Be structured in tranches, which are called tranches, ordering, highest to lowest, the probability of default, and the commitment to prioritize the payment to the least bad. That is: 1. I buy a package of MBS, which tells me that the first three MBS are relatively good, the three seconds, very regular and the three others, frankly bad. This means that I have structured the package MBS in three tranches: the relatively good, very consistent and very bad. 2.
I agree that if the tranche will not pay very bad (or as they say these gentlemen, if in the wrong section incur in default), but collecting some of the very regular and quite tranche of relatively good, everything will go to pay mortgages tranche relatively good, thus, automatically, this tranche may be rated AAA. 3. (7 Comment: The "Comments IESE Economic Situation, January 2008, of which I have removed most of what I am saying, we call this" financial magic ") ii. To finish rolling to San Quirze, these arranged in MBS tranches were renamed as CDO (Collateralized Debt Obligations, Collateralized debt obligations), as they could have taken another exotic name. iii. Not content with this, the financial wizards created another important product: the CDS (Credit Default Swaps) In this case, the purchaser, who bought the CDO, assuming a risk of default by the CDO would buy gaining more interest. So, bought the CDO and said, "if it fails, I lose money.
If it fails, recovery plus interest. "Iv. Continuing with the inventions, set up another instrument, the Synthetic CDOs, which have not fully understood, but made a surprisingly high yield.
Gold occurred positive fact was to the junction of six central bankings: Canada, U.S.A., Japan, Great-Britain, Switzerland and European Central banking, for an action co-ordinated in aid to the countries in crisis in the zone of the Euro. Brazilian international reserves were in US$ 350,7 billion in day 29/11/2011. For other opinions and approaches, find out what Expert on growth strategy has to say. The investments right-handers of Brazilians in the exterior in 2010 had reached the mark of US$ 189, 2 billion, growth of 15% in comparison the 2009. The paper currency in metallic circulation and currency in being able of the population and the banks totalized in the day 30/11/2011 R$ 146.468.661.284, 74. (R$ 146,4 billion Source Central banking) According to reviewed Forbes Brazil has 19 new millionaire per day, consequence of the Brazilian economic growth, according to magazine, has 137 a thousand millionaire and about 30 bilionrios, the adopted statistics it was to the individual wealth, including real estate investments, saving, goods, action and other assets.
We must remember that Brazil is with 10 times more exchange reserves of what in the Nasdaq Crisis of 2.000-2002 (US$ 35.1 Billion), in comparison the crisis of 2008 we are with 73% more than the reserves in the deep sovereign who at the time age of US$ 203.1 billion. The nominal deficit fell of -2,5% in 2010 for -1,9% in 2011 until the moment. Level of unemployment in fall, the last index was of 5,9% front 8.5% of 2008, having increase of the international crisis the unemployment level will be able to go up. It does not have risk of bubble of credit in Brazil in virtue of the liquidity of the banking system, endorsed for banking regulation conservative, who diminishes risks. The index of immobilization of capital of the 50 bigger Brazilian banks is of 24,7% (March of 2011) half of the maximum percentage of established 50%. Real increase of the minimum wage is being auxiliadora measure of distribution of income in the country, as well as politics of incentive the formality as MEI (Micro Empreendedor Individual). The Program of Stock market Family is another instrument of reduction of the social inaqualities, of utmost importance for eradication of the misery in the country, the goal is to reach 16 million people (currently it is of 13 attended million), with percentile increase of expenditures of only 0.1% of the GIP, little for the global volume of benefits that generates the devoid families, however is clearly that it is necessary to create alternative of income and job for improvement of the per capita income of these families, through cooperatives of work, professional qualifications of a base of the population with little study and almost without qualification, therefore Brazil is improving, but evident that we need to establish education strategies less the families favored of the Brazilian society effectively to improve the income distribution. I am contented when perceiving the volume of Brazilian citizens who being assisting to change the future of this Country, thanks a lot to all!
To the times at dramatical moments as what we live currently, history finishes for placing an only man on the back of decisions that can finish with crises or aggravate them still more. It seems that in the crisis of subprime already we have the first candidate ' ' to load the weight of the world in costas' ' , he is the Secretary of the American Treasure, Timothy Geitner, professional young that directed until little time behind the Federal one Reserves (central banking of U.S.A.) in New York. Geithner is the face of the plan announced in 23 of March to rescue the banks, to reactivate the economy, to finish with the unemployment, at last, to save the day. A beginning little promissorH weeks, specialists criticized the Government of American president, Barack Obama, when saying that if it had distracted with other plans instead of acting with contundncia in the epicenter of the economic crisis, in the case, me the health of the banking system. In day 10 of February, the stock markets had fallen down when observing, disappointed, that Geithner, convoked the press to speak of the plan and concluded its speech without giving details of the same.
What they are ' ' asset podres' ' – the center of problemAtualmente, the banks in U.S.A. have its accounts ' ' contaminadas' ' for asset the quality, basically tied with the mortgages ' to me; ' subprime' ' , it hinders what them to appeal to the credit markets and, therefore, to count on resources enough to loan money to the companies and to the families. The plan of sells at retail – umCom more the market of almost paralyzed credit, the Department of the Treasure of U.S.A. elaborated a plan that recoups the banks without nationalizing them, as the republican legislators ask for. The plan consists of taking off of the rockings of the banks all these assets of the real estate market that do not have liquidity and that they are ' ' contaminando' ' its accounts.
… As we saw, the question of the time is primordial here: if this ' ' be opposed ' ' it failed is because the time of return to the normal balance was much more long that the foreseen one. All speculation, failed or well-succeeded, is always a question of timing! … The markets can remain illogical for times well longer of what we are capable of keeping in them solvent. Continuing our boarding, we will go, to follow, to show as the case of a badly-succeeded speculation.
Although initially such speculation had been successful, it cheated to fail after definitive moment, mainly, had to the fact of its formation of prices to be related to the one existence ' ' false demanda' ' or, preferably, of one ' ' demand lack efetiva' '. We are in relating here to the North American. In accordance with the economist Andres Orlan, ' ' consequentemente, the high one of the prices, far from discouraging the demand, excites the appearance of new purchasers, what it strengthens, in the same ratio, the speculative dynamics. It is this mechanism that is the cause of the sprouting of the speculative bubbles. The high one of the prices, when provoking one strong yield, increases the attraction for the asset and strengthens the demand, which, in turn, makes pressure for the high one of preos' '. REAL ESTATE BUBBLE (7) Continues Andres Orlan (7) in its boarding: ' ' Here it is here what beyond stirring up the purchase, independently same of the proper utility of the property, it adds this. It is of remaining portion in this way that a great part of the consumption of the families was financed, even so the real wages were estagnados' '. Still, Andres Orlan observes that ' ' the high one of the prices, far from depressing the demand favors, it intensifies and it.