Why should the current crisis? Adapt or die 
Crisis, crisis, crisis .... is the word that did not stop to hear on television, radio or read newspapers. It seems incredible that the media are so fascinated with bad news.
Una amiga coach, Pilar Herrero, me envió este artículo muy interesante titulado
"Explicación a la crisis financiera que nos azota" así que lo comparto con vosotros.
"Me han hecho llegar esta buena explicación sobre la crisis financiera que azota los mercados desde que se destapo la crisis de las hipotecas subprime en USA. Me ha perecido muy interesante y formativa así que he pensado que valía le pena reproducirla aquí:
CRISIS 2007-2008. La historia es la siguiente:
1.Durante años, los tipos de interés vigentes en los mercados financieros internacionales han sido excepcionalmente bajos.
2.Esto ha hecho que los Bancos hayan visto que el negocio se les hacía más pequeño:
a.Daban préstamos a un bajo interés
b.Pagaban algo por los depósitos de los clientes (cero si el depósito está en cuenta corriente y, si además, cobran Comisión de Mantenimiento, pagaban “menos algo”)
c.Pero, con todo, el Margen de Intermediación (“a” menos “b”) decrecía
3.A alguien, entonces, en América, se le ocurrió que los Bancos tenían que hacer dos cosas:
a.Dar préstamos más arriesgados, por los que podrían cobrar más intereses
b.Compensar el bajo Margen aumentando el número de operaciones (1000 x poco es más que 100 x poco)
4.En cuanto a lo primero (créditos más arriesgados), decidieron:
a.Ofrecer hipotecas a un tipo de clientes, los “ninja” (no income, no job, no assets; o sea, personas sin ingresos fijos, sin empleo fijo, sin propiedades)
b.Cobrarles más intereses, porque había más riesgo
c.Aprovechar el boom inmobiliario que había en el mercado norteamericano
d.Además, llenos de entusiasmo, decidieron conceder créditos hipotecarios por un valor superior al valor de la casa que compraba el ninja, porque, con el citado boom inmobiliario, esa casa, en pocos meses, valdría más that the amount given on loan. EA
such mortgages, were called "subprime"
i.Se
called "prime mortgages" which have little risk of default. On a rating scale between 300 and 850 points, prime mortgages are priced between 850 and 620 points the best the less good.
ii.Se called "subprime mortgages" which are more likely to default and are priced between 620 and 300 the least good, the bad.
f.Además, as the U.S. economy was going well, the now insolvent debtor could find work and pay the debt without problems.
g.Este approach was good for some years. In those years, the ninja were paying the mortgage terms and also as they had been given more money than her house was worth, had bought a car, had made reform at home and had gone on vacation with family . This, surely, in installments, with the extra money they had collected and, in some cases, which were paid in a botched job or that they had achieved.
5.1er. Comment: I think, so far, everything is clear and it is clear that anyone with common sense, although not a financial expert, you may think that if something fails, the bump may be important.
6.The As to the second (increased number of operations):
a.com many banks were giving mortgages, they had the money. The solution was easy: go to foreign banks to lend them money, because something is globalization. Thus, the money that I, this morning, I joined the Central Office Savings Bank of San Quirico Safaja may be that afternoon in Illinois, because there is a bank which my Savings Bank has paid my money to lend it to a ninja. Of course, Illinois does not know that the money comes from my people, and I know that my money would be deposited in an institution as I Savings Bank begins to be at some risk. Neither does the Director of the Office of my box, who knows, and presumably that would work in an institution. Neither does the President of the Savings Bank, which is only known to have invested some money of its investors in a major U.S. bank.
7.2 ° comment: globalization has its advantages but also disadvantages, and its dangers. The people of San Quirico not know they are taking a risk in the U.S. and when he begins to read that there are subprime mortgages, thinks: "What these Americans are crazy!"
8.Además, it appears that there are "Rules Basel, que exigen a los Bancos de todo el mundo que tengan un Capital mínimo en relación con sus Activos. Simplificando mucho, el Balance del Banco de Illinois es:
ACTIVO PASIVO
Dinero en Caja Dinero que le han prestado otros Bancos
Créditos concedidos Capital
Reservas
TOTAL X millones X millones
Las Normas de Basilea exigen que el Capital de ese Banco no sea inferior a un determinado porcentaje del Activo. Entonces, si el Banco está pidiendo dinero a otros Bancos y dando muchos créditos, el porcentaje de Capital sobre el Activo de ese Banco baja y no cumple con las citadas Normas de Basilea.
9.Hay que inventar algo nuevo. Y eso nuevo se llama Titulización: el Banco de Illinois “empaqueta” las hipotecas -prime y subprime- en paquetes que se llaman MBS (Mortgage Backed Securities, o sea, Obligaciones garantizadas por hipotecas). O sea, donde antes tenia 1.000 hipotecas “sueltas”, dentro de la Cuenta “Créditos concedidos”, ahora tiene 10 paquetes de 100 hipotecas cada uno, en los que hay de todo, bueno (prime) y malo (subprime), como en la viña del Señor.
10.El Banco de Illinois va y vende rápidamente esos 10 paquetes:
a.¿Dónde va el dinero que obtiene por esos paquetes? Va al Activo, a la Cuenta de “Dinero en Caja”, que aumenta, disminuyendo por el mismo importe la Cuenta “Créditos granted ", so that the proportion Capital / Loans granted improvement and Bank Balance complies with the Basel Standards.
b. Who buys these packages and also buy them quickly so that the Bank of Illnois "clean" their balance immediately? Very good question! Illinois Bank creates affiliated entities, the conduits, which are not companies, but trusts or funds, and therefore are not required to consolidate their balance sheets with the parent bank. That is, suddenly appear on the market two types of entities:
i.El Illinois Bank, with a clean face
II.The Chicago Trust Corporation (or the name that you please put), with the following balance: ASSETS LIABILITIES
The 10 packages of mortgages Capital:
what you pay for those packages
11.3er. Comment: If any person working in the Savings Bank of San Quirico, from President to Director of the Office know anything about this, quickly look for another job. Meanwhile, everyone is talking about expanding their international investments, of which you see I do not have the slightest idea.
12. How are funded conduits? In other words, where do they get money to buy the Bank of Illinois mortgage packages? In several places:
other credits a.Mediante Banks (4 º Review: The ball is getting bigger)
b.Contratando services investment banks can sell the MBS to Investment Funds, Venture Capital, Insurance, Financial Holding companies of their family. (5 º Comment: Notice that the danger we are getting closer, not Spain, but to our family, as well, encouraged by the Director of the office of San Quirico, go and put my money in an investment fund)
c . What happens is that to be "financially correct" or MBS conduits had to be well-qualified rating agencies that give ratings in terms of solvency. These ratings say, "this company in this State, this organization can lend money without risk," or "beware of these other because you risk not being paid."
d.Incluyo here what I said the word "Rating" of this dictionary, so to have it all on the same block:
RATING. Rating of a company or an institution, made by a specialized agency. In Spain, the lead agency in this field is Fitch Ratings.
The levels are:
AAA, the highest AA
A BBB BB
others, but very bad
In Overview:
a bank or large usually has a rating of AA
A Bank or medium, a rating of A
e.Las rating agencies gave these ratings or were given other names, more sophisticated, but at end, say the same thing: They called
:
to investment grade MBS representing prime mortgages, or those of least risk (be the AAA, AA and A)
Mezzanine, the intermediate (I assume that the BBB and maybe BB)
Equity to poor, high risk, ie the subprime, that in this racket are the stars
f.Los Investment Banks placed easily the best (investment grade) to conservative investors, and low interest. G.Otros
Fund Managers, Venture Capital, etc., more aggressive. sought, at all costs, higher returns, among other reasons because these gentlemen come to the year-end bonus depending on the profitability.
h.Problema: How to sell MBS of bad managers latter without being noticed too that they are incurring excessive risk?
i.6 No Comment: The plot thickens and, of course, the Savings Bank of San Quirico continue making statements Expansion happy and content, speaking for the smooth running of the economy and Social Work they are doing.
j.Algunos managed investment banks, from a re-rating agencies (a re-rating, a word that does not exist, but it serves to understand)
k.El re-rating is an invention to increase the rating MBS bad, that is:
i.Estructurarlos in sections, which are called tranches, ordering, from highest to lowest, the probability of a default, and the commitment to prioritize the payment to the least bad. Ie
1.I bought a package of MBS, which tell me that the first three MBS are relatively good, the three seconds, very regular and the three others, frankly bad. This means that I have structured the package MBS in three tranches: the relatively good, very consistent and very bad.
2.Me pledge that if the tranche will not pay very bad (or as they say these gentlemen, if in the wrong section incur in default), but collecting some of the very regular and quite tranche of relatively good, everything will go to pay tranche mortgages relatively good, so automatically, this tranche will be rated AAA.
3. (7 Commentary: In the "Commentaries of Economic Situation of IESE, January 2008, I've got most of what I am saying, we call this" financial magic ")
ii . To finish rolling to San Quirico, sorted these MBS tranches were renamed as CDO (collateralized debt obligations, collateralized debt obligations), as they could have taken another exotic name.
iii.No happy with this, the financial wizards created another important product, the CDS (Credit Default Swaps) In this case, the purchaser, who bought the CDO, assuming a risk of default by the CDO to buy, charging plus interest. So, bought the CDO and said, "if it fails, I lose money. If no failure, plus interest payment. "
iv.Siguiendo with inventions, created another instrument, the Synthetic CDOs, which have not fully understood, but surprisingly gave a yield high. V.Más
still, those who bought the Synthetic CDO could buy very cheap bank loans. The difference between these interests very cheap and high yields of Synthetic operation was extremely profitable. 13.Al
get here and hoping that ye are not lost too much, I remember one thing that you may have forgotten, given the complexity of the operations described, that everything is based on the ninjas pay their mortgages and that the U.S. housing market continues to rise.
14.PERO:
aA early 2007, U.S. home prices plummeted.
b.Muchos of ninjas realized they were paying more than their home was worth and decided now, or unable, to continue paying their mortgages.
c.Automáticamente, nobody wanted to buy MBS, CDO, CDS, Synthetic CDOs and those who already had failed to sell. D. All of the assembly
sank and one day, the Director of the Office of San Quirico a neighbor called to tell him that good, that the money was gone, or at best, had lost a 60% of its value.
e.8 No Comment: Go now to explain to the resident of San Quirico what the ninjas, the Bank of Illinois and the Chicago Trust Corporation. You can not be explained by several reasons: the most important, because nobody knows where that money. And when I say nobody, I mean ANYONE.
f.Pero things go further. Because no one-not-know the crap they have in banks that bought mortgage packages, and as anyone knows, the banks start to not trust each other. G.com
not trust when they need money and interbank market, where banks lend money to each other, or lend it or lend it expensive. The interest that banks lend money in the interbank Euribor (Europe Interbank Offered Rate, or Interest rate offered on the interbank market in Europe), a rate which, as you can see the term 3-MONTH EURIBOR this Dictionary, has gone up (now beginning to fall.)
h.Por So far banks have no money. Consequences:
i.No
noncredit
ii.No give mortgages, so that Astroc, Renta Corporation, Colonial, etc., I start to go terribly wrong. And shareholders who bought shares in these companies, they see that the prices of these companies are falling sharply.
III.The 12-month Euribor, which is the benchmark for mortgages has been rising (see Word mark EURIBOR 12 MONTHS in the Dictionary), which makes the average English mortgage you have, start to sweat to pay monthly fees. (He has now started to decline)
iv.Como Banks have no money,
1.Venden their holdings in their buildings
2.Venden
3.Make metamos campaigning for money, offering better conditions
v.
As people begin to feel squeezed by the mortgage payment, unless the Court is English.
vi.Como the English Court notices, purchase unless the manufacturer of socks Mataró, not the ninja knew existed.
vii.El think socks manufacturer, socks and sell less, starts to staffing and fire a few.
viii.Y this is reflected in the unemployment rate, mainly in Mataró, where people start buying less in stores.
15.Esto is a dictionary of words. What happens is that the word "Crisis 2007-2008" is very serious. The title is misleading, considering that the crisis will end in 2008. Now comes another question: "How long will this last?
16.Pues very good question, too. very difficult to answer, for several reasons:
a.Porque is still not know the extent of the problem (the numbers vary from 100,000 to 500,000 million dollars)
b.Porque not know who is affected. It is not known if my bank, the lifelong, serious Bank and tradition in the area, has a lot of crap on the Assets. The downside is that my bank does not know.
c.Cuando in America mortgage defaults by ninja go running, that is, banks can sell foreclosed houses for the price it is, something worth the MBS, CDO, CDS and even Synthetic.
d.Mientras therefore, no one trusts anyone.
17.9 º Review:
a.Alguien has described this as "big scam"
b.Other
have said the Crash of 29, compared to this, is a game of girls in a playground
nunnery
c.Bastantes, many may have been enriched with the bonus that have been growing. Now will lose their jobs but have the bonus saved somewhere, perhaps in a shielded enclosure that may be where more secure and protected from other financial innovations that can happen to anyone.
d.Las financial authorities have a great responsibility for what happened. The Basel Accords, theoretically designed to control the system, have stimulated SECURITISATION to extremes able to obscure and very complicated market to which it was intended to protect. E.Los
boards of financial institutions involved in this great fiasco, have a great responsibility, because they have not heard anything. And there included the Board of Directors of the Savings Bank of San Quirico.
f.Algunas rating agencies have been incompetent or not independent from their clients, which is very serious
18.Fin of history (for now): the main central banks (European Central Bank, the Federal Reserve U.S.) have been injecting cash flow for banks to have money. 19.Hay
experts who say that there is money, but what is missing is confidence. In other words, the liquidity crisis is not a real crisis of trust of others.
20.Mientras therefore, sovereign funds, or mutual funds created by states with resources from surplus in their accounts (mostly from oil and gas) and the Funds of the United Arab Asian countries, Russia, etc., are buying stakes in major U.S. banks to get them out of the jam they have gotten.
Posted by Nacho Giral in
http://www.nachogiral.com/2008/03/explicacin-la-crisis-financiera-que-nos.html What do you think? Can we do something during this crisis? What anti-crisis strategies you can share with others? Images
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