Tuesday, March 23, 2010
My Ovary Hurts When I Walk
The economy can survive without his vital organs?
I must confess that I am a little surprised at the current economic climate. Even if politicians have with more and more difficult scenario than one occasion, the general climate is not very good. Indeed, Many economists are beginning to worry about a crash to come on the debt market while journalists questioned the fact that this recovery is assumed to correlate to an unemployment rate that does not completely abated. (And I spend all concerns about Greece, Portugual, Spain etc ... which I think I mentioned already last summer ... it say if the subject is old) In my case, I am fascinated by this American desire to hide the truth. Indeed, we argued that financial markets are getting better and can start moving forward again. Remember that financial markets are infested with bad loans whose epicenter was Fannie Mae and Freddie Mac (which were nationalized by the U.S. government) and that the shock waves have spread through the failure of insurer AIG (which was supposed to ensure all claims questionable due to the famous CDS (credit default swap) ...). Therefore to take the pulse of the market we just look at how changing the institutions mentioned above. So here is what it appears to the first quarter of 2010
:
For Fannie Mae:
In all of 2009, total losses amounted to 74.4 billion against $ 59.8 billion in 2008.
The Federal Housing Finance Agency, regulator of Fannie Mae, requested an additional $ 15.3 billion to the Treasury, bringing the total support of the public at $ 76.2 billion.
Eighteen months after his rescue by injecting 182 billion dollars of public funds, the U.S. insurer has yet recorded a net loss of $ 10.9 billion in 2009.
Q1 loss is virtually the same as the annual loss.
in banks: U.S. authorities announced Friday, Feb. 22 closure of two U.S. banks, one in Nevada and one from Washington state, bringing to 22 the number of bankruptcies banking institutions since the beginning of the year in the United States.
The FDIC said this week that the number of U.S. banks 'problem' had leapt by 27% in the fourth quarter of 2009, rising to 702, the highest level since 1993, which indicates that the recovery U.S. banking sector remains uneven.
Since January 2008, 187 U.S. banks went bankrupt. U.S. authorities have already estimated that 2010 would probably be the year the number of failed banks would be at its peak.
"These figures are slightly above expectations. That said, given the huge quantities of stocks, real estate is not yet out of the woods," said Jack Ablin, Investment Officer at Harris Private Bank. "
It a little fun of the world, so Wall Street rises because the real estate collapse completely, but less than expected and so it justifies the U.S. indices recovered either as the pre-crisis knowing that no financial problems have been solved ...
In conclusion: There
increased losses in all financial institutions that are at the heart of the financial system. The U.S. strategy is to hide the reality and artificially increasing the monetary aggregate M2 is to flood the financial markets liquidity praying that the situation improves. (I speak for all this in detail in a forthcoming article). However, this strategy is expensive and the revenue of the U.S. state (such as European countries) have declined steadily forcing countries into debt again and again to finally receive almost imperceptible effects. We can then make the following two observations: -When a car engine broken it is useless to repair the body, it does not mean walk again. -The belief that the debt market is infinitely expandable to experience the same purpose as the same belief in the real estate market. All
the question is how long this strange situation will last. However, we are sure that this does not exceed a few years simply because in a year or two states will be companies to refinance their debts and unbearable it may be extremely risky.
Alexandre Letourneau
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