BANCHE ITALIANE - GZ
By: GZ on Domenica 23 Gennaio 2011 03:46
I titoli bancari spagnoli sono rimbalzati tirandosi dietro quelli italiani, portoghersi e francesi dopo che la Spagna ha annunciato che può pompare 40 miliardi di euro nelle "cajas" la banche regionali quasi tutte fallite ormai per via dei prestiti ai costruttori. Anche l'euro è salito sulla notizia da 1.30 a 1.36
Leggere allora la magistrale intervista di oggi a Felix Zulauf, uno dei due o tre top investitori degli ultimi 30 anni in europa. Ci sarà una crisi per i bonds spagnoli e italiani entro aprile perchè i due paesi hanno quasi 300 miliardi di debito pubblico da rifinanziare, le banche hanno comprato loro IL 90% DELLE EMISSSIONI DI DEBITO PUBBLICOI SPAGNOLO E ITALIANO nel 2010 e la base di depositi sta riducendosi. In Italia e Spagna c'è un calo del 2-3% circa dei depositi della clientale, in parte soldi che escono all'estero e in parte l'economia che è fermsa.
Dato che le banche italiane grosse finanziano metà del bilancio sul mercato finanziario, pagano per finanziarsi con loro obbligazioni sopra il 4% e alcune quasi il 5%, sono già piene ora zeppe di bonds di cui si sono ingozzate nel 2009-2010, hanno meno depositi e gli stati devono emettere tanti bonds nei primi mesi dell'anno CI SARA' UN PANICO SUI BTP E TESOBONS SPAGNOLI. Sento in giro di banche piccole inguaiate, sentoi che le grandi stanno riducendo i mutui
SHORT LE BANCHE E L'EURO
"..in Spain and Italy; the banking industry's deposit base is going down. In 2009 the banks in Europe bought 90% of all the government paper issued. With the deposit base falling, medium-size banks in these countries can't get cheap financing from the ECB [European Central Bank]. They have to compete in the market, and market rates are going up. Funding costs are at 4% or higher in Italy and Spain. This will probably lead to a financial crisis in the first few months of this year, because the banking industry in Europe will be unable to buy all the paper coming to market..."
the situation in Europe. It is an epic drama, with more chapters to be written. From its birth, the euro was a misconstruction, with different economies, structures and productivities forced to have one currency, interest rate and monetary policy. Over time that creates tremendous imbalances between surplus and deficit countries. The bond markets mispriced bonds for some years, as the yields among the different countries converged. Now spreads are widening again, due to Germany's strength and the weakness in peripheral euro-zone economies. The financial crisis showed that Greece was basically bust.
In old times Greece would have devalued its currency and probably defaulted on its debt. The European Union wouldn't allow that, as it likely would have triggered another banking crisis in Europe. So Greece received more credit and has to get its budget in order, cutting spending and raising taxes. The result will be a recession for years to come. Even though they are raising tax rates, tax revenue probably won't go up because the economy keeps weakening. They are trapped in a deflationary spiral, and eventually there has to be a political decision that Greece will default. The bailout financed them fully for two years, so the problem could come in 2013.
Gross: There is another way that leakage occurs. When depositors no longer have confidence in Greek banking institutions, the money goes to the U.S. or Switzerland. It is not just the official debt but the deposits of the country that have to be secured.
Zulauf: That's a good point. You see the same thing now in Spain and Italy; the banking industry's deposit base is going down. In 2009 the banks in Europe bought 90% of all the government paper issued. With the deposit base falling, medium-size banks in these countries can't get cheap financing from the ECB [European Central Bank]. They have to compete in the market, and market rates are going up. Funding costs are at 4% or higher in Italy and Spain. This will probably lead to a financial crisis in the first few months of this year, because the banking industry in Europe will be unable to buy all the paper coming to market.
There are several ways to play this. You could short the euro against other currencies, including the dollar, which is trading at $1.295 to the euro. It could go below $1.20, but not for the whole year. That is why I would trade the position, not approach it as an investor. You could also short the European bond market. There are inefficiencies here. Italy is fundamentally sounder than Spain, but because 60% of Italy's debt is in domestic hands and only 40% of Spanish government paper is owned locally, Spain gets a double-A-plus rating from Standard & Poor's, while Italy gets an A-plus. Yet Spain's 10-year government-bond yield is 5.50%, and Italy's is 4.79%. There will be a refinancing crisis in Italy this spring, as the government has to refinance about €250 billion of debt. You could play it by shorting futures on Italian government bonds. Alternately, you could short the European banks.
How would you do that?
Zulauf: I would short Euro Stoxx Banks Index [SX7E] futures. The index trades at €160. One futures contract costs 50 times as much. The index might bounce in the short term, so it might be best to short the futures step by step. The index has a P/E [price/earnings multiple] of about 13 times 2011 bank earnings. The dividend yield is 3.5%, and the price to book value is 1.2.
MacAllaster: Would you short the Swiss banks too?
Zulauf: UBS [UBS] was the bank with the biggest problem, but it is working on it and has made good progress. It holds relatively little European paper compared with French and German banks, which are the most exposed.
Gross: Germany is at the core of the EU. It has a decent balance sheet and is an export dynamo, and it is prosperous in these relatively unprosperous times. To the extent that almost every other European market becomes infected, Germany is the recipient of funds seeking safety. But if Euroland has another financial crisis, funds in Germany might flee to the U.K. or the U.S.
Zulauf: The U.K. isn't a good place to flee to. But I agree that eventually German paper will be contaminated, because this is a political issue. The euro isn't just a currency. It is the symbol of European integration after the Continent's centuries of bloody battles. No government wants to enter the history books as the one that destroyed the symbol of European integration, and that is why the political will is there to hold on, even if the currency is a misconstruction. If you hold on, however, there are implications. Eventually you have to move from a monetary union to a transfer union. The Germans don't like that idea because they will have to pay for it. All they can do is bargain for a step-by-step approach to limit their potential liabilities.
Finally, I have talked about gold many times. Structural trends are in place for a continued rise of public-sector debt in the industrialized countries, a continued monetization of debt and continued debasement of currencies, all of which are bullish long-term for gold. The price of gold has run up to an extreme point, and gold is technically vulnerable to a big shakeout this year, particularly if emerging markets tighten and lift real interest rates. But shakeouts will be followed by higher prices, and would just represent opportunities to buy. Gold could fall to $1,150 or $1,200 from $1,370 now. I would be a buyer at those levels.
Felix Zulauf: Problems for Emerging Nations
Felix Zulauf, President of Zulauf Asset Managemet, talks to Barron's Michael Santoli at the Roundtable conference on the economic problems confronting emerging market countries and how they will try to deal with them.
How high is the upside?
Zulauf: Unlimited. What [Federal Reserve Chairman Ben] Bernanke is doing [buying up government debt to force down interest rates], others will do. The European Central Bank has tried to resist quantitative easing. It was the one major central bank that tried to sell part of the paper it bought on an emergency basis during the financial crisis. The first time it tried, it triggered the Greek crisis. The second time, it triggered the Irish crisis. Therefore, the ECB has to handle the European situation in a way that the weakest economies in the EU can survive. That forces it into monetary easing for a long time. That is bullish for gold. I don't know how high it can go, but I will give you a call when I think the run-up is over.
Do you like any gold stocks?
Zulauf: I am not a big fan of the stocks. The real costs for gold companies are rising about 15% a year. I would rather buy the physical stuff. There will be a time when the mining stocks outperform physical gold, but you have to time it.
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Jennifer Altman for Barron's
Faber: How many people in this room have more than 5% of their financial assets -- not their clients' but their own -- in gold? [Hands go up.]
MacAllaster: Ask how many have zero.
Faber: OK, who has zero? [More hands are raised.]
It's about even.
Zulauf: So despite the hoopla, investors don't own a lot of gold. As I mentioned earlier today, the value of the world's gold now represents only 0.6% the market capitalization of global equities, bonds and money-market funds, well below a peak of 3% in 1980. To get back to 3% would require about 65,000 tons of gold, or 20 to 25 years of production.
Cohen: One could argue that a ratio of equity-market capitalization isn't the right way to look at it because there have been so many changes in corporate structure since 1980. For example, 20 years ago the German corporate use of equities was small and the use of public markets wasn't significant, since so much was financed by the banking sector. There have also been large increases in equity capitalization in many emerging markets.
Zulauf: I'm not saying that ratio is the right ratio. I'm just giving you an example of how gold compares to some financial assets. Emerging markets have always debased their currencies, and the same is true for us. Gold traditionally has been the way to store wealth in the developing world, and it has fulfilled its role well. Those who had gold in Indonesia or Brazil or Russia were well off when the currencies collapsed.