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Juan Toro

Coincidiendo con el final de año, la semana pasada ha presenciado la celebración de tres subastas de liquidez por parte de tres bancos centrales: el Banco Central Europeo, la Reserva Federal y el Banco de Inglaterra. Estas medidas, tendentes a la reducción de tensiones, deberían de haber respondido a los acuerdos de coordinación que habían firmado los bancos centrales el 12 de diciembre. Sin embargo, aunque lo ocurrido no haya sido el resultado de la coordinación, el objetivo conseguido sí ha sido el mismo: relajar las tensiones en el mercado monetario, con efectos bastante significativos en los tipos de interés a dos semanas (esto es, hasta el fin de año).

Continue reading 'Subastas de liquidez'

Juan Toro

Last week Central Banks were pretty active on providing the
needed liquidity to avoid any cash stress as we got into the New Year. Initially everything seemed as the implementation of the agreements on liquidity provision reached by the main Central Banks on the 12th of December. However things have evolved differently. The size of the auction in Europe was much higher than expected. Probably many US/UK banks were among the main bidders for this funding, even if there were special dollar funding auctions programmed by the ECB. Not withstanding, the end result has been achieved: to soften tension in the money markets as we got into the New Year. Looking at the auctions delivered by the three main Central banks (European Central Bank-ECB-, Bank of England –BoE- and Federal Reserve), we can infer very different information about each money market.

Continue reading 'Liquidity auctions: What did we learn?'

Francisco Lopez Lubian

Para aquellos que estén interesados -y tengan salud y ganas- recomiendo un par de lecturas para estos días.

Continue reading 'ALGUNAS LECTURAS PARA ESTOS DÍAS'

Francisco Lopez Lubian

Aunque es un hecho que el número de operaciones de M&A han disminuido de forma ostensible en los últimos meses, no es menos cierto que aún se siguen produciendo acuerdos de compra/venta de empresas que resultan muy interesantes. Tomemos, por ejemplo, el caso de la compra del 79% de Arsys, empresa líder en el mercado de alojamiento y registro de dominios en Internet, por Mercacapital y el grupo Carlyle.

Continue reading '¿QUIÉN HABLÓ DE CRISIS?'

Juan Toro

This is the question Central Banks ask themselves. They first asked themselves individually and later on (last Wednesday) they though they might get together to make this reflection together. We might be able to get some conclusions on this question if we follow the most recent events and market data.

We have received little news from the most innovative tool that has recently been released y the Fed to provide liquidity, the TAF (Term Auction Facility). This latter tool is a hybrid between traditional open market operations (limited to a small club, main dealers) and the discount window (open to any depositary institution but at a penalty rate). The first TAF was implemented yesterday but we know little about the results. I searched in the NY Fed webpage and found no information. However, we might get some indirect information from today’s dollar LIBOR fixing. I looked into the dollar LIBOR fixing and it showed that it was hardly affected. The LIBOR for the corresponding maturity has barely moved. So for the Fed, we can just say that they missed the target.

Continue reading 'How much money is needed to reduce money market risk premia?'

Francisco Lopez Lubian

Nos encontramos en pleno tiempo de preparación para la Navidad, tiempo de buenas intenciones, deseos de felicidad y regalos. Para el sistema bancario, este tiempo de fin de año suele coincidir con el cierre contable y, en consecuencia, con el momento de poner el balance en el mejor estado de revista posible, en lo que se refiere a liquidez, rentabilidad y otros ratios regulatorios.

En este contexto, la reciente decisión de cinco bancos centrales de actuar conjuntamente a nivel global para asegurar la liquidez del sistema bancario ha sido interpretada por muchos como un regalo de Navidad

Continue reading 'TIEMPO DE NAVIDAD'

Francisco Lopez Lubian

Hace poco un buen amigo me señalaba algunas de las trampas en las que todos podemos caer cuando hay que juzgar actuaciones y tomar decisiones. Quizás la más frecuente, decía, es plantearse incompatibilidades que no son reales. Y, para resolver estas aparentes incompatibilidades, buscar soluciones que también son aparentes y, por tanto, falsas.

Continue reading '¿SE PUEDE MEDIR EL VALOR DE LA ESTRATEGIA?'

Francisco Lopez Lubian

La crisis financiera destapada en el pasado verano fue anunciada y resumida con anterioridad por informes de organismos internacionales, como el FMI o el BIS. En esencia, y como se señalaba en el excelente artículo de JR Díez Guijarro publicado en el nº 37 del boletín económico del IE, el mensaje era: la economía real, bien; pero cuidado con los excesos de la economía financiera.

Continue reading 'CRISIS FINANCIERA Y CRISIS REAL'

Juan Toro

I got an email after the FOMC meeting decision with phrases expressing the reaction after todays decision of the Fed. People wanted a much more decisive move in the discount window. They did not get it. Here they go.

1) I will now get the 2007 Carlos Rossi instead of Petrus for the holidays.
2)He will go down as the worse Fed governor ever
3) Beyond me
4)The mkt wanted heroin and got methadone
5)this is really a dream right? did I sell a point ago?
6)Cancel your yr end vacation..Everyone will need treauries into the turn
7)Stocks! make them pay!
8) Ben Bernanke is the Eli Manning of Fed chairmen

Juan Toro

RBS recently released an interesting plot that shows the percentage of delinquencies in the prime and sub prime market in the US (see attached picture). This is the origin of the current fears. Those mortgages that already have the status of delinquency will not be under the umbrella of the plan pushed by the secretary of the Treasury and released by Bush yesterday. Hence the plan will not alter the current trend. It might curb it if the plan is successful and future delinquencies are stopped. But a new trend is appearing in prime loans and for this one there is no freeze of rates.

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Juan Toro

Turmoil in the US mortgage market and the possibility of higher foreclosures/delinquencies worry US policymakers. The economic effect of this housing slump on consumer’s consumption will define the end effect of the housing crisis on the economy. In order to fight it, several specific policies have been put forward, though none finally agreed upon. The measures are exceptional, and never considered before in similar situations.
The US Treasury secretary has proposed a national mortgage rescue that should be financed by the issuance of tax exempt bonds by state and local governments. The plan targets roughly 1.5 million adjustable-rate mortgages (ARMs) that are to be adjusted to higher monthly rates next year. The plan intends a freeze of rates on these loans. This plan is sponsored by a huge political will from the US government. However, this plan has important moral hazard issues and might induce irresponsible borrowing in the future. Moreover, they have to agree with the other side of the deal (mortgage servicers) and it is not clear that this political intervention will be much cheered by them.

Continue reading 'Policies for a mortgage crisis'