. Zu einem solchen Bereich gehört die Telekommunikationsbranche, und damit auch deren Zulieferer (z.B. die heissgeliebten Optic Fiber-Werte) .... aber das sagt einem ja keiner !
Hinzukommt, dass wir in Technologie "ersaufen" ..... Neuinvestments werden nur sehr gering -wenn überhaupt- getätigt. Wir haben mehr Rechnerpower auf dem Schreibtisch, als wir jemals brauchen. Im Kommunikationsbereich ist es genauso.
Daraus leitet sich dann m.E. auch ab, dass eine Buy-and-Hold-Strategie eigentlich nicht das richtige ist ..... vor allem dann nicht, wenn man nur Technologie denkt.
Ich gehe soweit zu sagen, dass der , der nicht traden kann/will, sich von der Börse im Moment vollkommen fernhalten sollte.
Ich vertrete die Meinung, dass wir auf keinen Fall, die V-Erholung sehen werden ..... ich präferiere eher die L-förmige, wobei nicht klar ist, wie lange der untere Teil des "L" dauert bzw. wo er anfängt. Ausserdem bin ich der Ansicht, dass wir auch auf KEINEN Fall den erhofften "Big Bang" sehen werden (Crash und Erholung an einem Tag), sondern wir werden jammernd und wimmernd am Boden liegen ..... wie lange und wo weiss ich nicht, aber ich habe eine Meinung (und die könnte im NASDAQ bei 1350 sein). Der grosse Knall ist die Wunschvorstellung der Analysten und einiger Unbedarfter, die glauben, sie könnten es vorhersagen.
Wenn man sich die Charts von den 1930ern anschaut, dann stellt man fest, dass erst Jahre später ein wirklicher Boden ausgebildet wurde .... in der Zischenzwit konnte man mit Buy-and-Hold nur Geld verlieren.
In einer Phase der Hysterie ist sowieso nicht der optimale Zeitpunkt zu Kaufen (längerfristig). Denn der hysterische Verkäufer wird immer wieder zurückkommen, und der Käufer kann immer tiefere Kurse abwarten.
Ausserdem verfällt man bei BTH zu leicht in den Fehler, dass man sehr schnell anfängt "längerfristig" zu denken, weil man seine eigenen Fehler nicht einsehen will/kann.
Hier mal ein paar Charts, von Gary B. Smith kommentiert .... alle aus den 30ern.
http://members.tripod.de/ProfitGalore/30-1.gif
http://members.tripod.de/ProfitGalore/30-2.gif
http://members.tripod.de/ProfitGalore/30-3.gif
http://members.tripod.de/ProfitGalore/30-4.gif
http://members.tripod.de/ProfitGalore/30-5.gif
http://members.tripod.de/ProfitGalore/30-6.gif
http://members.tripod.de/ProfitGalore/30-7.gif
Für mich kommt Buy-and-Hold in nächster Zeit nicht in Frage !
Ralph
Gast_B
17.03.2001, 23:52
Hi,
meine Meinung/Befürchtung stimmt völlig mit Ralphs Aussagen überein. Dem ist eigentlich nichts hinzuzufügen.
Vielleicht noch eins... Ich habe immer wieder den Eindruck, dass es noch Unmengen von Anlegern gibt, die immer noch überzeugte Bullen sind. Sei es aus Wunschdenken heraus oder einfach aus Gewohnheit („buy the dip“ war über viele Jahre hinweg die richtige Strategie gewesen und man will an Altbewährtem festhalten statt sich die Mühe machen umzudenken). Resultat ist, dass es sich noch sehr sehr lange hinziehen kann, bis die letzten aus dem Markt geschüttelt sind! Und man schaue sich auch nur mal die Reaktionen auf richtig positive News an (z.B. überraschende Zinssenkung im Januar)... Panikkäufe... als gäbe es morgen keine Aktien mehr. Ich meine daraus schließen zu können, dass die Angst Rallies zu verpassen immer noch der vorherrschende Gedanke im Markt ist. Erst wenn dieser abgelöst wird durch die nackte Angst, das noch verbliebene Kapital auch noch zu verlieren, dann könnte ich mir eine Wende vorstellen.
Grüße
Brigitte
meine Meinung/Befürchtung stimmt völlig mit Ralphs Aussagen überein. Dem ist eigentlich nichts hinzuzufügen.
Vielleicht noch eins... Ich habe immer wieder den Eindruck, dass es noch Unmengen von Anlegern gibt, die immer noch überzeugte Bullen sind. Sei es aus Wunschdenken heraus oder einfach aus Gewohnheit („buy the dip“ war über viele Jahre hinweg die richtige Strategie gewesen und man will an Altbewährtem festhalten statt sich die Mühe machen umzudenken). Resultat ist, dass es sich noch sehr sehr lange hinziehen kann, bis die letzten aus dem Markt geschüttelt sind! Und man schaue sich auch nur mal die Reaktionen auf richtig positive News an (z.B. überraschende Zinssenkung im Januar)... Panikkäufe... als gäbe es morgen keine Aktien mehr. Ich meine daraus schließen zu können, dass die Angst Rallies zu verpassen immer noch der vorherrschende Gedanke im Markt ist. Erst wenn dieser abgelöst wird durch die nackte Angst, das noch verbliebene Kapital auch noch zu verlieren, dann könnte ich mir eine Wende vorstellen.
Grüße
Brigitte
KA111
18.03.2001, 02:47
Es wird bei dem derzeitigen stark instabilen globalen Finanzsystem in nächster Zeit kein Börsenklima zustande kommen, bei dem "buy and hold" eine vertretbare Strategie wäre. Danke, KIA für das sensitive Zitat. :D
Den folgenden Artikel habe ich, man sollte es nicht glauben, stark gekürzt.
Er enthält m.E. viele wissenswerten Details über zentrale Zusammenhänge.
The Credit Bubble Bulletin - by Doug Noland
Global System Instability
March 16, 2001
With recognition of the seriousness of the unfolding global financial crisis beginning to take hold, the Dow ended the week with a loss of almost 8%, the largest decline since October 1989. Across the board, it was bear market action. For the week, the S&P500 dropped 7%, the Transports 10%, the Morgan Stanley Cyclical index 9%, and the Morgan Stanley Consumer index 8%. The Utilities declined 5%, while the small cap Russell 2,000 and the S&P400 Mid-Cap indices both declined 7%. Tech stocks were hammered once again, with the NASDAQ100, Morgan Stanley High Tech and Semiconductor indices all sinking 9%. The Street.com Internet index sank 13% and the NASDAQ Telecommunications index dropped 11%. Financial stocks generally outperformed, with the Bank and Securities Broker/Dealer indices declining 6%. The HUI gold index sank 11% this week.
Gold reversed sharply this week, with bullion prices dropping better than $13. With global currency markets in disarray, the dollar won by default. The dollar index surged almost 4% this week.
"Jobless Surge as Dollar Hits New Depths" was the headline for the lead story in yesterday’s Sydney Morning Herald. "Japan banks on the edge – Japan’s banks headed for a crisis which threatens world currency stability…" also made the front page. Around the world, it is becoming apparent that global financial crisis has taken a decided turn for the worst. Today, the Brazilian real dropped almost 2% to its lowest level since March of 1999, this just one day after the Brazilian central bank intervened to support the real for the first time in 14 months. Concerns grow of the more than $140 billion of external debt borrowed by companies in Brazil. Fears are increasing of acute financial crisis in Argentina and Latin American bonds. The major markets in Brazil and Argentina trade poorly throughout. Argentina peso futures contracts trade with heightened premiums reflecting growing concern of a breakdown of the country’s currency board. Governments and corporations in Argentina have significant foreign denominated debt.
One can certainly get a feel for the global nature of the current crisis by scanning today’s headlines from Bloomberg News: "Canadian Dollar Drops Near Record Amid Concern about Stocks and Economy"; "Australian Dollar Falls on Concern Government Set to Lose Parliament Seat"; "Korean Won, Taiwan Dollar Decline as Weak Yen Curbs Demand for Exports"; "Thai Baht Falls to Three-Month Low as Central Bank Says It’s Not Worried"; "Venezuela Unemployment Rate Surges to 15.8% in January From December’s 10%"; "Philippine Unemployment Rate Rises in January to 11.4%, a Nine-Month High" "Argentine Bonds Plunge on Concern Economy Plan Won’t Get Political Support"; "Turkish Economic Program Hinges on Lenders Providing Up to $25 Billion"; and "Euro Suffers Worst Weekly Drop Against the Dollar." In the US, a disconcerting headline has "Edison, PG&E Stocks and Bonds Drop on Fear of Bankruptcy." With significant exposure to a California utility bankruptcy in money market funds, this situation should be monitored closely. At the same time, American credit data turns more ominous by the week.
Yesterday, the Mortgage Bankers Association reported a sharp and broad based increase in mortgage delinquencies. The delinquency rate for "one-to-four unit residential properties" jumped 50 basis points to 4.54% during the fourth quarter. "The increase in the delinquency rate is significant but not a surprise given the fourth-quarter economic slowdown," said Douglas G. Duncan, MBA's chief economist. "Real GDP growth was only 1.1 percent in the fourth quarter, the slowest pace in six years. And rising energy prices also cut into homeowners' disposable income and ability to pay." Importantly, the fourth quarter marked the third consecutive quarterly increase in delinquencies. "After falling 71 basis points from the first quarter of 1998 through the first quarter of 2000, the delinquency rate over the past three quarters has risen by 82 basis points."
Also yesterday, the American Bankers Association (ABA) reported credit card delinquencies of 3.34% at the end of the year, an increase from 3.93 percent in the third quarter. We expect a surge in credit card delinquencies going forward.
And while consumer debt problems are in the very early stages, the unfolding corporate debt debacle seems to worsen by the month. It is worth mentioning an article yesterday from BusinessWire: "Fitch: One For History Books; 1st Qtr Defaults To Exceed $20B. On the heels of a record setting $27.9 billion in default volume for the year 2000, high yield defaults soared to $12.8 billion for the first two months of 2001. February produced $9.4 billion in defaults, driving the LTM high yield default rate to 6.7% compared to 5.3% in January March, fallen angel Finova Capital filed for Chapter 11 protection, placing an additional $6 billion of bonds in default. Excluding fallen angels, the LTM high yield default rate through February stood at 5.4% compared to 4.6% for full year 2000 ."
Yesterday’s current account report from the Commerce Department is another document for the "time capsule." For the year, the U.S. current account deficit surged 31% to $435.4 billion, more than 4% of GDP (for comparison, it was about $110 billion during 1995), up sharply from 2.5% of GDP as recently as 1998. For the year, the profligate US economy imported about $1.22 trillion of goods (19% year-over-year increase), almost $450 billion more than it exported. Yet, despite this massive deficit, "US owned assets abroad" jumped $553 billion (compared to $430 billion in 1999 .Big increases, however, were reported in the categories "US claims on unaffiliated foreigners reported by US nonbanking concerns" and "US claims reported by US banks." The first category had a net increase of $157 billion (up 70% from 1999’s increase of $92 billion) and the second $124 billion (up 58% from 1999’s increase of $70 billion).
With huge foreign bound outflows and a truly massive current account deficit, the offsetting foreign source inflows have grown to simply unimaginable proportions. "Foreign-owned assets in the United States" increased $952 billion during the year 2000, up 26% from 1999’s increase of $754 billion. And while "foreign official assets in the United States" increased about $30 billion (compared to 1999’s $33 billion), "other foreign assets in the United States" ballooned a stunning $917 billion (up 29% from 1999’s $711 billion). During the fourth quarter alone, "other foreign assets in the US" increased $280 billion (up almost 80% from 1999’s Q4 increase of $157 billion). For year-2000 by category, direct investment totaled $317 billion (up 15% from 1999’s $276 billion); holdings of US Treasuries actually declined by $52 billion (compared to 1999’s decline of $20 billion) and US currency sent abroad increased $1 billion (compared to 1999’s increase of $22 billion). The key to this amazing story (trading securities for goods!) is the massive foreign purchases of "US securities other than US Treasury securities." At an astounding $466 billion for the year, these net purchases were up 41% from 1999’s record of $332 billion. For now, the worldwide flood of dollars flows right back into agency and other US securities. Also, importantly, "US liabilities to unaffiliated foreigners reported by US nonbanking concerns" jumped $106 billion (up 208% from 1999’s $34 billion increase), while "US liabilities reported by US banks" increased $79 billion (up 18% compared to 1999’s $67 billion).
This data is evidence of unprecedented financial credit excess. Further, capital movements of this magnitude and character are almost certainly "hot money" speculative flows emanating from credit excess at home, in Europe and, increasingly, from the UK and off-shore banking centers. With this in mind, the unfolding global financial crisis should come, unfortunately, as little surprise to serious analysts.
As such, the narrative to yesterday’s report contained some interesting language: "Sharply higher demand for credit in Caribbean banking centers and in Europe resulted in a sharp step-up in interbank transfers…In the fourth quarter, large inflows from Caribbean banking centers occurred partly in response to a pickup in demand for credit abroad and partly for yearend bookkeeping purposes…In 2000, U.S. banks borrowed heavily in the second and fourth quarters to meet surges in domestic and international credit demand and to accommodate yearend bookkeeping needs"
W I C H T I G
As George Soros so brilliantly articulated in his book "The Crisis of Global Capitalism," when the current global system comes under significant stress, countries at the periphery are the first to falter. Well, globally the "wheels are coming off" the system, and the currencies of the periphery countries are getting hammered. Sure, politician, pundits, and citizens of countries such as Canada, Australia, Brazil, South Korea, Taiwan, Argentina, Singapore, Thailand, and elsewhere can easily come up with domestic explanations for their currency and financial woes, but the root of the problem lies outside, with a dysfunctional global financial system. The earthquake (the "Big One") has now begun and, alarmingly, the foundation of the system is beginning to buckle after only the initial minor tremors. And just as earthquakes illuminate the previous lack of or disregard for building codes, along with sloppy engineering and shabby construction, there will be years and perhaps decades to ponder why more care, attention and discipline were not taken to nurture, develop and protect a sound and stable global financial architecture. For too long, too many have acted in total disregard for the greater good of a healthy global financial and economic system. There has been a complete lack of responsibility and accountability, and many innocents will now share in the costs. W I C H T I G There is no doubt about it, all the "fun and games" has left an edifice of over indebtedness, shaky institutions and maladjusted economies – acute Global Financial Instability. And following Minskian analysis, "if the unwinding involves financial instability, then there are prospects of deep depressions and stagnation." We just don’t see any other way around it. Sure, global central bankers could look to another round of runaway credit and speculative excess like that which emanated from the post-98 global crisis "reliquefication." It is difficult though to see how something similar could be repeated. Back in 1998, the US consumer still held the potential to be the "locomotive" for global recovery, enjoying an inadequate but positive 4% savings rate. There was as well the "tinderbox" of the unfolding tech/Internet/communications bubble, as well as generally a great proclivity of accepting risk by American households and institutions. Today, the US consumer is at the end of his rope, risk aversion is taking hold, and the technology bubble is a complete bust. The most likely scenario going forward is retrenchment - severe retrenchment, whether global central bankers like it or not.
Indeed, it appears a major period of retrenchment is already in progress. It is very much international, multidimensional, and it is outside of the control of the Federal Reserve. Importantly, it is more specifically financial than economic, although economic downturn is a certain consequence of financial retrenchment. This is an atypical crisis, not easily understood by traditional analysis. As policymakers from Australia to Canada struggle with sinking currencies not justified by relative underlying economic fundamentals, the root cause of the unfolding global currency crisis is the increasing impairment of the global system itself, specifically the "leveraged speculating community." It has been the financial institutions that have been behind the global "euphoric era"/financial bubble, and it is the financial players that are today caught heavily exposed, are suffering heavy losses, and now have little alternative outside of aggressive risk control. This is a sea change for the global economy and asset markets. The major dilemma, however, is that with the leveraged speculating community having come to quite dominate international financial markets, it is an arduous (impossible?) process to locate participants willing to accept the market risk that they are desperately seeking to unload. Bull markets create their own liquidity and bear markets, by definition, destroy liquidity. Bear markets uncover problematic underlying leverage. This is very much a global liquidity crisis in the works, with unprecedented leveraged speculation at the root of the unfolding financial debacle. There will be no cure but a protracted workout period.
We also have little doubt that derivative players are and will continue to play a prominent role in the unfolding crisis. They have willingly become "receptacles" of enormous market risk – equity, currency, interest-rate, credit - in what will prove a great failed experiment with sophisticated "risk management" techniques and vehicles. If the true story is ever told about these derivative markets, the storyline will be much more about reckless leverage and speculations than managing risk. And with global positions surpassing $100 trillion, the derivative marketplace is very much a "weak link" in the acutely fragile global financial "daisy chain." If one major derivate player falters, perhaps a Japanese institution, then the entire frail system is in jeopardy. And as we have stated previously, the derivative players assume continuous markets and marketplace liquidity. Neither will be forthcoming as derivative traders look to offload the risk they have accumulated over this boom cycle. My favorite flood insurance analogy would today have torrential rains and a swelling river level leaving the flood insurance speculators in a panic as they rush to a reinsurance marketplace with no takers, in what they had always assumed would be liquid and functioning market. So much for making bold assumptions…
W I C H T I G
So far, the US dollar wins by default, with the periphery currencies under intense liquidation. For now, this is much more about market dynamics than underlying fundamentals. Still, there remains the strong but erroneous marketplace perception as to the soundness of the U.S. financial system. Sure, capital levels are high, especially compared to weakened institutions abroad. This comparison, however, is deceptive, with the US only recently seeing its historic asset bubble begin to falter. Even today, one can make a case that the Great US Credit Bubble lives on, with money market fund assets increasing $18 billion last week to $2.047 trillion (unbelievable!). Money market fund assets have now increased at a 33% annualized rate during the past 36 weeks (since the beginning of 2000’s second half). Broad money supply increased $14 billion last week to almost $7.3 trillion, and has now expanded almost $570 billion, a 12% rate, during the past 36 weeks. The U.S. financial sector is working diligently to protect itself and sustain the boom, but these efforts will be futile. JAAA! February numbers are in for Fannie Mae, with the mortgage lending behemoth expanding its mortgage portfolio at a 19% rate during the month. And while this is reduced from January’s expansion, it is worth noting that Fannie Mae’s "average investment balance" increased $15 billion during February, a 27% growth rate, to $682 billion.
So, especially with a faltering yen and the Japanese financial system in tatters, the great global leveraged speculating community is even more comfortable with the US credit market as the "place to play." Moreover, a confluence of factors including the crowd behavior of the speculators, heightened global risk aversion leading to a liquidation of "periphery" assets, and a massive derivative position overhang exacerbating market direction – whatever that direction might be, finds us today in the midst of a severe global currency market dislocation. It’s a dollar "meltup." And while this dislocation has thus far worked to the great benefit of the dollar and, importantly, agency and credit market instruments, the unfolding financial crisis is anything but a sanguine development for the vulnerable U.S. financial sector. The U.S. stock market is beginning to appreciate the seriousness of the unfolding crisis, but this again ironically only provides greater fuel for the speculative bubble in the U.S. credit market. The day of reckoning approaches… Thus far, however, the major deficiencies of the leading U.S. institutions (and financial system generally) have remained unexposed (specifically due to continued rampant money and credit excess). This will not last. With the expectation of an inevitable break in confidence for the powerful U.S. financial sector, the potential for outright financial collapse is absolutely terrifying.
Gruß
KA111
Den folgenden Artikel habe ich, man sollte es nicht glauben, stark gekürzt.
Er enthält m.E. viele wissenswerten Details über zentrale Zusammenhänge.
The Credit Bubble Bulletin - by Doug Noland
Global System Instability
March 16, 2001
With recognition of the seriousness of the unfolding global financial crisis beginning to take hold, the Dow ended the week with a loss of almost 8%, the largest decline since October 1989. Across the board, it was bear market action. For the week, the S&P500 dropped 7%, the Transports 10%, the Morgan Stanley Cyclical index 9%, and the Morgan Stanley Consumer index 8%. The Utilities declined 5%, while the small cap Russell 2,000 and the S&P400 Mid-Cap indices both declined 7%. Tech stocks were hammered once again, with the NASDAQ100, Morgan Stanley High Tech and Semiconductor indices all sinking 9%. The Street.com Internet index sank 13% and the NASDAQ Telecommunications index dropped 11%. Financial stocks generally outperformed, with the Bank and Securities Broker/Dealer indices declining 6%. The HUI gold index sank 11% this week.
Gold reversed sharply this week, with bullion prices dropping better than $13. With global currency markets in disarray, the dollar won by default. The dollar index surged almost 4% this week.
"Jobless Surge as Dollar Hits New Depths" was the headline for the lead story in yesterday’s Sydney Morning Herald. "Japan banks on the edge – Japan’s banks headed for a crisis which threatens world currency stability…" also made the front page. Around the world, it is becoming apparent that global financial crisis has taken a decided turn for the worst. Today, the Brazilian real dropped almost 2% to its lowest level since March of 1999, this just one day after the Brazilian central bank intervened to support the real for the first time in 14 months. Concerns grow of the more than $140 billion of external debt borrowed by companies in Brazil. Fears are increasing of acute financial crisis in Argentina and Latin American bonds. The major markets in Brazil and Argentina trade poorly throughout. Argentina peso futures contracts trade with heightened premiums reflecting growing concern of a breakdown of the country’s currency board. Governments and corporations in Argentina have significant foreign denominated debt.
One can certainly get a feel for the global nature of the current crisis by scanning today’s headlines from Bloomberg News: "Canadian Dollar Drops Near Record Amid Concern about Stocks and Economy"; "Australian Dollar Falls on Concern Government Set to Lose Parliament Seat"; "Korean Won, Taiwan Dollar Decline as Weak Yen Curbs Demand for Exports"; "Thai Baht Falls to Three-Month Low as Central Bank Says It’s Not Worried"; "Venezuela Unemployment Rate Surges to 15.8% in January From December’s 10%"; "Philippine Unemployment Rate Rises in January to 11.4%, a Nine-Month High" "Argentine Bonds Plunge on Concern Economy Plan Won’t Get Political Support"; "Turkish Economic Program Hinges on Lenders Providing Up to $25 Billion"; and "Euro Suffers Worst Weekly Drop Against the Dollar." In the US, a disconcerting headline has "Edison, PG&E Stocks and Bonds Drop on Fear of Bankruptcy." With significant exposure to a California utility bankruptcy in money market funds, this situation should be monitored closely. At the same time, American credit data turns more ominous by the week.
Yesterday, the Mortgage Bankers Association reported a sharp and broad based increase in mortgage delinquencies. The delinquency rate for "one-to-four unit residential properties" jumped 50 basis points to 4.54% during the fourth quarter. "The increase in the delinquency rate is significant but not a surprise given the fourth-quarter economic slowdown," said Douglas G. Duncan, MBA's chief economist. "Real GDP growth was only 1.1 percent in the fourth quarter, the slowest pace in six years. And rising energy prices also cut into homeowners' disposable income and ability to pay." Importantly, the fourth quarter marked the third consecutive quarterly increase in delinquencies. "After falling 71 basis points from the first quarter of 1998 through the first quarter of 2000, the delinquency rate over the past three quarters has risen by 82 basis points."
Also yesterday, the American Bankers Association (ABA) reported credit card delinquencies of 3.34% at the end of the year, an increase from 3.93 percent in the third quarter. We expect a surge in credit card delinquencies going forward.
And while consumer debt problems are in the very early stages, the unfolding corporate debt debacle seems to worsen by the month. It is worth mentioning an article yesterday from BusinessWire: "Fitch: One For History Books; 1st Qtr Defaults To Exceed $20B. On the heels of a record setting $27.9 billion in default volume for the year 2000, high yield defaults soared to $12.8 billion for the first two months of 2001. February produced $9.4 billion in defaults, driving the LTM high yield default rate to 6.7% compared to 5.3% in January March, fallen angel Finova Capital filed for Chapter 11 protection, placing an additional $6 billion of bonds in default. Excluding fallen angels, the LTM high yield default rate through February stood at 5.4% compared to 4.6% for full year 2000 ."
Yesterday’s current account report from the Commerce Department is another document for the "time capsule." For the year, the U.S. current account deficit surged 31% to $435.4 billion, more than 4% of GDP (for comparison, it was about $110 billion during 1995), up sharply from 2.5% of GDP as recently as 1998. For the year, the profligate US economy imported about $1.22 trillion of goods (19% year-over-year increase), almost $450 billion more than it exported. Yet, despite this massive deficit, "US owned assets abroad" jumped $553 billion (compared to $430 billion in 1999 .Big increases, however, were reported in the categories "US claims on unaffiliated foreigners reported by US nonbanking concerns" and "US claims reported by US banks." The first category had a net increase of $157 billion (up 70% from 1999’s increase of $92 billion) and the second $124 billion (up 58% from 1999’s increase of $70 billion).
With huge foreign bound outflows and a truly massive current account deficit, the offsetting foreign source inflows have grown to simply unimaginable proportions. "Foreign-owned assets in the United States" increased $952 billion during the year 2000, up 26% from 1999’s increase of $754 billion. And while "foreign official assets in the United States" increased about $30 billion (compared to 1999’s $33 billion), "other foreign assets in the United States" ballooned a stunning $917 billion (up 29% from 1999’s $711 billion). During the fourth quarter alone, "other foreign assets in the US" increased $280 billion (up almost 80% from 1999’s Q4 increase of $157 billion). For year-2000 by category, direct investment totaled $317 billion (up 15% from 1999’s $276 billion); holdings of US Treasuries actually declined by $52 billion (compared to 1999’s decline of $20 billion) and US currency sent abroad increased $1 billion (compared to 1999’s increase of $22 billion). The key to this amazing story (trading securities for goods!) is the massive foreign purchases of "US securities other than US Treasury securities." At an astounding $466 billion for the year, these net purchases were up 41% from 1999’s record of $332 billion. For now, the worldwide flood of dollars flows right back into agency and other US securities. Also, importantly, "US liabilities to unaffiliated foreigners reported by US nonbanking concerns" jumped $106 billion (up 208% from 1999’s $34 billion increase), while "US liabilities reported by US banks" increased $79 billion (up 18% compared to 1999’s $67 billion).
This data is evidence of unprecedented financial credit excess. Further, capital movements of this magnitude and character are almost certainly "hot money" speculative flows emanating from credit excess at home, in Europe and, increasingly, from the UK and off-shore banking centers. With this in mind, the unfolding global financial crisis should come, unfortunately, as little surprise to serious analysts.
As such, the narrative to yesterday’s report contained some interesting language: "Sharply higher demand for credit in Caribbean banking centers and in Europe resulted in a sharp step-up in interbank transfers…In the fourth quarter, large inflows from Caribbean banking centers occurred partly in response to a pickup in demand for credit abroad and partly for yearend bookkeeping purposes…In 2000, U.S. banks borrowed heavily in the second and fourth quarters to meet surges in domestic and international credit demand and to accommodate yearend bookkeeping needs"
W I C H T I G
As George Soros so brilliantly articulated in his book "The Crisis of Global Capitalism," when the current global system comes under significant stress, countries at the periphery are the first to falter. Well, globally the "wheels are coming off" the system, and the currencies of the periphery countries are getting hammered. Sure, politician, pundits, and citizens of countries such as Canada, Australia, Brazil, South Korea, Taiwan, Argentina, Singapore, Thailand, and elsewhere can easily come up with domestic explanations for their currency and financial woes, but the root of the problem lies outside, with a dysfunctional global financial system. The earthquake (the "Big One") has now begun and, alarmingly, the foundation of the system is beginning to buckle after only the initial minor tremors. And just as earthquakes illuminate the previous lack of or disregard for building codes, along with sloppy engineering and shabby construction, there will be years and perhaps decades to ponder why more care, attention and discipline were not taken to nurture, develop and protect a sound and stable global financial architecture. For too long, too many have acted in total disregard for the greater good of a healthy global financial and economic system. There has been a complete lack of responsibility and accountability, and many innocents will now share in the costs. W I C H T I G There is no doubt about it, all the "fun and games" has left an edifice of over indebtedness, shaky institutions and maladjusted economies – acute Global Financial Instability. And following Minskian analysis, "if the unwinding involves financial instability, then there are prospects of deep depressions and stagnation." We just don’t see any other way around it. Sure, global central bankers could look to another round of runaway credit and speculative excess like that which emanated from the post-98 global crisis "reliquefication." It is difficult though to see how something similar could be repeated. Back in 1998, the US consumer still held the potential to be the "locomotive" for global recovery, enjoying an inadequate but positive 4% savings rate. There was as well the "tinderbox" of the unfolding tech/Internet/communications bubble, as well as generally a great proclivity of accepting risk by American households and institutions. Today, the US consumer is at the end of his rope, risk aversion is taking hold, and the technology bubble is a complete bust. The most likely scenario going forward is retrenchment - severe retrenchment, whether global central bankers like it or not.
Indeed, it appears a major period of retrenchment is already in progress. It is very much international, multidimensional, and it is outside of the control of the Federal Reserve. Importantly, it is more specifically financial than economic, although economic downturn is a certain consequence of financial retrenchment. This is an atypical crisis, not easily understood by traditional analysis. As policymakers from Australia to Canada struggle with sinking currencies not justified by relative underlying economic fundamentals, the root cause of the unfolding global currency crisis is the increasing impairment of the global system itself, specifically the "leveraged speculating community." It has been the financial institutions that have been behind the global "euphoric era"/financial bubble, and it is the financial players that are today caught heavily exposed, are suffering heavy losses, and now have little alternative outside of aggressive risk control. This is a sea change for the global economy and asset markets. The major dilemma, however, is that with the leveraged speculating community having come to quite dominate international financial markets, it is an arduous (impossible?) process to locate participants willing to accept the market risk that they are desperately seeking to unload. Bull markets create their own liquidity and bear markets, by definition, destroy liquidity. Bear markets uncover problematic underlying leverage. This is very much a global liquidity crisis in the works, with unprecedented leveraged speculation at the root of the unfolding financial debacle. There will be no cure but a protracted workout period.
We also have little doubt that derivative players are and will continue to play a prominent role in the unfolding crisis. They have willingly become "receptacles" of enormous market risk – equity, currency, interest-rate, credit - in what will prove a great failed experiment with sophisticated "risk management" techniques and vehicles. If the true story is ever told about these derivative markets, the storyline will be much more about reckless leverage and speculations than managing risk. And with global positions surpassing $100 trillion, the derivative marketplace is very much a "weak link" in the acutely fragile global financial "daisy chain." If one major derivate player falters, perhaps a Japanese institution, then the entire frail system is in jeopardy. And as we have stated previously, the derivative players assume continuous markets and marketplace liquidity. Neither will be forthcoming as derivative traders look to offload the risk they have accumulated over this boom cycle. My favorite flood insurance analogy would today have torrential rains and a swelling river level leaving the flood insurance speculators in a panic as they rush to a reinsurance marketplace with no takers, in what they had always assumed would be liquid and functioning market. So much for making bold assumptions…
W I C H T I G
So far, the US dollar wins by default, with the periphery currencies under intense liquidation. For now, this is much more about market dynamics than underlying fundamentals. Still, there remains the strong but erroneous marketplace perception as to the soundness of the U.S. financial system. Sure, capital levels are high, especially compared to weakened institutions abroad. This comparison, however, is deceptive, with the US only recently seeing its historic asset bubble begin to falter. Even today, one can make a case that the Great US Credit Bubble lives on, with money market fund assets increasing $18 billion last week to $2.047 trillion (unbelievable!). Money market fund assets have now increased at a 33% annualized rate during the past 36 weeks (since the beginning of 2000’s second half). Broad money supply increased $14 billion last week to almost $7.3 trillion, and has now expanded almost $570 billion, a 12% rate, during the past 36 weeks. The U.S. financial sector is working diligently to protect itself and sustain the boom, but these efforts will be futile. JAAA! February numbers are in for Fannie Mae, with the mortgage lending behemoth expanding its mortgage portfolio at a 19% rate during the month. And while this is reduced from January’s expansion, it is worth noting that Fannie Mae’s "average investment balance" increased $15 billion during February, a 27% growth rate, to $682 billion.
So, especially with a faltering yen and the Japanese financial system in tatters, the great global leveraged speculating community is even more comfortable with the US credit market as the "place to play." Moreover, a confluence of factors including the crowd behavior of the speculators, heightened global risk aversion leading to a liquidation of "periphery" assets, and a massive derivative position overhang exacerbating market direction – whatever that direction might be, finds us today in the midst of a severe global currency market dislocation. It’s a dollar "meltup." And while this dislocation has thus far worked to the great benefit of the dollar and, importantly, agency and credit market instruments, the unfolding financial crisis is anything but a sanguine development for the vulnerable U.S. financial sector. The U.S. stock market is beginning to appreciate the seriousness of the unfolding crisis, but this again ironically only provides greater fuel for the speculative bubble in the U.S. credit market. The day of reckoning approaches… Thus far, however, the major deficiencies of the leading U.S. institutions (and financial system generally) have remained unexposed (specifically due to continued rampant money and credit excess). This will not last. With the expectation of an inevitable break in confidence for the powerful U.S. financial sector, the potential for outright financial collapse is absolutely terrifying.
Gruß
KA111
artistin
19.03.2001, 14:55
Hi,
interessante Artikel habt ihr hier eingestellt, schön schön. Oder auch nicht, je nachdem aus welchem Blickwinkel man das betrachtet.
Für mich ist buy-and-hold = marriage seit Wochen weniger reizvoll als dating.... :D. Allerdings ist diese 2.Variante ungleich schwieriger erfolgreich zu bewerkstelligen. Brigitte hat mal von Gezappel geschrieben, andere sehen die letzten sicheren Häfen (DOW & Co.) verlorengehen.
Deshalb ist mein Cash derzeit zu 70% "verheiratet" mit einem Geldmarktfonds. Und ich befasse mich intensiver mit Indexzertifikaten und Tradingfonds, die mir sowohl als kurz- wie als mittelfristiges Instrument interessant erscheinen. Chance UND Risiko sind eben gleichermaßen limitiert.
Buy-and-hold praktiziere ich allerdings aktiv mit Fondssparplänen. Mit Horizont von 10 Jahren. Bunt gemixt durch alle Sparten...... :D
grüsse
artistin :)
interessante Artikel habt ihr hier eingestellt, schön schön. Oder auch nicht, je nachdem aus welchem Blickwinkel man das betrachtet.
Für mich ist buy-and-hold = marriage seit Wochen weniger reizvoll als dating.... :D. Allerdings ist diese 2.Variante ungleich schwieriger erfolgreich zu bewerkstelligen. Brigitte hat mal von Gezappel geschrieben, andere sehen die letzten sicheren Häfen (DOW & Co.) verlorengehen.
Deshalb ist mein Cash derzeit zu 70% "verheiratet" mit einem Geldmarktfonds. Und ich befasse mich intensiver mit Indexzertifikaten und Tradingfonds, die mir sowohl als kurz- wie als mittelfristiges Instrument interessant erscheinen. Chance UND Risiko sind eben gleichermaßen limitiert.
Buy-and-hold praktiziere ich allerdings aktiv mit Fondssparplänen. Mit Horizont von 10 Jahren. Bunt gemixt durch alle Sparten...... :D
grüsse
artistin :)
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