Martes 09/08/11 La decision del Fed (operation twist)

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Eventos economicos

Martes


Optimismo de los pequenios negocios
Ventas de tiendas
Productividad y costos
Libro rojo
Subasta de bonos
Decision del Fed


NFIB Small Business Optimism Index
7:30 AM ET


ICSC-Goldman Store Sales
7:45 AM ET


Productivity and Costs
8:30 AM ET


Redbook
8:55 AM ET


4-Week Bill Auction
11:30 AM ET


3-Yr Note Auction
1:00 PM ET


FOMC Meeting Announcement
2:15 PM ET

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Au up 1,724

Oildown 79.44, debajo de 80

Bren 102.25

Yen up 77.60

Euro down 1.4157

Australia -3.90%, el Nikkie -3.70%, Korea -4.85%

Los futures del Dow Jones 100 puntos a la baja.

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El temor retorna para la banca

El miedo debido a la salud de la banca Americana retorna de manera muy grande.

La banca cayo 11% el Lunes en su peor caida de un dia desde Abril del 2009, los inversionistas cuestionan que tan bien la pasaran las gigantes financieras si la economia desacelera mas y a las turbulencias del mercado ante el downgrade de la deuda de US.

BAC fue la mas afectada, cayo 20% y el costo para asegurar su deuda subio 50%.

Fear Returns for U.S. Banks

By DAN FITZPATRICK
Fears about the health of the U.S. banking system are back in a big way.

Bank stocks plunged 11% Monday in their biggest one-day drop since April 2009, as investors questioned how well giant financial firms will weather a slowing economy and tumultuous markets after an unprecedented downgrade of U.S. debt.

Hardest hit was Bank of America Corp., which saw its stock tumble 20% and the cost of insuring its bonds against default surge 50%. Earlier this year, the bank was dangling a higher dividend before investors, but it has since dropped plans for a 2011 increase, people familiar with the matter said.

Also swooning were shares of Citigroup Inc., off 16%, and Morgan Stanley, down 14%.

The selloff sent regulators scurrying to reach out to bankers and investors, seeking to make sure markets continue to function smoothly. Plunging bank stocks can unnerve policy makers, because banks serve as a crucial link between savers and borrowers. Any pullback in bank lending could undermine what is already a weak recovery, raising the possibility of another recession.

"This is not Lehman II," said James Bianco, president of Bianco Research LLC, referring to the 2008 collapse of Lehman Brothers Holdings that sent markets into a tailspin. But "if banks' function is to facilitate credit, this makes it harder for them," he said.

For now, the damage appears confined to financial markets. Falling stock prices don't affect bank customers, and there are no imminent worries about big banks' access to funds. BofA, for instance, has the second-biggest U.S. branch network—which pays off by giving the bank ample, low-cost funding via its $730 billion in federally insured consumer deposits.

What's more, the biggest banks—including BofA; Citi; Morgan Stanley; J.P. Morgan Chase & Co.; Wells Fargo & Co., with the biggest U.S. branch network; and Goldman Sachs Group Inc.—have more liquidity and capital than they had when the financial crisis erupted in 2008. They didn't report any problems obtaining funding Monday.

But doubts about their health weighed heavily on stocks, with the Dow Jones Industrial Average sliding 5.5% to 10809.85.

In Washington, D.C., bank supervisors reached out to large financial companies Monday to ensure the U.S. debt downgrade didn't upset financing markets. Officials also closely watched the vital repurchase, or "repo," market, where banks, companies and money-market mutual funds lend cash overnight in exchange for Treasurys and other securities that are returned the next day.

Several bankers in contact with government officials said the sentiment conveyed was a higher level of concern than at other times in recent weeks, but well short of the near-panic of 2008 and early 2009.

At the Treasury Department, officials reached out to investors and others, domestically and internationally, to monitor markets, with Secretary Timothy Geithner receiving regular updates, an official said.

The negative news hits banks at a weak point. Bank analyst Mike Mayo, of Crédit Agricole Securities, predicts U.S. banks are facing their slowest revenue growth since 1938, as shareholders fret over the impact of U.S. regulatory reform, higher capital requirements from regulators and weak loan demand.

For Bank of America, its problem heading into Monday's trading was that no U.S. bank was more closely tied to the performance of an ailing U.S. economy. Particularly weighty for investors is BofA's 2008 purchase of troubled mortgage lender Countrywide Financial Corp.

On Monday, investors woke up to more bad news when insurer American International Group Inc. sued the bank for $10 billion, seeking to recover the money it lost on poor-performing mortgage-backed securities. AIG also said it would challenge a recent $8.5 billion bank settlement regarding mortgage bonds. More untimely disclosures haunted the bank throughout the day. Hedge-fund manager David Tepper, who had been a champion of financial stocks, sold half of his shares in the bank, according to a securities filing. Mr. Mayo, the analyst, put out a note saying he had downgraded the bank, and that it "can't rule out" a new capital raise.

In echoes of 2008, rumors began to circulate about funding problems, said John McDonald, an analyst with Sanford C. Bernstein & Co. But Bank of America didn't have problems Monday attracting funding or rolling over commercial paper, said three people close to the situation. "So far, so good," one of these people said.

Banks have more capital and liquidity than they did in 2008. But many banks, including Bank of America, are restricted from returning that capital to shareholders because of lingering regulatory concerns about their strength.

The Charlotte, N.C., bank recently filed a new capital plan with the Federal Reserve that doesn't ask for a dividend increase in 2011, said people familiar with the situation. The move represents another retreat for Chief Executive Brian Moynihan, who earlier hinted that a second-half increase was likely. A bank spokesman declined to comment about the capital plan.

Despite the steep decline in Bank of America shares, Mr. Moynihan isn't in trouble with his board, nor is there any discussion among the management team about breaking up the institution or selling off some of its prized assets, said a person close to the situation.

The bank this fall is expected to announce some job cuts and expense savings as a way of showing investors Mr. Moynihan is getting a handle on the company.

A spokesman said there is "no change in business strategy as a result of the events of the last several days."

—Liz Rappaport, Damian Paletta and Aaron Lucchetti contributed to this article.
Write to Dan Fitzpatrick at dan.fitzpatrick@wsj.com

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Los hedge funds vendieron el Lunes.

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Los mercados emergentes comenzaron a restringir el credito. Mas evidencia de la desaceleracion global.

Korea -4.91%

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El Nikkei -3.71%, Australia -3.66%. Korea -4.86%

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QE3. Operacion "Twist". Rebajar el IOER

Le quedan pocas opciones a Bernanke

1. Bernanke podria decir que mantendra los intereses bajos por mucho, mucho, mucho tiempo, en lugar de "un tiempo prolongado" para empujar a los inversionistas a comprar activos con mas riesgo. Ya el mercado sabe que no subiran los intereses hasta el 2013. Asi que no tendra efecto.

2. Mas compras de activos o quantitative easing. Tercera ronda o QE3, el problema es que si tiene el mismo o menor efecto que el QE2....la respuesta sera muda.

3. Operation "Twist" el Fed podria canjear los activos de menor madurez a activos con madurez mas larga. La mayoria de las compras del Fed maduran a 3 anios, El problema es que eso se hizo en 1960 sin mayor impacto en la creacion de empleo o la economia real.

4. Reabajar el IOER o sea rebajar el 0.25% que el Fed le paga a la banca por el exceso de sus reservas. Esa medida podria vaciar los fondos de money market sin hacer nada para ayudar a dar mas prestamos.

O sea que estamos jodidos, que mas pueden hacer?

The Fed's Uninspiring Options

By KELLY EVANSLike this columnist

QE3. "Operation Twist." Lowering the IOER.

These may sound like a type of code, but they actually are some of the last-ditch steps the Federal Reserve could take to try to inject further life into the economy, or counter any market upheaval caused by the late-Friday downgrade of the U.S.'s top-notch credit rating. Trouble is, there's little evidence they would do any good.

Few options for Federal Reserve Chairman Ben Bernanke
.Perhaps the simplest move—and most likely, for now—is for the Fed to just reiterate that it is likely to leave rates near zero for a really, really extended period of time, as opposed to just an extended period. The Fed could do so as soon as Tuesday in the statement following its next meeting. If so, that could potentially pull down long-term interest rates and push investors into riskier assets like stocks.

But given that economists at Goldman Sachs, Bank of America Merrill Lynch and elsewhere already expect the Fed to be on hold through 2013, the impact of a linguistic tweak would likely be small. More extreme would be if the Fed announced a third round of bond purchases, known as "quantitative easing," to crowd investors out of Treasurys and spur risk-taking. Yet if a QE3 were to play out anything like its predecessors, the effect on growth and job creation would be muted. Plus, each successive round is likely to get less bang for the buck.

.Another option is for the Fed to shift its bond holdings or future purchases toward government debt with longer maturities. Some call this "Operation Twist," after a similar measure enacted in the 1960s. As Jefferies & Co. points out, the largest share of the Fed's holdings has a maturity of less than three years. Still, it isn't clear this would have much of an impact. As Barclays Capital notes, the effort in the 1960s seemed to have little effect on stocks or the real economy.

What about the IOER option, which involves lowering the 0.25% interest rate the Fed pays banks on their excess reserves? That could end up wiping out money-market funds without doing anything to spur bank lending, says BarCap strategist Joseph Abate. "I think it would be more disruptive than productive, frankly," he cautions.

Given these uninspiring policy options, the same could be said of the Fed if it decides to act.

Write to Kelly Evans at kelly.evans@wsj.com

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El petroleo cae debajo de $80 a su precio mas bajo en 10 meses, debido al downgrade y al alza de los inventarios.

Los futures bajaron 2.3% despues de haber bajado 6.4% el Lunes.

Hasta que no veamos que la confianza vuelva al consumidor en US, la situacion probablemente no va a cambiar mucho en terminos de un rally y un mejor precio.

Crude Declines to 10-Month Low on U.S. Rating Downgrade, Rising Stockpiles
By Ben Sharples - Aug 8, 2011 8:49 PM ET .
Oil dropped below $80 a barrel in New York, falling to the lowest in more than 10 months, as the U.S. credit rating cut and rising stockpiles stoked concern an economic slowdown will worsen, reducing fuel demand in the world’s biggest crude consumer.

Futures slipped as much as 3.3 percent today, following a 6.4 percent plunge yesterday. U.S. equities slumped the most since December 2008 in the first trading session since Standard & Poor’s Aug. 5 downgrade. An Energy Department report tomorrow may show crude inventories climbed for a third week.

“Until we can see some confidence coming back to the U.S. consumer, the situation is probably not going to change that much in terms of another strong price rally,” said David Lennox, a resource analyst at Fat Prophets in Sydney, who kept his forecast for New York crude to average $115 this year. “A recession would obviously have the potential to reduce consumption and that will place pressure on prices.”

Crude for September delivery fell as much as $2.69 to $78.62 a barrel in electronic trading on the New York Mercantile Exchange, the lowest intraday price since Sept. 30. It was at $78.71 at 10:41 a.m. Sydney time. The contract yesterday tumbled $5.57 to settle at $81.31. Prices are down 17 percent in August and 14 percent lower in 2011.

Brent oil for September settlement was at $101.88 a barrel after decreasing as much as $1.97 to $101.77 on the London-based ICE Futures Europe exchange. The European benchmark contract was at a $22.74 premium to U.S. futures, compared with the record close of $22.67 on Aug. 2.

Implied Volatility
New York futures have tumbled 32 percent since reaching a two-year high of $114.83 in intraday trading on May 2. Implied volatility for at-the-money options expiring in September, a measure of expected price swings in futures and a gauge of options prices, was at 68.7 percent at 3 p.m. in New York, up from 40.9 percent Aug. 5.

The Energy Department report tomorrow may show crude oil supplies increased 1.5 million barrels in the seven days ended Aug. 5 as the government released barrels from the Strategic Petroleum Reserve, according to the median of eight analyst estimates in a Bloomberg News survey. Gasoline inventories probably climbed 900,000 barrels, the survey shows.

The Standard & Poor’s Index lost 6.7 percent to 1,119.46 at the 4 p.m. close in New York, its lowest level since September, as all 500 stocks fell for the first time since Bloomberg began tracking the data in 1996. Japan’s Topix Index fell 3.5 percent at 9:27 a.m. in Tokyo and is headed for its lowest close since March 2009.

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Au up 1,730

Oil down 77.32

El Nikkei-4.06%

Los futures del Dow Jones 154 a la baja.

Ag down 38.85

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Euro up 1.4179

VIX up 48

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Nublado el panorama. No se ve nada claro.

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La bolsa de Australia entra al bear market.

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-177

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Desde su punto mas alto en Abril Asutralia ha perdido 20%, bear market.

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El short selling contra Petrobas se triplica. La accion cayo 7.6% el Lunes debido a la caida del petroleo.

La presidenta de Brasil le pide a los Brasileros que sigan consumiendo ante la caida de su bolsa a niveles del 2009.