Recuperación en los mercados, o la forma de la recesión

Miss Marple · 1 May 2008

Desde la city de Londres y Wall Street, hay que decir que abril ha sido un buen mes para los mercados financieros. Tras la carnicería que fue marzo, con la caída de Bear Stearns y el rescate de urgencia de la Fed a los otros bancos de inversión, en abril el pánico ha desaparecido. Los bancos siguen declarando pérdidas, pero de modo ordenado, y lo más importante, aprovechan la ocasión para ampliaciones de capital que no se quedan sin suscribir (la más reciente de Citi fue ampliada en el último minuto dado el exceso de demanda). Las primas de riesgo en los CDS se han reducido a menos de la mitad de lo que eran a mitad de marzo. La confianza ha vuelto a los mercados de bonos corporativos, e incluso a los de alto riesgo. Parte de la montaña de deuda apalancada en las macro-operaciones de capital riesgo del año pasado (por ejemplo la compra de Boots), que estaba en los balances de los bancos desde entonces, se ha empezado a vender. Hemos visto una procesión de presidentes de banco (Dimon, Fuld, Pandit, Ackerman) declarar que lo peor de la crisis puede haber pasado ya. La Fed ha hecho su trabajo (salvar a los bancos, olvidarse de la inflación), rubricado con el recorte de tipos de ayer y el anuncio de que las bajadas se acabaron. Todavía hay nerviosismo, claro, pero las nubes parece que se aclaran.

¿Que significa todo esto? Los mercados financieros suelen ir adelantados a la economía real. Tras el reconocimiento casi universal de que los US estaban en recesión en el primer trimestre (la cifra de 0,4 de crecimiento oficial del PIB no ha hecho nada para disipar esa impresión, dado el irrisorio deflactor usado), ¿es posible que la recesión sea breve y ligera, una "V" que pasa y se va? ¿Estará la economía USA ya recuperándose en el otoño?

Incluyo este articulo de Roubini para que se entienda de que hablo, y luego unos comentarios.

The US Recession: V or U or W or L-Shaped?

Nouriel Roubini | Apr 7, 2008
Now that there is no doubt that the US is experiencing a recession the debate is moving towards the length, size and depth of such a recession. Will it be a short and shallow recession or a longer and deeper one?
In principle the US recession could end up being V or U or W or L-Shaped. Which one of these four scenarios is most likely?
Let us analyze this question in more detail…
The current new consensus among macro forecasters and Wall Street firms is that the recession will be V-shaped, i.e. be short and shallow. Most analysts argue that GDP will contract in Q1 and Q2 and recover in the second half of 2008.

My view is closer to a U-shaped recession as I expect that the economic contraction will last at least 12 months and possibly as long as 18 months through the middle of 2009. This view is based on the fact that the last two recessions – in 1990-91 and 2001 – lasted 8 months each and today the macro and financial conditions are worse – relative to those two previous recessions - in at least three dimensions:

We are experiencing the worst US housing recession since the Great Depression and this housing recession is nowhere near bottoming out. Housing starts have fallen 50% but new home sales have fallen more than 60% thus creating a glut of new –and existing homes- that is pushing home prices sharply down, already 10% so far and another 10% in 2008. With home prices down 10% $2 trillion of home wealth is already wiped out and 6 million households have negative equity and may walk away from their homes; with home prices falling by year end 20% $4 trillion of housing wealth will be destroyed and 16 million households will be in negative wealth territory. And by 2010 the cumulative fall in home prices will be close to 30% with $6 trillion of home equity destroyed and 21 million households (40% of the 51 million having a mortgage being underwater). Potential credit losses from households walking away from their homes (“jingle mail”) could be $1 trillion or more, thus wiping out most of the capital of the US financial system.

In 2001 it was the corporate sector (10% of GDP or real investment) to be in trouble. Today it is the household sector (70% of GDP in private consumption) to be in trouble. The US consumer is shopped out, saving-less, debt burdened (debt being 136% of income) and buffeted by many negative shocks: falling home prices, falling home equity withdrawal, falling stock prices, rising debt servicing ratios, credit crunch in mortgages and – increasingly – consumer credit, rising oil and gasoline prices, falling employment (now for three months in a row), rising inflation eroding real incomes, sluggish real income growth.

The US is experiencing its most severe financial crisis since the Great Depression. This is not just a subprime meltdown. Losses are spreading to near prime and prime mortgages; they are spreading to commercial real estate mortgages. They will spread to unsecured consumer credit in a recession (credit cards, auto loans, student loans). The losses are now increasing in the leveraged loans that financed reckless and excessively debt-burdened LBOs; they are spreading to muni bonds as default rates among municipalities will rise in a housing-led recession; they are spreading to industrial and commercial loans. And they will soon spread to corporate bonds – and thus to the CDS market – as default rates – close to 0% in 2006-2007 will spike above 10% during a recession. I estimate that financial losses outside residential mortgages (and related RMBS and CDOs) will be at least $700 billion (an estimate close to a similar one presented by Goldman Sachs). Thus, total financial losses – including possibly a $1 trillion in mortgages and related securitized products - could be as high as $1.7 trillion.

Thus, given the worst US housing recession since the Great Depression, a US consumer who is on the ropes and at its tipping point and a most severe financial crisis and credit crunch it is delusional to argue that the current recession will be milder (6 months) than the mild and shallow recessions (lasting 8 months) that the US experienced in the last two times.
Could the US recession end up being W-shaped, i.e. a double-dip recession? This view is presented by those who argue that the recent fiscal stimulus – that will provide a tax rebate to US households in May-June – could lead - after negative growth in Q1 and Q2 - to a positive economic growth in Q3 and possibly part of Q4 to be ***owed by a relapse into a second recession by year end or early 2009 when the effects of such fiscal stimulus fade out. Such a W-shaped recession – effective a U-shaped recession with a small temporary upward blip in the middle of it (thus a W-shaped one) cannot be ruled out. The main question mark is whether the tax rebate that US household will receive in the middle of 2008 will be mostly consumed – thus leading to a positive Q3 growth – or will be saved in which case we will have a U- shaped recession rather than a W-shaped one. One can make arguments either way on the effect on consumption and savings of a temporary tax rebate. Given how stretched are the financed of many US households it is likely that a good part of this tax rebate will not be spent: it may be rather be used to run down very high credit card balances (or other unsecured consumer credit) or be used by distressed households to postpone delinquencies on their mortgages. If a good part of the tax rebate were to be saved than consumed we would have a U-shaped recession. Otherwise it is likely that we would observe a W-shaped recession. Either way the recession would be longer and deeper - rather than shorter and shallow – as a positive surge in Q3 in private consumption would quickly fade out once the effects of such a fiscal stimulus fade away by Q4 or year end.
Finally, could the US experience an L-shaped recession, i.e. a protracted period of economic stagnation like the one experienced by Japan in the 1990s after the bursting of its housing and equity bubble? My view is that a protracted economic stagnation – bordering on an economic depression – is unlikely in the case of the US as the policy response of the US is already more aggressive than the one of Japan. Japan waited almost two years after the bursting of its bubble to ease monetary policy; and it waited two years before providing fiscal stimulus. In the US, instead, both monetary and fiscal stimulus have started in earnest early on. Also Japanese postponed the necessary corporate and banking restructuring for years keeping alive zombie firms and zombie banks via inappropriate forms of forbearance. In the US both private and especially public efforts to restructure the impaired assets and firms will start faster and more aggressively. Thus the risk of a decade-long economic stagnation is quite limited so far.
Still with a severe recession lasting 12 to 18 months, a severe financial crisis and credit crunch this will not be a typical run-of-the-mill recession. This will turn out to be the most severe recession and financial crisis that the US has experienced for decades. Thus, the current conditions and valuations in US equity and financial markets – that currently price a mild and shallow recession – will be proven wrong as the bottom of the real economic contraction and the bottom of the financial and credit losses are ahead of us rather than behind us. The sense of complacency in financial markets – especially equity markets – ***owing the Bear Stearns rescue will be dashed in the next few months as an onslaught of poor macro and financial news will lead to further realization that aggressive monetary policy easing by the Fed will not prevent a severe recession and the ensuing financial losses.
Indeed, in spite of the partial recovery of equity markets, conditions in money markets - as measured by interbank spreads relative to policy rates or safe Treasuries- remain very stressed both in the US and in Europe; and the shutdown of most credit markets, the very high credit spreads, the reduction of leverage and credit contraction remain almost as severe as they have been in the last few months. Thus, money markets and credit markets remain very stressed and highly dislocated in spite of the most aggressive orthodox and unorthodox policy measures that have been used to try to unclog such financial markets.

Estoy en desacuerdo con Roubini. Mi opinión es que la recesión en USA tendrá forma de "W", con una recuperación breve de la econmía real en el 3er o 4o trimestre de este año, y una nueva caida, más pronunciada y de efecto más duradero, empezando en el 4T o el 1T de 2009. Por muchos deseos que haya de pasar página, y por mucho dinero que quede dando vueltas buscando donde invertir (y créanme que hay mucho), los mercados financieros no pueden salir del marasmo hasta que se sepa la extensión completa de las pérdidas sub-prime (que seguiran saliendo mientras siga creciendo la jovenlandesesidad), y -lo más importante- su efecto sobre el consumo; y aún falta tiempo para eso. Los mercados financieros, en efecto, van adelantados sobre la economía real; veremos este cauto rebote convertirse en un principio de euforia, y lo veremos hundirse otra vez, y más profundamente, en otoño. No pasa nada, no es el fin del mundo ni se ha acabado el petroleo (todavía). La vida sigue, y los banqueros a los que echan se pueden reconvertir y encontrar trabajo en granjas de ganado o explotaciones apícolas.

¿Y en España, el único país del mundo donde en vez de aprovechar la ocasión para reconocer pérdidas y mejorar balances, los bancos sacan pecho fardando de beneficios mientras dejan caer sus ratios de cobertura ante el inevitable tsunami de jovenlandesesidad que ya se alza ante ellos?
En España la elección ya está hecha: se ha decidido que la forma que más gusta es la "L" de Champions League. No hace falta que miremos a Japón, nuestro modelo está mucho más cercano. Menos mal que nos queda Portugal.

Asdrúbal el Bello · 1 May 2008