God created economists...........
that meteorologists no longer feel alone.
Causes of the crisis:
The crisis was triggered in Protected content famous Black Thursday October Protected content
The stock market crash in New York is a consequence of speculation on credit.
Like today, the bursting of the bubble n'assainît not the situation.
1929: Borrowing to play the increase in scholarship
2007: Borrowing to play the rise of real estate
in both cases: falling markets, rapid collapse of the financial system,
banks lack liquidity,
Millions of holders sell their shares in Protected content
Massive withdrawal of institutional and private investors hedge-fund in Protected content .
in both cases, the financial crisis is economic.
contraction of credit slows investment and consumption
(in Protected content , the auto credit represented 90% of sales).
in both cases, the crisis just across the Atlantic and is reflected in Europe with reflux of capital previously attracted by high rates in Europe.
Entry point of the crisis: entry of China into the WTO in Protected content , despite maintaining a strict exchange controls and a $ / Yuan artificially locked by China to 8.28 yuan. Hourly labor costs 80 times less than the U.S..
Problem of change: The huge undervaluation of the yuan remains intact.
1929: borrowing to buy stock market crash
then unable to repay loans
Recession began in Protected content been imposed on governments and central banks in contrast to previous orchestrated
by Volcker Protected content 82) or Greenspan Protected content Protected content
U.S. deregulation since Reagan oversimplifying
led capitalism without tag or all shots are allowed.
the crisis of subprime / crisis of confidence and / financial crisis in the real economy,
unemployment, recession, channel by loans to households and facilities for SMEs /
Cyclical sharp rise of raw materials followed by an exceptional increase as a result of the intimidation of Iran organized by President Bush and Mrs. Rice.
Glaring failures at all levels of control
lack of transparency in the risk management process.
Toxics linked structured products.
In the very short term,
Paulson change its TARP Troubled Asset Relief program
(rescue assets in difficulty) because:
1 / too serious (AIG 85 to $ Protected content
2 / influence OBAMA
3 / Renewal of the credit market (40% related to securitization)
ACC is Protected content the height of summer Protected content years / from Protected content
gap between interest rates 3-month Eurodollar rate and the interest of U.S. Treasury notes as a percentage: if risk / refusal of loan increase rate 3 months interbank Q Protected content 0% and 0.3%, August Protected content to, 2% (1 st public), in December Protected content 2% (2nd intervention), 28 March Protected content to 1.8% (3rd intervention), 18 July Protected content Polson, (4th intervention to calm the game ) And then panic, 10 October Protected content to 6%
1 / Summer Protected content interest rates will strengthen the growing high /
return the property market / inability to pay /
securitized products by small U.S. banks on a secondary market to refinance / products disclosed abroad, drowned among other products and marketed.
2 / August Protected content Evaluation higher amounts in terms of risk and then by many financial institutions or suspicion because of a different situation then restricting loans among themselves. Some banks are working on the effects of leverage / many loans, low capital and are struggling to refinance. the problems are at that stage yet settled piecemeal.
3 / 15 September Protected content GVT U.S. Treasury and Lehman Brothers dropped. The weekend of September 13 and 14 will be the turning point that will accelerate this crisis, or the emergence of many plans.
these are actors at the origin of the crisis which will be the first affected:
the trader to repeat endlessly the same scenario, create money with money.
the richest traders the most suitable financial system are the first victims. Mention was made of £ 3.6 billion bonus promised a handful of traders in the city. It is "hyper pasture" that leads to repeat the excesses behavior which derives profits in the first place.
Situation in France is: + comfortable, fixed-rate loan, banks + solid than others, less indebted households, up less real estate than in other countries. No fiscal space for a global revival.
But clear impact in terms of internationalization of markets.
Household consumption falling and falling savings rate,
disappearance of the wealth effect with the fall of real estate and stock markets.
Yet, some as Romain Zaleski launches bank in Poland Aliore bank.
Inflation and fiscal pressure to counter the debt.
reduced inflation to the timing of the return to normal raw materials (supply)
and prospects of unemployment (demand) that will limit wage increases.
The 'reflation' own Keynesian theories must prevail.
This will remain off, the state has never been the best shareholder.
We must correct the 'clash of demand' and revive the economy with interventionism
Money 'printed' will be assumed. it will bail out the state coffers.
Since Protected content , France and Europe have never posted budget surpluses;
room for maneuver is reduced during a crisis.
The public deficit revive the economy in injecting own money to revive growth, tax revenues increase and then allow to finance these public expenditures.
Growth of global annual GDP: 5.4% in Protected content + (T1, T2 and T3 in Protected content
5.3% in Q Protected content , 5% in Q Protected content , 4.4% in Q Protected content , 3.5% in Q Protected content
2.7% in Q Protected content , 1.9% in Q Protected content 1.6% in Q Protected content
Buffet buys 20% stake in Goldman with the agreement of 10% return.
Companies sides remain under-valued and allow the resumption of M & A
The sovereign funds and private accumulate nearly $ 4k billion of cash.
The G20 will look for solutions within four months??.
Banks have been saved, the ECB and other central banks should continue their policy of reducing rates,
Flip likely continuation of the real estate.
The strength of the dollar: the story of 'reverse carry trades':
rise of the yen against dollar and Euro against the backdrop of débouclage Carry-trade.
1 / investors borrow in yen at very low rates.
2 / selling yen to buy foreign currency income flagship +
(Australian dollar, Iceland krona, euros and Kiwi New Zealand).
3 / pocketing the interest rate differential,
some have bought for $ raw materials or stock;
To meet their commitments,
hedge-fund débouclent at all costs to generate cash;
Customers investors withdrew their balls, hedge-fund accentuate the fall in share prices and buying of yen to repay their loans.
Then vicious cycle, the carry-trade deflates, the yen flies, the 'carry-traders are more numerous. even the basic yen investors are caught in the trap and are forced to unbuckle;
The peak is probably behind us fall in stocks, lack of buyers, further withdrawal of hedge-fund, tightening of credit. the tap Carry-trade bloodless dries, Japan dries markets also repatriating cash; Refuge on the dollar on anticipation of rate cuts in Europe higher as U.S., the yen climbed against the dollar also by mechanical effect on the low probability for Japan to lower its rates further, the dollar is more liquid and depth of its market more intense by the existence of U.S. government securities.
Temporary closure of the Russian market,
danger on two countries: Iceland and Argentina.
Russian anecdote: this summer Senior French bank for a line of credit for a Russian oligarch, 20 billion as collateral with 115% in Gazprom. Many deals done with the use of the loan used to acquire Russian values, reversing the market, more buyers, forced to surrender the collateral coverage to draw cash. low liquidity, leverage technical reasons Oversize of the market to try to stem the fall of the Exchange.
Problem of corporate finance:
estimated calculation of a division by two streams,
difficult for the state to impose loans (eg Japanese Protected content .
companies will have to cut their debt and investments.
Bankruptcies of companies should be legions and increase unemployment.
A single global currency (utopian) and a single accounting language.
Support the banking system temporarily Keynesian way.
cash, loans to businesses, liquidity crisis, restore confidence.
1 / technical accounting mark-to-market linking the value of the fte at its accounting value (thus creating a "feedback" to go back and forth between the accounting valuation and market valuation), with disastrous effects in models mathematics quants.
2 / free money creation left to banks that have no responsibility since the Fed (and other agencies in the country's other) is behind in case of seed (= risk premium for-all ... which does nothing). And leverage in this creation that is enormous.
3 / lack of responsibility on their own property managers of the establishments authorized to create money (the TPG, they are responsible on their own property).
4 / lack of control of advertising messages to individuals who induce them into error regarding the operation of savings products
Consumption and revive the economy by ignoring the Maastricht criteria to reduce the recession in Europe. Regulate the salaries of managers and traders.
Supervision of procedures for granting home loans, credit and value of property currently in the U.S..
Limiting the leverage of banks,
(Lehman indebted to 30 times its equity los de liquidation).
The state will relocate savings to revive the economy, lower salaries booklet.
Oversight agency to create to make transparent the market for OTC,
securitization (although that of bank card or loan consumption was very useful).
Establishing a reflection of public authorities on the methods of regulation and regulation of financial and banking activities as on the functioning of financial markets.
(example of dysfunctional Savings on the rules of trading)
Reform the functioning of rating agencies (supposed safeguards).
Issuers pay agencies at the expense of investors.
Set targets parity between the major international currencies
(Bretton Woods 2) or wait quietly raising the average class in China.
Chinese inflation (rising domestic demand supported weakness in Europe / US)
then the wages and then by price.
Coordinate to avoid statements like in Protected content policy of every man for himself.
Better coordination of different national supervisory bodies existing
(AMF, COB, etc..;)
Fiscal: lower taxes and prévèvements mandatory.
Increased regulation of hedge-fund and coordinate the fiscal aspect concerning black holes of regulation (Statutes of banking and fiscal paradise)
Creation of a supra-national structure and a budget.
Global governance of the IMF funds with a broader powers to
or a Financial Stability Forum in existence since Protected content the G7.
In both Protected content 2008, the Keynesian theory (credit crisis and demand) of the State intervention may prevail.
We need more a 'new deal' as Roosevelt did in Protected content . The Congress had adopted an avalanche of financial measures ... including increasing the tax burden on businesses and high incomes without leaving bottles at $ Protected content .
On a short term:
ban on selling extended to all sectors and all places.
Restoring confidence to tighten the credit spread, reduce the volatility of interbank rates, and to halt the fall in stock markets.
The use of public funds were used primarily to clean up balance sheets, absorb toxins, replenish capital and term margins.
Building permanent guarantee of interbank loans by the state,
Unlimited guarantee deposits by banks such as Germany, Ireland, Portugal and Denmark.
Reconciliation in the banking sector through financial rescues.
Unlike the animal world that fits the world that suffers, man adapts the world that invented. We are very resistant and have an incredible ability to bounce whether natural or cultural.
New code of conduct to limit the excesses and return to the banking business in their home. The magnitude of reactions in China, Russia, Europe and the U.S. can hope for a speedy recovery. We need a political Europe as well as monetary.
Investment advice medium term
certain values such as:
Air France-KLM, / in the state capital, had always filled, development of the Air China and India. LVMH, the world leader in luxury / less than 10 times earnings, from 90 euros to 41.00 in one year. Arcelor Mittal increased from 67.80 last June at 15.30 has a potential to increase on the arrival of OBAMA
and Renault, in the state capital, from 19.11 to 122.87, the electric potential alternative to oil, or Sanofi. / Raise OBAMA, the world leader in vaccines and could spend 16 million vaccine production unit at U.S. 60.
Defensive like Total, Air Liquide and EDF or Procter Gamble.
We will witness a real change behavioral patterns
Falling volumes undermine a major bottom,
Figures of technical analysis in reverse Head & Shoulders,
Distributing cash in several banks to optimize the guarantees of its assets, "A, PEA protected and you stay SICAV holders of securities and on capital life insurance. Risk of falling yields. Today only the shareholders of the banks concerned are passed to the fund. Namely / A foreign bank having a branch in France does not guarantee fund French.
Washington: Council of a Swiss banker:
you can always throw money out the window when it is the garden to the inside of the house.
Louis-Serge Real del Sarte
Conference on Monday 17 November / Polytechnic College HI-Team
History establishments affected:
Northern Rock nationalized
Alliance & Leicester (takeover by Santander)
Bradford & Bingley (takeover by Santander)
Halifax Bank of Scotland married to Lloyds TSB
Bankruptcy Lehman Brothers
Rescue of AIG, the world's No. 1 in insurance,
Fortis dismantling and backed by BNP Paribas,
DEXIA recapitalised by France, Belgium and Luxembourg,
SG triggers capital increase subsequent Kerviel,
Calyon, Lourdes losses, forcing lift 6 billion euros
Leading heavy losses capital increase of 3.7 billion euros
Will accept the merger Caisses d'Epargne / Banques Populaires
Dresdner Bank / Commerzbank (merger)
Deutsche Bank / Postbank (merger)
Hyporealestate recapitalised to 35 billion euros
Fannie Mae and Freddie Mac rescued by the U.S. Treasury
Merrill Lynch has backed, bought by BOA on request from Paulson and Bernanke
Bear Stearns sank in March
Washington Mutual swallowed by JP Morgan
Goldman Sachs has raised a rapprochement
UBS and Credit Suisse recapitalized
Morgan Stanley: Mitsubishi reinforcements in the capital
PNC (pa) absorbed its competitor National City
Indymac (real estate financing Us) went bankrupt.