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WHEN INVESTORS TERYAYUT FEAR
The current Trouble is not like the usual correction, insists George Magnus of
UBS. To understand what is happening theory helps him credit cycles Haymana
Minsk. This American economist looked at the impact on the cost of Bad Credit Mortgage. When a lot of money is made, and the economic situation is stable,investors stopped being afraid of the risks and are taking longer. Banks in
that they contribute in every way. At the market fell crowd of investors who
are trying to earn a Embedding not own (like they simply do not), and
borrowing. For they are not in bankruptcy, Mortgages should rise steadily.But it could not be. The process cycles: one moment at the peak of the cycle,
all falling apart, and the surviving banks and investors have become much
careful. And so until the next period of prosperity and reckless lending. This
mechanism explains well the stock market collapsed in late 1980 - and the
beginning of 2000 - to begin. In both cases, the collapse was preceded by a Bad Credit boom. Today, too, is facing unprecedented credit growth.
In the last couple of years increased the price of Credit assets, despite the fact that the central responsible for the state of the developed economies, increased refinancing
rate, and growth in money supply declined. But the Minsk urged not to pay
attention to the central policy, but on being the banking system as a whole: if
the problem starts from private banks, it may be a sign of the end of the
cycle. And banks are likely against investors, Yahoo has long. Bear Stearns
since the beginning of the year has lost almost a third of its capitalization.
Deutsche Bank, JP Morgan Chase, Goldman Sachs, Citigroup fell to 14-18% - and
this in the face of continuing credit boom and rising stock markets. Last week Loans boom and wave get to us: not able to resist either Sberbank or VTB.
For all these professional pessimists news as a balm for the soul. Nuriel
Roubini, a former board member of the Presidency of the United States of
economists, even remembered the Great Depression. "The collapse of the
American real estate market will be extended to the rest of the economy on the
two channels - grimly predict it. - In other countries it penetrates through
the financial markets, but America hit by reducing consumer spending and
investment, leading to a recession."
OR CHUMA INFLUENZA?
Still, most economists believe in the best. Let the American economy to go
through a recession, the rest should resist. That is the official position of
the International Monetary Fund: he recently increased the forecast growth in
the world economy in 2007 from 4.9 to 5.2%. Unlike the United States and in Europe,
and even more so in Asia is a very dynamic economic growth. And that prior to
the financial sector, as alleged in a recent review of Moody's, major European
and Asian banks nothing threatening. Through a zone of turbulence ahead smaller
European banks, but the global financial crisis of the further spread of the Remortgage sector will be able, according to Moody's, avoid.
But stock markets rely on the fact that all wil disappear again, not worth it.
"Problems are in the mortgage market, the United States will decline in almost
all markets [shares], including a Russian" - stresses the head of the
department of market research IG "Capital" Scott Semet. Shares of
Russian companies is not attributable to Mortgage assets, and a global reassessment of the risks posed to them falling further quotations, which can
be quite strong and sharp. This is unlikely to affect the economic growth -
during the May correction last year when particularly badly affected developing
markets (including Russia), GDP growth in our country only accelerated. But if
the decline in the stock market will not hurt the economy too much, the global
recession could hit the most vulnerable place of Russia. Oil, gas and other raw
materials inevitably expensive, if the world economy was hoped the IMF still
follow the American. To understand how bad, Credit Suisse analysts' advice to
wait until autumn. In October, they estimated that the failure will peak on
mortgages in the United States. October 19 will be exactly 20 years black
Monday "when the Dow Jones index in a single day lost 22.6%.
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