PPCC: Pisitófilos Creditófagos. Otoño 2023

[Cadavre Exquis]

https://elpais.com/economia/2023-11-06/espana-pedira-a-bruselas-la-prorroga-de-la-excepcion-iberica-mas-alla-del-31-de-diciembre.html

Saludos.

[Cadavre Exquis]

https://cincodias.elpais.com/cincodias/2023/11/03/pyme/1699010477_605376.html

Saludos.

[Cadavre Exquis]

https://cincodias.elpais.com/fondos-y-planes/2023-11-06/un-ciclo-macro-indescifrable-y-un-aspecto-tecnico-negativo.html

Saludos.

[Cadavre Exquis]

https://cincodias.elpais.com/economia/2023-11-06/los-inspectores-y-tecnicos-de-hacienda-descartan-que-el-minimo-del-15-a-las-multinacionales-recaude-10000-millones.html

Saludos.

[Cadavre Exquis]

https://cincodias.elpais.com/economia/2023-11-06/espana-es-el-pais-de-la-ue-donde-mas-se-ha-encarecido-el-aceite-de-oliva-desde-2021.html

https://cincodias.elpais.com/economia/2023-11-05/la-rebaja-del-iva-de-alimentos-resta-1294-millones-de-recaudacion-a-hacienda-en-nueve-meses.html

Saludos.

[Derby]

Podemos no estar de acuerdo con algunos puntos del argumento de Ann Pettifor o con las conclusiones a las que llega, pero siempre es agradable leer sus artículos porque enlaza los temas de manera lógica y asequible 

https://annpettifor.substack.com/p/on-the-bursting-of-bubbles

On the bursting of bubbles

And the deflating of debt

The wars in Europe and the Middle East have stunned and silenced me these last few weeks. It is hard, and almost unethical I feel, to think, or write about anything else.

While the world’s attention and empathy is on the deaths of thousands of innocent civilians - there has been disturbing, if sometimes conflicting news in the financial markets.

First, the US stock market is booming, employment is high and wages there are finally catching up with inflation*.

That is the good news.

The bad news, as I warned in my last post - is that the era of booming debt inflation is now turning into a spiral of rapid debt deflation. Debts are being paid down, written off, or defaulted on - and borrowing, including mortgage borrowing, is in decline. We are heading for a period of disinflation - dangerous for millions of heavily indebted borrowers.

For the fourteen years - yes, 14 years - that preceded the rate hikes of 2022 - central bankers kept interest rates below 1%. The purpose, as noted before, was mainly to provide ‘easy money’ to help Wall St. and the City of London recover from losses made in the Great Financial Crisis.

For much of that period, interest rates were negative relative to inflation. In a world of credit deregulation, negative rates were a massive incentive to borrow. Those needing cash were effectively paid to borrow - and money was available on a ‘no questions asked’ basis.

Central Bankers deployed Quantitative Easing policies that spewed out enormous quantities of credit for their clients - governments, commercial banks, ‘shadow banks’, pension funds, hedge funds and insurance companies.

That ‘Easy money’ fuelled a debt inflation - an enormous bubble of debt - that in turn fuelled the rise of asset prices. The system is now shifting into reverse.

Much of that credit/debt was used to make capital gains from speculation in financial, property and commodity markets. Worldwide, far smaller amounts went into investment in productive, employment-creating, income-generating activity - including investment in securing a more sustainable future for humanity. (Under President Biden, the US has proved the exception). That is largely because ours is a rentier global economy - where investors earn more from rents on assets they own than from productive investment in the creation of new assets. Rentierism is what Guy Standing calls the corruption of so-called ‘free market’ capitalism.**

At the same time the big banks of Wall St. and the City of London, and the $239 trillion ‘shadow banking’ sector were together deemed ‘too-big-to-fail’ after the GFC. They are all effectively protected from losses by the world’s publicly-backed central bankers. That’s not the ‘free market’ either.

‘Shadow Banking’ is a highly leveraged sector that since 1998 has been responsible, according to the Financial Stability Board***, for a

a series of financial incidents, stretching back to the 1998 collapse of Long-Term Capital Management, the 2008 global financial crisis, the March 2020 market turmoil, the 2021 Archegos failure, and the September 2022 dislocation in the UK gilt market.

The ‘shadow banking’ sector bailout of March 2020 was massive. And still little has been done to tame and regulate the sector.

Gambling on US Treasuries

On the 26th September, the FT published an article on the latest speculative concern: The debt-fuelled bet on US Treasuries that’s scaring regulators. The article set out to explain convoluted and complex ‘trades’ or bets on the direction of US Treasury bill prices - bets financed by ‘leverage’ or borrowing undertaken by many hedge funds. They’re the kind of complex financial engineering gimmicks that were popular - and profitable - before the GFC. This speculation matters because if the Treasury market goes haywire because bets go wrong - the whole financial system becomes vulnerable. US Treasury’s bonds provide the fundamental ‘plumbing’ (or collateral) of the private financial system - i.e. Wall St.

Having said that, the Street’s speculative trading is effectively “backstopped” - or guaranteed against losses - by the Federal Reserve of the United States, the Bank of England and the ECB. Morgan Ricks, a professor at Vanderbilt Law School raises the question of ‘moral hazard’ and worries that such ‘backstopping’ fuels speculation.

“…. I don’t think it’s unreasonable to think that the Fed’s implicit backstop of this trade is encouraging more of the trade to happen.”

Technocrats at central banks seem unperturbed by a) mountains of private debt and b) the scale of financial market speculation financed by debt. So unconcerned they aimed the dagger of high, real rates at the global bubble of debt. In doing so, they faithfully followed the Paul Volcker playbook of tackling inflation by hiking rates. According to the Federal Reserve’s History website: both the 1980 and 1981-82 recessions were triggered by Volcker’s tight monetary policy.

Is history about to repeat itself?

I think so. The debt bubble is bursting- and recession is looming, both in the US and in Europe. The ‘easy money’ chickens are coming home to roost.

In the US, mortgage applications are now down 50% and at the lowest levels since 1994, according to KobeissiLetter.



Also in the US, credit card defaults rates are higher than in 2008.



The picture looks painfully familiar.

What does it mean for future interest rate movements? My guess is that central bankers will start easing soon.(...)

*https://www.bankrate.com/banking/federal-reserve/wage-to-inflation-index/
**https://www.bitebackpublishing.com/books/the-corruption-of-capitalism
***https://www.fsb.org/2023/09/the-financial-stability-implications-of-leverage-in-non-bank-financial-intermediation/

[Derby]

https://cincodias.elpais.com/companias/2023-11-06/blackstone-refinancia-testa-el-gigante-espanol-de-casas-alquiler-con-1500-millones.html

Saludos.

Gracias Cadavre, no tiene desperdicio...el alquiler de toda la vida no es negocio!

(...) Blackstone endeudó fuertemente la compañía tras adquirirla entre 2018 y 2019. De hecho, su apalancamiento respecto al valor de sus activos (tasados por Savills en 2.875 millones en 2022) se sitúa en alrededor del 60%, un nivel muy elevado en los estándares actuales por la subida del precio del dinero. Este apalancamiento ha llevado a la empresa a pagar 61,36 millones de factura en gastos financieros el pasado año.

Este endeudamiento ha provocado que sus márgenes sean bajos (unidos a un negocio en residencial en alquiler que ya de por sí tiene una rentabilidad muy ajustada). Normalmente, en este tipo de empresas, el beneficio extra llega por la capacidad de subida de rentas a inquilinos y por la plusvalía que consigan en el traspaso total o parcial de la cartera.

De hecho, en el último ejercicio completo, el de 2022, se apuntó 87 millones de beneficios (más del doble que el año anterior) gracias a las plusvalías de casi 12 millones generadas por ventas de viviendas y a la variación positiva de 78,6 millones de sus inversiones inmobiliarias.

Cómo es Testa

Blackstone ha apostado por esta compañía desde 2018 porque considera que en España la oferta de vivienda en alquiler siga siendo baja en un entorno de alta demanda, un negocio muy atractivo en un contexto de escasa construcción de residencial nuevo para el arrendamiento.

La gestora estadounidense compró esta sociedad cotizada de inversión en el mercado inmobiliario (socimi) a Merlin, Santander, BBVA y Acciona, ya que estas cuatro compañías habían unido sus portfolios de casas en arrendamiento en Testa. Blackstone también es dueña de otra gran socimi del residencial, Fidere. Ambas compañías han invertido cerca de 240 millones en capex para reformar sus edificios. De esos, 36 millones corresponde a Testa del pasado año.

Testa es la principal socimi residencial. Dispone de 10.360 viviendas (un 3,9% menos que hace un año), aparcamientos y 285 locales comerciales que le generaron el pasado año 92,95 millones (un 20,8% más) en rentas de sus inquilinos.

En superficie bruta alquilable, suma casi un millón de metros cuadrados, y ha apostado por Madrid, el principal mercado de residencial en alquiler. De esa región proviene el 60,5% de sus ingresos en por rentas; otro 5,3% de Baleares; 5,2% de Cataluña; 4,6% del País Vasco, y 4,4% de la Comunidad Valenciana.

En 2019, su cartera era mayor, de 11.096 viviendas, pero la inmobiliaria continúa con su estrategia de vender la parte no estratégica (por ejemplo, viviendas ubicadas en edificios no controlados al 100%). En esa partida, se embolsó 216 millones en 2022.(...)

[Derby]

https://www.euronews.com/business/2023/10/20/ireland-nestle-shuts-down-baby-formula-factory-over-falling-chinese-birth-rate

Ireland: Nestlé shuts down baby formula factory over falling Chinese birth rate

As the number of births in China has halved since 2018, Nestlé says it will close its Ireland-based factory that produces formula exclusively for Asian exports.

The 542 workers of Nestlé’s Askeaton factory and Research and Development (R&D) facility will face redundancy as early as the beginning of 2025.

Operating as Wyeth Nutritionals Ireland Ltd, the factory was acquired by Nestlé in 2012.

In a statement released on Wednesday, the Swiss multinational corporation said the Irish R&D operations would be absorbed by one of their other R&D centres based in Konolfingen, Switzerland.

The Askeaton factory production will be split between the same Swiss location and Nestlé’s factory in Suzhou, Mainland China.

In its statement announcing hundreds of job cuts, the multinational insisted the move was “no reflection on the excellent contribution made by our employees in Askeaton over many years”.(...)

[Cadavre Exquis]

https://cincodias.elpais.com/economia/2023-11-06/la-tregua-de-la-energia-el-delicado-balon-de-oxigeno-de-los-precios-y-salarios.html

Saludos.

[Cadavre Exquis]

https://cincodias.elpais.com/opinion/2023-11-06/el-impacto-economico-indiscriminado-de-la-guerra-de-israel-contra-hamas.html

Saludos.

[Cadavre Exquis]

https://cincodias.elpais.com/opinion/2023-11-06/las-paradojas-de-la-reduccion-de-jornada.html

Saludos.

[Cadavre Exquis]

https://cincodias.elpais.com/opinion/2023-11-06/consecuencias-no-deseadas-y-plazos-utopicos-amenazan-la-agricultura-verde-de-la-ue.html

Saludos.

[Cadavre Exquis]

https://cincodias.elpais.com/opinion/2023-11-06/los-paises-ricos-caen-en-una-trampa-de-deuda.html

Saludos.

[Derby]

https://www.businessinsider.com/russia-putting-economy-at-risk-fuel-ukraine-war-uk-intel-2023-11

Russia is putting its entire economy at risk to fuel its war 'above all else,' UK intel says

*Russia is putting its economy at risk to fuel its grinding war with Ukraine, UK intelligence said.
*The Russian economy "is likely at risk of overheating," said UK's Ministry of Defense.
*Higher inflation could "increase the costs of funding Russia's war in Ukraine," the agency said.

Russia's economy may soon be at risk of "overheating" as the government ramps up its military spending to continue to fuel the Kremlin's grinding, nearly two-year war with Ukraine "above all else," British intelligence said on Monday.

"Due to increasing demand, partially due to large increases in defense spending, along with continued pressures of a tightening labor market, the Russian economy is likely at risk of overheating," the UK's Ministry of Defense said in its latest daily intelligence update.

The UK intelligence group said that inflation in Russia climbed to 6% in September — up from 5.3% the previous month — and that the increase was driven by rises in costs of food and fuel.

"Higher inflation is almost certain to increase the costs of funding Russia's war in Ukraine," British intelligence said.

Inflation in Russia is "highly likely" to exceed the 4% target rate in 2024 amid soaring interest rates, according to the UK's Ministry of Defense.

"Continued high inflation is likely to erode real terms government spending, particularly in areas such as social care with below-inflation spending rises. This further illustrates the reorientation of Russia's economy to fuel the war above all else," British intelligence said.

[Derby]

https://www.ft.com/content/69ca6773-d0ce-4420-b864-00c3202c0d1b#post-216cc1df-a2dc-46f9-af4f-3678db482b2b

UK housebuilding contracts for 11th straight month
Valentina Romei in London

UK housebuilding declined for the 11th month in a row as high borrowing costs hit demand, according to a closely watched survey.



The S&P Global / CIPS UK construction purchasing managers’ index rose marginally to 45.6 in October from 45 in September but was still well below the 50 mark, showing that most businesses reported a contraction.

October’s reading was the lowest since May 2020. Analysts polled by Reuters had expected a rise to 46 points.

The overall reading was driven by a sharp contraction in housebuilding, where the reading was 38.5, making nearly a year below 50.

Tim Moore of S&P Global said the results showed the impact of “elevated borrowing costs and a wait-and-see approach to new projects”.