Archives of “trillion” tag

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Larry Fink’s $12 Trillion Shadow

  
Analysis, Economy, Education
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Though few Americans know his name, Larry Fink may be the most powerful man in the post-bailout economy. His giant BlackRock money-management firm controls or monitors more than $12 trillion worldwide—including the balance sheets of Fannie Mae and Freddie Mac, and the toxic A.I.G. and Bear Stearns assets taken over by the U.S. government last year. How did Fink rebound from a humiliating failure to become the financial fulcrum of Washington and Wall Street? Through a series of interviews, the author probes his role in the crisis, his unique risk-assessment system, and the growing concern he inspires.

Worth Reading ,Just click here

Investors Poured $19 Billion Into Hedge Funds in August

  
Analysis, Education, Global Indices
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Hedge-fundHedge funds had nearly $20 billion pour into their coffers last month, as investors flocked back amid revived market optimism.

Hedge funds booked inflows of $19.6 billion in August, according to HedgeFund.net. Total hedge fund assets rose 2.56 percent, or $47.09 billion, to hit $1.886 trillion in August, the report said.

The influx of investments made August the third month in four that inflows outweighed outflows, HedgeFund.net said.

Go to Report from Hedge Fund.net »

Is the China bubble about to burst?

  
Analysis, Economy, Education
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China bubbleAn aggressive and arrogant China is entering 2010 with a bit of uncertainty. Although there was no let-up in its exports in 2009, its internal financial position looks uncertain. China watchers are expecting a bubble that will eventually burst.

In 2009 banks in China lent internally about US$1.4 trillion to businesses, including the real estate industry, with dubious performance records. James Chanos, a successful U.S. stock market dealer, has predicted that China’s financial collapse could be far worse than Dubai’s.

China soothsayers wish to prove Chanos wrong – and they may be right. With US$2.2 trillion in foreign reserves, it would seem China could weather any storm. But the problem is that its cash reserves are uncashable. The United States and Europe are not just waiting to repatriate the money to China. So China could be left to its own devices if it faces a financial storm where markets tumble and poor people with money tied to investments see their savings vanish.

Easy credit, too much money in the economy, excessive foreign direct investment, a completely undervalued currency and rising real estate prices have definitely created a bubble. This bubble could burst with any minor international event. That is the price China would have to pay for designing policies that serve Western consumer markets. (more…)

Ken Rogoff: "China Property Market Collapse Starting"

  
Analysis, Economy, Education
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Bloomberg TV conducted an interview with Ken Rogoff in Hong Kong (the same way you land in New York before you take off in London via the now defunct Concorde) in which the Harvard professor recently made famous for his words of caution that overlevering sovereigns always eventually leads to economic slow down, financial collapse, and ultimately bankruptcy, warned, when discussing China real estate, that “you’re starting to see that collapse in property and it’s going to hit the banking system.” With this coming days ahead of the massive Agri Bank of China IPO, it is interesting just how much influence the person who has been warning all along that the world is headed on an unsustainable path will finally have, now that the permabullish cackle of the MSM punditry has finally been discredited as futures are about to reenter triple digit reality. Oh yes, and score one for Jim Chanos, and all those who have long been warning about the inevitable Chinese bubble pop. Additionally, in discussing the suddenly prevalent topic of perpetual stimulus, and particularly envisioning Paul Krugman’s thesis that the world will end unless another couple of trillion are thrown into the fire of irresponsible deficit spending, Rogoff says “I couldn’t disagree more… Just to keep drinking bottles of aspirin because you are worried you are going to get a headache, or it is going to turn into a migraine, it’s too much prophylaxis.”

Full clip although none of this is news:

Indian Economy :Unknown Facts

  
Economy, Education
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Unknown Fact

India’s long-term local currency debt is rated at Ba2 by Moody’s, two levels below the investment grade and at par with Armenia and Turkey. Indian government debt accounts for about 80 percent of GDP. Standard & Poor’s and Fitch Ratings have a rating of BBB-, the lowest investment grade.

The government’s annual debt repayments will rise to 1.14 trillion rupees in the next fiscal year from 531 billion rupees.

The 10-year yield has risen 62 basis points in the past year, the worst performer during that period among the 10 Asian local-currency debt markets outside Japan, according to indexes compiled by HSBC Holding Plc. It fell 95 basis points in the previous 12 months.

America Is On The Verge Of An Economic Catastrophe

  
Analysis, Economy, Education
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 I don’t need to remind you of the frightening economic data Washington doesn’t want you to know — the nearly $13 trillion debt, 90% debt to GDP ratio (that does not even include the off-budget items, such as the $6 trillion owed by Fannie Mae and Freddie Mac, or the $50 trillion of unfunded liabilities for programs like Social Security and Medicare)… And I certainly don’t need to reiterate the urgency of this situation. You know how severe the ramifications will be if we fail to take immediate action

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

Spain Sells 3 Year Bonds At 3.717%, 119 bps Higher Than Prior Auction

  
Analysis, Education
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For a demonstration of the unsustainable course that European sovereign funding is on, look no further than Spain, where earlier the government auctioned off €2.468 billion in three year notes for a whopping 3.717%. The bid to cover was 2.27 compared to 2.16 in October, and it was reported that foreign buyers bid above 60% of the auction (which means the ECB funded domestic banks bought about 40%). However, the same issued priced at 2.527% at the last sale on Oct. 7, a 119 bps difference. Still it wasn’t all bad, considering the bond had traded at almost 4% in recent days. As Reuters reports: “Analysts and bond market players had predicted a leap of as much as 2 percentage points in yields, but Madrid’s situation has been helped by mounting expectations the European Central Bank will step up extraordinary measures to contain the crisis.” The problem for Spain is that it has minimized the amount of debt it is issuing during turbulent times: “The Treasury had cut the amount of bonds on offer in order to trim financing costs as it faces down market doubts on whether it can bring down its deficit due to sluggish economic growth and persistent concerns it might need to bailout its debt-laden banks.” And the problem for the ECB is that it most likely, as many analysts are predicting, will not announce anything of substance, as otherwise the ECB will have to monetize up to €1.5 trillion in total debt and interest through the end of 2011. The result for the EUR will inevitably be disastrous in either case, and if in 25 minutes JCT indeed announces nothing, look for all those who bid up the bond auction earlier to be tearing out their hair as the 3 Year promptly passes 4%.

China Decreases Holdings of U.S. Treasuries

  
Analysis, Economy, Education
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China Total holding of US Treasuries: $755.4B v $789.6B prior

Japan Total Holdings of US Treasuries: $768.8B v $757.3B prior 
Oil Exporters total Holdings of US Treasuries: $186.8B v $187.7B prior 
Brazil holdings of US Treasuries $160.6B v $157.1B prior 
Russia holdings of US Treasuries $118.5B v $128.1B prior 
Hong Kong holdings of US Treasuries $152.9B v $146.2B prior 
India holdings of US Treasuries: $29.6B v $31.6B prior

treasuriesWASHINGTON (AP) — The government said Tuesday that foreign demand for U.S. Treasury securities fell by the largest amount on record in December with China reducing its holdings by $34.2 billion.

The reductions in holdings, if they continue, could force the government to make higher interest payments at a time that it is running record federal deficits.

The Treasury Department reported that foreign holdings of U.S. Treasury securities fell by $53 billion in December, surpassing the previous record of a $44.5 billion drop in April 2009.[…] (more…)

Crash of the Titans

  
Analysis, Education
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For many, many years, Merrill Lynch had good reason to be “Bullish on America.”

With more than 15,000 brokers and $2.2 trillion in client assets Merrill Lynch was the world’s largest brokerage. It clawed its way to the top and revolutionized the stock market by bringing Wall Street to Main Street.

But in September 2008 – at the height of the financial crisis, it ceased to exist as a separate entity when it was acquired by Bank of America

The world, the company, the Street was in shock.

How could this American institution collapse almost overnight?

In his meticulously researched new book, Crash of the Titans: Greed, Hubris, The Fall of Merrill Lynch and the Near-Collapse of Bank of America, Greg Farrell reveals it all in never before reported detail.

In this guest author blog Farrell shares how his book came to be and if you continue on, you can read an excerpt from Crash of the Titans.

Grade 3 Math Assignment

  
  Education
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Grade 3 Math Assignment

Tom has 1 apple.

Tom has promised to give Robbie, Jim, Anne and Mary, half an apple each.

How does Tom get 4 half apples from 1 apple?

Bonus Question:

While Robbie, Jim, Anne, and Mary are waiting for their half apple, Tom gets hungry and takes a couple bites out of the apple.  How does Tom now turn a half eaten apple into 4 half apples?

And you aren’t allowed to call it an iApple and say it can do anything.

Here is the basic problem and why Italian and Spanish bonds are getting crushed again today (ignoring horrific unemployment data out of Spain).

If Italy defaults with a 40% recovery, there  is 1.613 trillion euro of debt affected (that is up about 10 billion in about a month).  That means creditors would lose 970 trbillion.   Spain with 663 billion would cost almost 400 billion (its debt has shot up about 15 billion in a month). 

The problem is that EFSF doesn’t take default off the table.  It may delay the time to default (by helping roll debts as they mature), but all it mainly does is shift who would take the loss.  The guarantors can’t handle losses that big. (more…)

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