World economy talk

[uls]

the thinking goes...

if the ECB winds down QE, there will be less money flowing into equities

[uls]

Selloff in government bonds around the world

investors anticipating higher rates

the Fed is already on a rate hike path and the ECB is seen to taper QE soon

why sell bonds?

future bonds will offer higher interest than bonds today

[Walter]

since medyo naging boring bigla ang martial law thread and wala na activity sa RWM thread, magpopost muna ako dito even if nobody bothers to read (according to a tsikot member who ironically reads my posts)

Your posts are informative ... keep 'em coming ...

[uls]

Your posts are informative ... keep 'em coming ...

thanks man

[falken]

since medyo naging boring bigla ang martial law thread and wala na activity sa RWM thread, magpopost muna ako dito even if nobody bothers to read (according to a tsikot member who ironically reads my posts)

US Treasury prices rally and the dollar falls -- a big reversal since Trump won

a bit of history: immediately after Trump won bonds sold off and the dollar rallied because investors were excited about growth

since Republicans control the House, Senate, and presidency it was assumed laws like tax reform and increased govt spending can easily pass which will boost the economy

now it seems things aren’t moving as quickly and as smoothly as investors expect

I read your posts here. As Walter says, it's informative.👍

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[uls]

I read your posts here. As Walter says, it's informative.👍

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thanks

___________

[hinlog]

I read your posts here. As Walter says, it's informative.👍

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Same here..keep us posted

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[Walter]

Many read your interesting posts ... but few can reply since your topics are quite deep ... out of our league ...

[uls]

kaya ko lang nasabi ito...

since medyo naging boring bigla ang martial law thread and wala na activity sa RWM thread, magpopost muna ako dito even if nobody bothers to read (according to a tsikot member who ironically reads my posts)

kasi may nag sabi nito... (from resorts world thread)

Agree. Especially if you keep watching the stock market and paste economic and political theories that nobody cares to read.

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pero matagal na yan

no prob

[Lady Bathory]

Good morning to the 3 or 4 people who read his thread hahaha! This morning i'm going to talk about the euro. The European Central Bank (ECB) left policy unchanged as eurozone inflation is low and economic recovery is on track. The real news is the ECB will discuss tapering its bond-buying program later this year. That sent the euro rallying. The ECB has taken notice of the euro's strength. If the strength is sustained it could begin to threaten inflation and slow down export growth which are both critical to the ECB's outlook. So going forward, containing the euro could become a more important part of the ECB's communication.

[uls]

hey 3 or 4 ain't bad

hahaha

[xninjax]

Good morning to the 3 or 4 people who read his thread hahaha! This morning i'm going to talk about the euro. The European Central Bank (ECB) left policy unchanged as eurozone inflation is low and economic recovery is on track. The real news is the ECB will discuss tapering its bond-buying program later this year. That sent the euro rallying. The ECB has taken notice of the euro's strength. If the strength is sustained it could begin to threaten inflation and slow down export growth which are both critical to the ECB's outlook. So going forward, containing the euro could become a more important part of the ECB's communication.

Keep 'em coming

[Monseratto]

New U.S. Subprime Boom, Same Old Sins: Auto Defaults Are Soaring

[Ry_Tower]

New U.S. Subprime Boom, Same Old Sins: Auto Defaults Are Soaring

Hehe, parang kelan lang.

[Wh1stl3r]

Hehe, parang kelan lang.

Hehe. Di ba applicable din sa Pinas? Would be great if someone could give us figures for local auto loan defaults.

[Ry_Tower]

Actually that is true. Pero mukhang mas mahigpit pa din auto loans sa Pinas kesa sa US. Dami ko kasi kakilala na nag-apply pero hindi lahat na-approve. Nagchecheck talaga sila income. At least dito sa amin ha, mukhang sa MM and select big cities ata gumana yung scam na isang tao dami naloan na kotse.

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[uls]

coz there's demand for high yield bonds

Sa states, auto loan originators sell the loans to banks which package the loans into bonds and sell the bonds to investors

due to investor demand for such type of bonds, banks need to buy as many loans as they can to package into bonds

--

in the Phils., there's no such thing as auto loan securitization (correct me if i'm wrong)

whoever makes the loans, the loans sit on their books

unlike sa States, loans are hot potato

risk is transferred from one party to another

so loan originators have no incentive to screen borrowers thoroughly (they have incentive to make as many loans as they can)

and banks... they're only interested in selling the auto-loan backed bonds to investors

[uls]

it becomes a problem when the music stops

when auto-loan backed bond prices start falling coz the loans contained in those bonds start going bad

banks could get stuck with bonds nobody wants

that's what happened last decade

it was housing loans that went bad

many subprime home buyers started defaulting

so prices of many RMBS (residential mortgage backed securities) fell

demand for RMBS dried up

banks got stuck with bonds nobody wants (called toxic assets)

eventually banks had to be bailed out

[Wh1stl3r]

Actually that is true. Pero mukhang mas mahigpit pa din auto loans sa Pinas kesa sa US. Dami ko kasi kakilala na nag-apply pero hindi lahat na-approve. Nagchecheck talaga sila income. At least dito sa amin ha, mukhang sa MM and select big cities ata gumana yung scam na isang tao dami naloan na kotse.

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That's good to hear. Before that auto loan scam I also heard from a couple of bank managers that they had to say no to a couple of my former clients. I don't know how they discovered those two had collection cases. Both the bank and the casa rejected them. When I talked to the sales agent, she also knew about the cases.

BDO couldn't find ways hehe.

[Wh1stl3r]

it becomes a problem when the music stops

when auto-loan backed bond prices start falling coz the loans contained in those bonds start going bad

banks could get stuck with bonds nobody wants

that's what happened last decade

it was housing loans that went bad

many subprime home buyers started defaulting

so prices of many RMBS (residential mortgage backed securities) fell

demand for RMBS dried up

banks got stuck with bonds nobody wants (called toxic assets)

eventually banks had to be bailed out

I bet the bank execs were the ones who still came out on top after the bail outs.

You'd think the politicians would've put in safeguards to prevent that sort of thing from happening again.