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CD 87-2º De Alcance SECRETARIA DE ESTADO DE ECONOMÍA, MINISTERIO SECRETARÍA GENERAL DE POLÍTICA ECONÓMICA DE ECONOMÍA Y ECONOMÍA INTERNACIONAL Y HACIENDA SUBDIRECCIÓN GENERAL DE ECONOMÍA INTERNACIONAL CUADERNO DE DOCUMENTACION Número 87-2º (alcance) Anexo II Alvaro Espina Vocal Asesor 20 Abril de 2009 BACKGROUND PAPERS (continuación): 68. U.S. Credit Card Delinquencies At Record Highs: Same Dynamics As Mortgages?, RGE Monitor… 251 69. Obama’s Ersatz Capitalism, by Joseph E. Stiglitz… 253 70. How Much Will U.S. Housing Prices Fall And How Long Will The Downturn Last?, RGE Monitor… 255 71. U.S. Housing Starts and New Home Sales Improve, Permits Still Weak: Is the Sector Stabilizing?, RGE Monitor… 256 72. A task fit for Herculean policymakers, by Gillian Tett… 258 73. Japan PM attacks Merkel’s complacency, Eurointelligence… 260 74. The Future of Investing: Evolution or Revolution?, by Bill Gross… 263 75. Playing Solitaire with a Deck of 51, with Number 52 on Offer, by Paul McCulley… 267 76. Reading Krugman, thefinancebuff.com… 272 77. Are ABX Derivatives Prices An Accurate Measure of Subprime RMBS and CDO Valuations?, RGE Monitor…274 78. America the Tarnished, by Paul Krugman… 276 79. Obama’s Nobel Headache, by Evan Thomas… 278 80. The G20: expect nothing, hope for the best and prepare for the worst, by Willem Buiter… 283 81. Does Obama Have a Plan B?, by Adam S. Posen… 289 82. New home sales is this bottom?, calculatedrisk… 292 83. The Mega-Bear Quartet, calculatedrisk… 293 84. Forecast: Two-thirds of California banks to face Regulatory Action, Calculatedrisk…294 85. Q1 GDP will be Ugly, Calculatedrisk… 294 86. February PCE and Personal Saving Rate, Calculatedrisk… 296 87. Revisiting the Global Savings Glut Thesis, by Doug Noland… 298 88. We need a better cushion against risk, by Alan Greenspan… 302 89. Zapatero favours a new round of stimulus spending, Eurointelligence… 305 90. Battles Over Reform Plan Lie Ahead, by Edmund L. Andrews…307 62 91. As Oversight Plan Is Unveiled, Turf Battle Begins to Unfold Rival Regulators Argue for Right to Expanded Authority, by Zachary A. Goldfarb, Binyamin Appelbaum and Tomoeh Murakami Tse… 309 92. RTC All Over Again, Hedgefundnet... 311 93. Geithner to Propose Vast Expansion Of U.S. Oversight of Financial System, by Binyamin Appelbaum and David Cho… 312 94. Time For A New Insolvency Regime For Non-Banks And Bank Holding Companies?, RGE Monitor… 315 95. Blueprint for Regulatory Reform: Regulation By Activity For Everybody Rather Than By Institution?, RGE Monitor… 316 96. Will The Fed's PPPIP Get Credit Flowing Again?, RGE Monitor... 317 97. Details Of Geithner's Public-Private Partnership: Large Taxpayer Subsidies For Toxic Asset Investors, RGE Monitor… 319 98. Can Geithner's Toxic-A+sset Plan Work?. The Treasury Secretary's plan to rid banks of bad loans faces plenty of roadblocks. Only time will tell if it can succeed, by Jane Sasseen… 322 99. Commercial Real Estate Bust Has Started: Access To TALF Just In Time?, RGE Monitor… 324 100. Is the EU run by a madman?, Eurointelligence… 326 101. Geithner Affirms Dollar After Remarks Send It Tumbling, by Anahad O’Connor... 330 102. Las turbulencias de la economía hacen caer a tres gobiernos de Europa del Este, por Cristina Galindo… 332 103. En medio de la crisis: la sequía de crédito, por Miguel Boyer Salvador… 334 104. Economists React: ‘Has Housing Hit Bottom?’, Posted by Phil Izzo… 337 105. New Home Sales: Is this the bottom?, Calculatedrisk… 339 106. Los hedge funds vuelven al punto de mira de los reguladores Universia-Knowledge@Wharton... 342 107. Is it back to the Fifties?, by John Authers… 347 108. Regional Banks Are the Future, por Meredith Whitney… 352 109. Dissecting Bank Plan for a Way to Profit, by Graham Bowley and Mary Williams Walsh… 353 110. Chris Carroll Reassures Me that I Am Not Crazy..., by Brad Delong… 356 63 111. Treasury rewards waiting, By Christopher D. Carroll… 356 112. Geithner’s plan, FT Lex… 358 113. Will the Geithner Plan Work?, NYT Editors (4 opinions: Paul Krugman, Simon Johnson, Brad DeLong and Mark Thoma)… 359 114. Dear A.I.G., I Quit!, by Jake DeSantis… 365 115. China Proposes a Shift to the SDR: Is it ready for A Global Role?, RGE Monitor… 368 116. Funding the Fed: Precedents and Purposes for Issuing Federal Reserve Bills, RGE Monitor… 369 117. U.S. Plan Seeking Expanded Power in Seizing Firms, by Edmund L. Andrews and Eric Dash… 371 118. U.S. Seeks Expanded Power to Seize Firms Goal Is to Limit Risk to Broader Economy, by Binyamin Appelbaum and David Cho… 373 119. Reactions to the Geithner Plan, by Adam Posen… 375 120. Fiscal dimensions of central banking: The fiscal vacuum at the heart of the Eurosystem and the fiscal abuse by and of the Fed, by Willem Buiter… 376 121. The Treasury’s Financial Stability Plan: Solution or Stopgap?, by Adam S. Posen... 389 122. Geithner’s trillion dollar gamble, Eurointelligence… 391 123. Geithner plan arithmetic, by Paul Krugman… 393 124. Prices of most-traded risky loans recover, by Anousha Sakoui… 395 125. The threat posed by ballooning Federal reserves, by John Taylor… 396 126. Financial de-globalization, illustrated, by Brad Setser…398 127. Reorganising the banks: Focus on the liabilities, not the assets, by Jeremy Bulow and Paul Klemperer… 402 128. Global imbalances and the crisis: A solution in search of a problem, by Michael Dooley and Peter Garber… 407 129. Mistakes Beget Greater Mistakes, by Doug Noland… 411 130. A Proven Framework to End the US Banking Crisis Including Some Temporary Nationalizations, by Adam S. Posen… 414 131. The new Geithner plan is a flop, by Luigi Zingales… 426 132. Exclusive: PIMCO to participate in U.S. toxic asset plan, Reuters… 428 64 133. Saving Capitalistic Banking From Itself , by Paul McCulley… 430 134. Managing the Bailout: He’d Do It for Nothing, by Edward Wyatt… 435 135. How Main Street Will Profit, by William H. Gross… 438 136. It's the Housing Market Deflation, by William H. Gross… 439 137. Why We Need a Housing Rescue, by William H. Gross… 440 138. William H. Gross — The King: “If Any One Man has put Bonds on the Map, it's Bill”, by Money Masters… 443 139. Guess Who Really Pays the Taxes, by Stephen Moore... 445 65 Apr 1, 2009 U.S. Credit Card Delinquencies At Record Highs: Same Dynamics As Mortgages? Overview: U.S. credit card defaults rise to 20 year-high. Analysts estimate credit card chargeoffs could climb to between 9 and 10% this year from 6 to 7% at the end of 2008. In that scenario, such losses could total $70 billion to $75 billion in 2009 (Reuters). Meanwhile, the $5trillion in outstanding credit card lines (of which $800bn is currently drawn upon) are being trimmed even for credit worthy borrowers with Meredith Whitney estimating that over $2 trillion of credit-card lines will be cut in 2009 and $2.7 trillion by the end of 2010. Research shows that unemployment is one of the most important drivers of credit card and auto loan loss rates. RGE (Kruettli) estimates that credit card charge-off rate could reach 13% (or $146bn) in the worst case scenario. o March 16 Reuters: losses particularly severe at American Express and Citigroup amid a deepening recession. AmEx, the largest U.S. charge card operator by sales volume, says net charge-off rate rose in February to 8.7% from 8.3% in January as job losses accelerated and the economy deteriorated. Citigroup -- one of the largest issuers of MasterCard cards -- default rate soared to 9.33 percent in February, from 6.95 percent a month earlier. o cont.: Positive surprises: JPMorgan Chase and Capital One reported higher credit card losses, but they were below analysts expectations. o BNP March 16: AAA ABS Benchmark Spreads Improve In View of $1000bn TALF liquidity program , Fixed Rated ABS Spreads Stay High. o Fitch March: In January, credit card delinquencies breached all-time highs for the second consecutive month according to the latest Fitch Credit Card Index results. At January month end, the 60 plus day delinquency rate was 4.04%. The results come amid an unending parade of troubling economic data from surging unemployment to steeper declines home and equity market values. o Moody's: January credit card charge-offs reached a record-high 7.74%, and with an increasing number of borrowers falling behind on their credit card payments charge-off rates will almost certainly increase in the coming months. The seasonal post-holiday rebound in payment rates did not materialize this January, leaving the payment rate index, which has been falling since early 2007, near a five-year low. The payment rate has been falling since early 2007. (research recap) o Meredith Whitney (via WSJ) March 10: Currently, there is roughly $5 trillion in credit-card lines outstanding in the U.S., and a little more than $800 billion is currently drawn upon. Just six months ago, I estimated that at least $2 trillion of available credit-card lines would be expunged from the system by the end of 2010. However, today, that estimate now looks optimistic, as available lines were reduced by nearly $500 billion in the fourth quarter of 2008 alone. My revised estimates are that 251 over $2 trillion of credit-card lines will be cut inside of 2009, and $2.7 trillion by the end of 2010.--> see Credit Card Reform: What Impact On Consumers? On Banks? On Investors? cont.: Currently five lenders dominate two thirds of the market. o SIFMA: Q4 2008 marked the first time ever that four of the major sectors (home equity, credit card, student loan, and equipment leases) had no issuance.
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