Schlagwort-Archive: finance

Kim Jong Un and Putin negotiating UN sanctions

North Korea‘s president Kim Jong Un and Russian president Vladimir Putin meet in Wladivostok to diskuss the relations between the two communistic countries. For North Korea it is very urgent and important to find agreements in foreign trade solutions. The situation is very difficult because the UN sanctions will change the situation by the end of 2019.

The UN sanctions to North Korea forbid wide range trading in agriculture, industrial products and also in the sector of service, maintaining in both directions. The sanctions also include the financial sector where the fincial institutes have to leave North Korea and any cooperation is forbidden. North Korea is forbidden to export seafood and to sell fishing rights. Also the transport companies of North Korea are facing sharp restrictions. UN sanctions allow only the import of food in the range that human rights are given.

North Korea has a big problem to nourish it‘s people. It was short in 2018 and will be more in 2019 if it can‘t find relief.

At least the border to North Korea is closed and international financial transactions are nearly impossible.

North Korea must also looking to develop economic ties with Russia to lessen its dependency on China. In an interview with China’s official People’s Daily Putin said: „China can’t help as it is in the middle of a trade war with the US and Kim can’t visit Beijing because he might lose face if he makes his fifth China trip.“

On 22 December of 2019 UN sanktion forbid North Koreans to work in foreign countries. There are 10,000 North Koeans working in the agricultural sector of Russia. They are doing work no Russian wants to do. They have to leave if Russia will not infringe UN sanctions. North Korea will loose mio of $ of income it‘s people earn. The situation on the food sector will get more dramatic.

The negotiation between US President Trump and North Korea‘s stopped, because USA wanted from North Korea to say uncle to it‘s atomic and rocket programm. North Korea said it would do that, if the USA will stop the sanctions against it. North Korea blow up it‘s base where it tests atomic bombs. In exchange it demands from the USA to loosen up the sanctions. But the USA denied it.

The unseccessfully negotiations between USA and North Korea will drive North Korea into the influence of Russia and China. Even if China can‘t help now are both countries friends of North Korea over decades. Also the wall between North Korea and South Korea is getting porous.

If North Korea is able to negotiate with South Korea bilateral cooperation the state of the USA in the region will get weak.

You will find the UN sanctions at:

https://www.un.org/securitycouncil/sanctions/1718

Intesa Sanpaolo merged with Banca Populare di Vicenca and Veneto Banca and 17 mio € state aid

Intesa Sanpaolo is Italy‘s 4th biggest Corporate and second biggest bank. It has with 3,900 branches the largest domestic network, 13% market share and 11.1 million clients. It‘s turnover is 49.9 bio $ with a profit of 4bio$. Intesa say that it has particular strength in the wealthiest areas of Italy: strong retail presence covering more than 70% of Italian household wealth. Intensa has branches and represantative offices on every continent.

This conglomerate merges with Banca Populare di Vicenca and Veneto Banca. It pays 1€ for both banks. And that‘s not all. The Italy Government will pay 5.2bio€ Intesa process the merging with the two banks, which have many bad loans they can‘t write off without bankruptcy, so the ECB. 3900 of the 10100 employees will loose their jobs. The 5.2bio€ contain 1.2bio€ to keep jobs Intesa would also cut. 1600 of the 960 affiliates will be closed. Further the Italy government will pay Intesa 12bio€ to write down the bad loans of the two banks into a bad bank. The loss will be devided into parts for the state, the shareholders and

Intesa was dealing hard with the government of Italy, who has no choice than to underwrite that deal. A bankruptcy would lead to social disorder with many protests the government fear. And the two banks would have needed 6.4bio€ imediately to stay alive. And there were no more investors for one of the two banks. Intesa merges with the profitable part of the banks. Bad loans will be written off to bad banks.

The parlament of the EU permits the government of Italy the excemption to process the resolution of Banca Populare di Vicenca and Veneto Banca with the law of Italy. This is possible because none of the banks was relevant to the economical system of Italy. Now the Italy parlament has 60 days to ratify that agreement.

But with this procedure the tax payer will pay 17bio€ for a bailout of two banks. And this the EU wants to avoid and created the SRB. The SRB was created only for system relevant banks. Other banks should file bankrupty, so the EU parlametarians thought. Italy is the fourth biggest economy in the EU. Many banks in Italy have bad loans, so the financial system is very instable now. Italy could trigger the next financial crisis in Europe and EU. So Germany thinks about to extend the SRB to the smaller Banks. This would prevent that states spare shareholders to pay for the losses.

Now the equity holders and the holders of subordinated bonds are supposed to take the first losses. But many of the subordinated or junior bonds are sold to households and individuals. This will be pollitically very difficult for the government. But to inject state funds to soften the impact on private persons will cost hunge amounts and will be against EU rules on states aid.

The Banca Popolare di Vicenza Group was ranked eleven among the Italian banks based on total assets, Veneto Banca is a local bank. The merging of the two banks without risks brings Intensa Sanpaolo a little closer to the leading Uni Credit Group.

Boom in der deutschen Wirtschaft

Die deutsche Wirtschaft boomt seit Jahren. Der Bruttoverdienst stieg von 1832€ in 1991 auf 2617€ in 2001 auf 3311€ in 2011 und auf 3612€ in 2015.

https://www.destatis.de/DE/ZahlenFakten/GesamtwirtschaftUmwelt/VerdiensteArbeitskosten/VerdiensteVerdienstunterschiede/Tabellen/LangeReiheD.html. 
Allein im März 2017 hat die BRD für 118mfrd€ exportiert. Grund sind die Auswirkungen der von Gerhard Schröder eingeführten Agenda 2010. Die Auswirkungen der Agenda 2010 laufen allerdings langsam aus. Wenn die Wirtschaft nicht bald investiert, wird sich das negativ auswirken. Der Investitionsbedarf ist in den nächsten Jahren hoch. Fordern doch die Chinesen von den Autobauern der Welt einen Mindestquote der Produktion von Elektroautos. Dies macht eine Umstrukturierung der Produktion und damit Investitionen in Produktionsmittel zwingend erforderlich. Auch muss in die Verkehrswege investiert werden. 
Momentan findet eine Kapitalumschichtung von den USA in den Euroraum statt. Grund hierfür sind die guten Konjunkturdaten der europäischen Wirtschaft. Dies belegen auch die Tabellen unten.

Der S+P stagniert seit April 2017. Die USA wachsen im ersten Quartal 2017 nur um 0,7%. Dies belegt auch die Entwicklung des DAX. Läuft die US Wirtschaft nicht an kann der Dow Jones, der in erwartung einer anspringenden US Wirtschaft stark abfallen.

File:GDP at current market prices, 2003–04 and 2012–14 YB15-de.png

Quelle: http://ec.europa.eu/eurostat/statistics-explained/index.php/File:GDP_at_current_market_prices,_2003%E2%80%9304_and_2012%E2%80%9314_YB15-de.png

Die Tabelle oben zeigt die Entwicklung des BIP in € der EU Staaten für den Zeitraum 2003 bis 2013. Kleine Staaten wie Bulgarien, Estland, Litauen haben ihr BIP annähernd verdoppelt.

 

Bruttoinlandsprodukt der BRD

Vierteljahre Ursprungswerte Werte nach Census X-12-ARIMA
preisberenigt, verkettet
in jeweiligen Preisen preisbereinigt, verkettet saison- und
kalender­bereinigt
kalender­bereinigt
Mrd. Euro %1 2010 = 100 %1 2010 = 100 %2 %1
1 Veränderung gegenüber dem Vorjahresquartal in %.

2 Veränderung gegenüber dem Vorquartal in %.

Stand: 12. Mai 2017

2017 1. Vj 791,260 3,7 111,60 2,9 111,25 0,6 1,7
2016 4. Vj 796,060 2,6 109,96 1,3 110,58 0,4 1,8
3. Vj 794,070 2,9 112,08 1,6 110,12 0,2 1,7
2. Vj 780,760 4,7 110,28 3,2 109,94 0,5 1,8
1. Vj 763,180 3,2 108,50 1,5 109,43 0,7 1,9
2015 4. Vj 775,760 4,2 108,59 2,1 108,65 0,4 1,3
3. Vj 771,660 3,7 110,35 1,8 108,26 0,2 1,7
2. Vj 745,990 3,8 106,89 1,8 108,00 0,5 1,8
1. Vj 739,410 3,2 106,89 1,3 107,44 0,2 1,2
2014 4. Vj 744,640 3,5 106,38 1,7 107,26 0,8 1,6
3. Vj 744,380 2,9 108,43 1,2 106,42 0,3 1,1
2. Vj 718,530 2,9 105,02 0,9 106,12 -0,1 1,3
1. Vj 716,380 4,5 105,55 2,6 106,23 0,6 2,4
2013 4. Vj 719,290 3,3 104,60 1,4 105,60 0,4 1,5
3. Vj 723,160 3,1 107,19 1,2 105,21 0,4 0,7
2. Vj 698,330 3,0 104,04 0,9 104,74 0,9 0,5
1. Vj 685,460 0,4 102,87 -1,5 103,79 -0,2 -0,3
2012 4. Vj 696,080 1,6 103,19 -0,1 103,97 -0,5 0,1
3. Vj 701,300 1,8 105,96 0,2 104,47 0,2 0,7
2. Vj 678,150 1,8 103,14 0,4 104,26 0,1 0,9
1. Vj 682,730 3,0 104,40 1,6 104,17 0,4 1,1
2011 4. Vj 685,180 3,0 103,33 1,8 103,77 -0,0 2,3
3. Vj 689,120 4,3 105,76 3,2 103,79 0,5 3,3
2. Vj 665,880

Deutsche Wirtschaft boomt seit Jahren. Der durchschnittliche Bruttomonatsverdienst stieg von 
5,0 102,75 3,7 103,32 0,2 3,6
1. Vj 662,940 6,9 102,78 6,0 103,15 1,8 5,7
2010 4. Vj 665,120 5,1 101,50 4,4 101,30 0,8 4,4
3. Vj 660,590 5,2 102,49 4,6 100,48 0,8 4,6
2. Vj 634,280 5,4 99,07 4,7 99,70 2,1 4,3

https://www.destatis.de/DE/ZahlenFakten/GesamtwirtschaftUmwelt/VGR/Inlandsprodukt/Tabellen/VJ_BIP.html;jsessionid=AC2A74162C31E2E34C3EB754CCAA49AC.cae4

Die Tabelle oben zeigt die Entwicklung des BIP der BRD seit 2010. Seit Ende 2013 befinden wir uns in einer Boomphase.

DAX 30 Chart

Der DAX befindet sich sei

Auch die Schulden vieler EU-Staaten haben abgenommen. Dennoch haben viele EU-Staaten die in Maastricht vereinbarte Höchstverschuldung von 60% noch nicht unterschritten.

Schuldenstandquoten der EU-Mitgliedstaaten Bruttoschulden (konsolidiert) in % des Bruttoinlandsproduktes1

Ländergruppe/Land 2013 2014 2015 2016
1 Rechenstand: Notifikation vor dem 1. April 2017.
Quelle: Eurostat, April 2017.
Belgien 105,6 106,7 106,0 105,9
Deutschland 77,5 74,9 71,2 68,3
Griechenland 177,4 179,7 177,4 179,0
Spanien 95,5 100,4 99,8 99,4
Frankreich 92,3 94,9 95,6 96,0
Irland 119,5 105,3 78,7 75,4
Italien 129,0 131,8 132,1 132,6
Zypern 102,2 107,1 107,5 107,8
Luxemburg 23,4 22,4 21,6 20,0
Malta 68,7 64,3 60,6 58,3
Niederlande 67,7 67,9 65,2 62,3
Österreich 81,3 84,4 85,5 84,6
Portugal 129,0 130,6 129,0 130,4
Slowenien 71,0 80,9 83,1 79,7
Slowakei 54,7 53,6 52,5 51,9
Finnland 56,5 60,2 63,7 63,6
Estland 10,2 10,7 10,1 9,5
Lettland 39,0 40,9 36,5 40,1
Litauen 38,7 40,5 42,7 40,2
Eurozone
zusammen 91,4 92,0 90,3 89,2
Tschechische Republik 44,9 42,2 40,3 37,2
Dänemark 44,0 44,0 39,6 37,8
Ungarn 76,6 75,7 74,7 74,1
Polen 55,7 50,2 51,1 54,4
Schweden 40,4 45,2 43,9 41,6
Großbritannien 86,2 88,1 89,0 89,3
Bulgarien 17,0 27,0 26,0 29,5
Rumänien 37,8 39,4 38,0 37,6
Kroatien 82,2 86,6 86,7 84,2
EU-Mitgliedstaaten
zusammen 85,7 86,7 84,9 83,5

Nebenbei:

1 Bitcoin kostet 2000$ und steigt am 23.05.17 bis 2200$/1 Bitcoin. Es kann sich eine Blase bilden.

Der Kurs der Deutschen Bank schwankt seit November 2016 zwischen 16,00 und 17,50€. Das Verhältnis von Kurs/Buchwert beträgt 0,5, das heißt der Marktwert an der Börse ist nur halb so hoch wie das Eigenkapital der Deutschen Bank. Um den Wert der Deutschen Bank an der Börse wiederzugeben müßte das Verhältnis des Aktienkurses zum Buchewrt bei 1 liegen. Die Deutsche Bank kann also mittelfristig steigen.

Haben sie sich schon einmal Gedanken gemacht über Lohnoptimierung bzw. wie Sie durch Senkung der Lohnnebenkosten Ihre Gewinne maximieren können?

Der Beitrag Gewinnmaximierung durch DeinTaler zeigt Ihnen wie. Schlagen Arbeitnehmer Ihren Arbeitgeber dies vor, können Sie eine Prämie von bis zu 500,00€ erhalten

Institutional Investors conference, „Value Intelligence“, discussed strategies for the future

The biggest conference in Germany for institutional investors, „Value Intelligence“, happened in Munich this week. In this conference the institutional investors inform themselves about the possibilities to make revenue in the future and form their new strategies of their investments. Part of the attendees of the value intelligence are assecurances, banks, foundations, pensionfonds, family offices and parts of the press. Referents on this event were beside others Prof. Bruce Greenwald, Columbia Business School, New York and James Montier, GMO, London. Prof. Bruce Greenwald who former predicted that the Eurozone fall into pieces said, the Euro-Zone will exists in the future. But it would be an advantage for the poorer south states to divide from the richer north. Mr Montier doesn’t see any problem that the state adopt the debts of the crisis because the state can print money. So the state has not the same constraints like companies. The state could form it’s monetary policy more freely than the private economy. And therefore the national debt will be no problem for the economy. Systemic risk only exists in the private sector. And Prof. Greenwald confirms that the debit for the creditors have been steadily decreased for the last years. For the states the decline of the debit was much more. So Japan, where the net debt is about 150% of the GDP has with a nominal rate of 0,5%, respectively 1% rate load effective, a real rate load of 1,5% of GDP. For Montier is the state debt of Japan no problem, as long the interest rate stay lowly. The national debt is more the result of the crisis than the crisis is the result of the national debt. The quantitative easing is an instrument to control the rates. It is not inevitable that quantitave easing produce inflation. In the sight of the institutional investors the central banks don’t print money. Quantitave Easing is a big programm to change long term national debt to short term reserves at the central banks and this is no process that generates inflation. The biggest problem is that there are countries which protect their industry sector. If they conserve their structure too aggressively they could face deflation and slowing growth. They are endeavoring to export their own problems and produce more financial inequalitiy.

But the central banks can steer the rates to any level they want. If investors sell their treasuries the central bank buy them. The rate does not matter about that. They only have to obey the currency.

That is a nice new doctrine. It may be right from the vantage point of the present of the instituional investors. But what about Greece, Ukraine, Italy or the USA. What about the bankrupt Cities like Detroit and states like California, the different cities and administrative districts in Amerika and Europe which are under rescue shield?

New brew made in America: Heroin Beer

In colaboration of US and Canadian Universities scientists developed the possibility to produce heroin out of sugar and a special sort of gen manipulated yeast. The yeast have a sensor to find the Benzylisoquinoline alkaloids (BIAs) which are a diverse family of plant-specialized metabolites that include the pharmaceuticals codeine and morphine and their derivatives.  The process was invited on 18 May2015 by Nature Chemical Biology. But the process of production of that drink, called bad beer, is still too fragile, to produce large saleable amounts. But it will be competitve to the poppies and the opium made in Afghanistan and the production will be independent of the location in future. It will be interesting what pharmaceutical company will buy the license to start the production of this special yeast. Until now the most Heroin of the world is used in Europe. With this brew called „bad beer“ the next heroin wave could also happen in the USA. And the drug cartells could produce the heroin even though the Afghan farmers will earn their money with growing corn and legumes. For the USA this process have political character, because they can deprive the warlords from power in the opium producing countries. Also this brew could improve the methadon projects in Europe and the medical treatment. This project is a prototype until now. In readiness for the market there will be a billion-dollar-market waiting for it.

http://www.nature.com/nchembio/journal/vaop/ncurrent/full/nchembio.1816.html<

http://www.nature.com/nchembio/journal/vaop/ncurrent/extref/nchembio.1816-S1.pdf

US tax evading prosecution: How USA classify and punish the swiss banks

The US government has charged European banks that they helped US citizens to traffic their money out of USA without paying the taxes and that way to brake the law of the USA. To divide the good from the ugly banks the USA has classified the banks into 4 categories.

Category 1 banks are charged and preliminary investigation is started.

As category 1 bank were classified

Credit Suisse ( investigation closed and 2,8mrd$ penalty paid ); Julius Bär; Basler KB; Zürcher KB; HSBC Private Bank; Pictet; Rahn und Bodmer; LLB Schweiz; Bank Hapoalim; Bank Mizahi; Bank Leumi (investigation closed, 500mio$ penalty paid); Bank Frey (penalty leads to liquidation); Neue Züricher Bank (penalty leads to liquidation); Bank Wiegelin (penalty leads to liquidation);

Category 2 banks are banks which have broken US law, but no inquiry is started

As category 2 banks are classified

Aargauer KB, BC du Jura; BC Vaudoise; Berner KB, Graubünder KB, Luzerner KB, Neuenburger KB, Nidwaldner KB, Schaffhauser KB, St Galler KB, Tessiner KB, Walliser KB, Zuger KB, Hypo lenzburg, Lombard Odier; Bank Coop; Bank Linth LLB; Banque Privee; Edmond de Rothschild; Comer Bank; EPG international; Migros Bank; PostFinance; Piguet Ballard; UBP Vallant; Deutsche Bank (Schweiz); Rothschild Bank; Coutts; BSI (case is closed with a penalty of 211 mio $ paid); Category 3 Banks are banks didn’t broke any US tax law;

Category 3 banks are banks without any charge:

As category 3 banks are classified:

Baloise Bank SoBa; Cedmbra Money Bank; Vontobel; Thurgauer KB; Freiburger KB; Raiffeisen;

Category 4 banks are local banks in Department of Justice Definition:

Appenzeller KB; AEK Bank 1826; DC Bank; Regiobank Solothum;

The following banks waive the NPA:

Acrevis Bank; Bank am Bellevued; Banque Cramer ( incl Valartis Schweiz ); Basellandschaftl KB; BC de Geneve; Benedict Hentsch & Cie; BZ Bank; Clientis; Glarner KB; Globlance; LGT Schweiz; Mirabaud; Notenstein; Obwaldner KB; Schwyzer KB; Urner KB; VP Bank (Schweiz); VZ Hoöding Barclays (Schweiz).

The banks in category 1 are prosecuted and if are guilty classified as criminal by the USA.

The banks in category 2 have to recognize, that they broke US law and sign a NPA (non persecution agreement). The NPA oblige the banks to cooperate with the US – authortiy for at least 4 years to find tax evaders and the institutions which help them to traffic their money out of the USA without paying their taxes. The banks have to sign the NPA with the Department of Justice of the USA. The advantage for the bank is that it is not classified as criminal by the USA and that they can negotiate the punishment.

The banks in category 3 and 4 are banks clean without any charges and investigations.

In face of the bankrupties of classified 1 banks it is necessary to watch the development of the prosecutions to secure the money, if banks get into troubled water.

How can an investor estimate the penalty a bank will have to pay?

The bank accounts were divided in 3 categories. Accounts which were opened bevor 2008 were punished with 20% of the capital on the account. Accounts which were opened between 2008 and February 2009 were punished wiht 30% of the capital on the account. And the accounts, which were opened after the case of UBS were punished wiht 50% of the capital of the account. Did tax evaders complain theirself the amount for that account will be subtracted from the punishment. The US authorities could only demand that the banks give them the names of their costumers if the costumers agree to that proceedure.

 

Dollar increasing. Indizes stagnant. How is developing gold?

China and India gold purchases are stabilising the gold and silver price, even though the US dollar strenghtened. Gold usually is traded in US $. So, normally, if the US $ strengthened the gold and silver prices decrease. The last years the primary gold production yearly is stable by 3000 t. China and India together purchase 2000 t of that primary gold production. The rest, 1000 t, including the recycled gold is splitted by the rest of the world. If India and China stop that gold price could sharply decrease.

The gold stocks of the EU-States and on commodity exchanges are falling. Also the ETF’s are selling gold. This shows the activity of the swiss gold refineries. ETF’s have 12,5kg gold bars. China and India are buying 1kg bars, China with 9999 and India with 9995 quality of purity. Since 2013 the swiss gold refineries producing 1 kg bars of the 12,5 kg bars, which are normally used by the ETF’s. The swiss export statistics show that these 1 kg gold bars are exported with increasing value to China and slowly decrescent to Hongkong. Chinese officials said in the past, that China wants to secure its currency with real values like gold. China also accumulates the gold which it produces itself. China is the biggest primary gold producer. Chinas reserve is probably much bigger than the 1000t it has pronounced years ago.

If the FED will start to increase the rate the gold and silver price will increase quickly. The FED announced several times that it will increase the rates, if the job market is good and the economy start to grow sustainable.

The Indians and the Chinese, the world’s largest buyers of gold, have seen the value of their gold investments increase by approximately 200% over the last decade measured the worth in their domestic currencies.. Due to a collapse in their national currencies, South East Asians and Koreans have also seen the value of owning gold.

So the reserves of gold and silver which China and India buy now will be increasing it’s worth or will help to keep the yuan stable if the currency slumps.

And the finance system in China challenges the government. The local governments, the real estate sector and the industrie are highly indebted while the economy slows and the real estate sector slumps. The Chinese governments think about quantitative easing to give the banking system and the local governments enough liquidity to pay their debts and to have liquidity for operating and innovative businesses. China also plans to liberate its financing system to make it more flexible.

And China is not the only country, which is highly indebted. South Korea, Thailand, Malaysia and Hungary are also countries where the debts are critical high.

Investors have to watch USA before they invest

USA is waiting for recovery, but labormarket is slowing and the upswing of industry put on hold for the last 2 years. The quantitative easing was postponed for several quarters. Now the FED thinks about increasing the rate.

But since 2009 the stock exchange increases most if the monetary policy is liberal. China, Japan and Germany liberate their monetary policy, while USA regulate it. Also the US assetts price-earnings-ratio is very high valued. The assetts P/E was only higher 1929 and at the end of the 90’s.

The indizes are jumping from record high to record high so the sentiment of the brokers and investors is good. But there are signs which shows that the upturn turns to an end.

The US transportation services index slows since November 2014. Since March also the oilprices (WTI) increase from 45 $ to 57 $, so the possibility exists that the slump of the transportation services index find its causality in the increasing oilprices. Then the transportation services index will rise to the level of the industry production again. If this not happened, manufactures will possibly produce without orders to fill their warehouses. And that will lead to falling prices and recession. Another sign of the possibility of a downturn is the record high of 273 IPO’s in the USA, also the IPO indices are on a record high. The best sentiment for IPO’S is at the end of a boom. Then many investors have the sentiment for risky investments, and they will finance their investments with credits if they want to invest in assetts. In February 2015 the margin debt was at 465 bio $, also a record high. The lsst peaks were in March 2000 and July 2007. At boom level the carry trades are no problem, but if the rally stops and the sentiment turn bad, broker need more money from the investors. If they have no more money they have to close positions. And then the courses begin to fall. And the Dow Jones stagnates since begin of March 2015. So there is also the possibility of a fall. Investors have to watch what is going on in USA before they invest. The forecast of an upturn could be euphemistic.

 

The results of the banking test of ECB

The ECB published the results of banking stress test. Most of the institutes passed the test with success.

Key results of comprehensive assessment of 130 largest euro area banks:

  • Capital shortfall of €25 billion detected at 25 participant banks
  • Banks’ asset values need to be adjusted by €48 billion, €37 billion of which did not generate capital shortfall
  • Shortfall of €25 billion and asset value adjustment of €37 billion implies overall impact of €62 billion on banks
  • Additional €136 billion found in non-performing exposures
  • Adverse stress scenario would deplete banks’ capital by €263 billion, reducing median CET1 ratio by 4 percentage points from 12.4% to 8.3%
  • Exercise delivers high level of transparency, consistency and equal treatment
  • Rigorous exercise is milestone for the Single Supervisory Mechanism starting in November
  • The AQR showed

    • that as of end-2013 the carrying values—or book values—of banks’ assets need to be adjusted by €48 billion.

    • that banks’ non-performing exposures increased by €136 billion to a total of €879 billion.

    • that a severe scenario would deplete the banks’ top-quality, loss-absorbing Common Equity Tier 1 (CET 1) capital—the measure of a bank’s financial strength—by about €263 billion. This would result in the banks’ median CET1 ratio decreasing by 4 percentage points from 12.4% to 8.3%. This reduction is higher than in previous similar exercises and is a measure of the rigorous nature of the exercise.

    You love to see the result of the banking test of your bank?

    See

    http://www.ecb.europa.eu/pub/pdf/other/aggregatereportonthecomprehensiveassessment201410.en.pdf

    at page 140 following pages

    or

    http://www.ecb.europa.eu/ssm/assessment/html/index.en.htm

    Argentina is under US pressure to control patagonian region

    A day after the Senate approved the proposed debt exchange as a way to circumvent U.S. court rulings Argentina government diskusses swapping global Argentine bonds for paper governed by local law. After a New York court had ruled that Argentina is prohibited from paying holders of its restructured bonds without also paying the hedge funds $1.3 billion plus interest.

    In 2002 bondholders got less than 30 cents on the dollar as Argentina defaulted on about 100 bio $ in bonds, because a small group of hedge funds went to court for full repayment.

    Argentina steadfastly refuses to pay the holdouts in full, saying that to do so would open the country to a raft of new lawsuits. Argentina fights against recession and inflation. With the swap Argentina tries to to circumvent the U. S. Court rufling and hold liquidity. „There is obviously willingness among many creditors, or bondholders, to participate in the sovereign debt payment law, in order to get the money that is owed to them,“ cabinet chief Jorge Capitanich told reporters. The debt swap bill, passed by the Senate on Thursday. It will allow holders of 29 bio $ in bonds under foreign law the choice to swap them for papers governed by Argentine or French law.

    In need of financing to develop its vast Patagonian shale oil and gas fields, Argentina will be unable to issue fresh international debt until the lawsuits are settled.

    With Patagonia shale oil and gas field Argentina is sitting atop of a shale bounty that could transform the outlook for the Western Hemisphere’s supply and secure the South American country’s energy self-sufficiency for decades. And it is in an area where you’ve already got oil industry activity. There are service companies, pipelines and infrastructure, and you have also knowledge of the rocks.

    Asked what was the key reason behind the decision of US based Corporation Chevron to increase its investment in Vaca Muerta, Robertson answered: “We like the rock. That’s first and foremost. Drilling costs are coming down and the well results so far were sufficient to warrant additional investment.”

    BP, CNOOC, Chevron and Sinopec will start 2017 to drill more than 1500 wells to produce 50,000 barrel/day of crude oil and 3 billion cubicfeet/day of natural, so YPF.

    The  Chevron Corporation is operating in Argentina for many years where it produces currently 21,000 barrels of crude oil and 4 million cubic feet of natural gas per day and has signed Heads of Agreement to spent $1.24 billion capital expenditure to explore and develop the shale oil and gas in the Vaca Muerta Basin within the Neuquen Province in Argentina.

    This agreement comes at a critical period for Argentina as it should start to import natural gas and refined products although it is recognized to hold ones of the largest reserves in the world for shale oil and gas.

    Chevron estimates that 2014 capital and exploratory expenditures will be $39.8 billion, including $4.8 billion of spending by affiliates.

    At the same time NML Capital served subpoenas this week to Bank of China (BOC) and Industrial and Commercial Bank of China (ICBC) in an effort to obtain information on $6.8 billion in financing for deals signed by the two countries in July.

    „We want to understand the mechanics of these credit facilities to establish whether assets to which Argentina has a legal title could surface in jurisdictions where we would be able to attach them,“ a lawyer advising Elliott told.

    The subpoenas are aimed at a facility provided by China Development Bank, ICBC and BOC to finance the onstruction of two hydroelectric dams in Argentina’s southern Patagonia region and a loan from China Development Bank and ICBC to finance the Belgrano Cargas railway project.

    Both deals were signed by Argentine President Cristina Fernandez and her Chinese counterpart, Xi Jinping, during an official visit of a Chinese delegation to Buenos Aires.