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HenryTo
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Joined: 06 Aug 2004
Posts: 7257
Location: Houston, Texas & Los Angeles, California
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 Posted: Thu Jan 24, 2008 11:33 am Post subject: More European Writedowns? |
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Article implies that aside from UBS, many European banks still have not written down the value of their subprime securities - at least not according to market-based structured finance indices such as the ABX, etc.:
http://www.financialnews-us.com/?page=ushome&contentid=2349626264 |
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lmrhoades
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Joined: 17 Jan 2008
Posts: 92
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| Posted: Thu Jan 24, 2008 11:41 am Post subject: |
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What does that mean to you, that international markets will begin their own set of problems.
Are you saying not to invest overseas?
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LMR |
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HenryTo
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Joined: 06 Aug 2004
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Location: Houston, Texas & Los Angeles, California
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| Posted: Thu Jan 24, 2008 11:43 am Post subject: |
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Hi Len,
Yes, especially in European equities (including UK), in particular. As you know, I am still overweight Japanese equities, especially Japanese small caps.
I am also looking for the ECB to cut sooner rather than later.
Best,
Henry |
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rffrydr
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Joined: 30 Oct 2005
Posts: 6713
Location: Sunny California
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| Posted: Sun Feb 03, 2008 9:30 am Post subject: |
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Where are the writedowns?
Buy June 96 Euribor calls sell 2 96.25 for .25 cut in spring.
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Today is the Tomorrow you worried about Yesterday! |
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HenryTo
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Posts: 7257
Location: Houston, Texas & Los Angeles, California
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| Posted: Wed Mar 05, 2008 9:48 am Post subject: |
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Article asserts that there are more write-downs in the European banks to come, as the sector as a whole had been much slower than the U.S. financial sector in writing down losses:
http://www.thomsonimnews.com/story.asp?storycode=36697
| Quote: | BDO Stoy Hayward economist warns over 'false sense of security' that the European banks sector has less to fear than its US counterpart.
LONDON (Thomson IM) - The impact of the banking crisis on economic activity has been dramatically underestimated, according to Catherine Macleod, economist at BDO Stoy Hayward Investment Management.
And she warned that those who believe European banks are less exposed than their US peers are 'lulling themselves into a false sense of security.'
Macleod told Thomson Investment Management News: 'In developed economies, banking crises tend to have a longer term effect than they do in emerging markets because of the more integrated financial system.'
She also sounded a warning over the slow pace of loss disclosure that has been witnessed so far, pointing out that in studies of previous banking crises, the faster that NPLs or losses were declared, the shorter the crisis.
Various academic studies have found that banking crises typically cost about 4 pct of GDP relative to trend for each year that they persist, which is four years on average in developed economies. Banks tend to return to profitability after two years or so, but real credit growth falls markedly for three years. |
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