Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Archive for 20. August 2009

German Producer Prices Post Record Drop: First Sign of Deflation?

Posted by hkarner - 20. August 2009

  • The annual producer price index (PPI) posted its largest decline in 60 years, sliding by 7.8% y/y in July 2009 after falling 4.6% y/y in June 2009. On a monthly basis, the PPI declined 1.5% m/m in July. Excluding energy prices, PPI fell 0.2% m/m and 3.6% y/y. The strong decrease in producer prices gives more weight to the theory of looming deflation.

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New IASB/FASB Proposals Expand Fair Value Accounting: A Step Forward?

Posted by hkarner - 20. August 2009

Da bin ich aber neugierig? Ob sich das die Bank-Lobbies gefallen lassen? Bitte beachten Sie, dass ich das auch mit dem Schlagwort „Nasenring“ abgelegt habe (= die Aussage des Föhrenbergkrieses, dass die Banken die Politik am Nasenring vorführen!)

  • The Financial Accounting Standards Board (FASB) noted on August 13 that „it will consider expanding fair-value rules to loans, a step that might accelerate banks‘ recognition of losses and trigger lower earnings and book values.“ (Bloomberg)
  • American Bankers Association: The proposed rules are hasty and risk increasing the overall cost of doing business, especially for smaller banks. „Various high profile groups have studied the financial crisis and its root causes. In each case, accounting standards, while not being cited as causing the crisis, have been cited for improvement. Fair value accounting (also called „mark-to-market accounting“) and reserving for credit losses are accounting standards that are most often cited (particularly relating to pro-cyclicality), along with off-balance sheet vehicles.“

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Chinese Equities: Bubble Bursting?

Posted by hkarner - 20. August 2009

  • The Shanghai Composite Index fell 4.3% on August 19 and 5.8% on August 17, pulling the index down almost 20% from its high on August 4. The index remains up 53% for the year. Chinese equities rose along improvements in the Chinese economic outlook, benefiting from the credit extension. Stocks in the index trade at an average P/E ratio of 30.3, compared to an average of 17.5 for emerging markets but well below their 2007 peak. (Financial Times)
  • Despite concerns about a crackdown, it is the slowdown in liquidity (and even periodic outflows) that has contributed to the correction. The reduction in bank lending, non-renewal of short-term bills, restart in IPOs and selloff of previously untradeable shares contributed to the reduction in liquidity. (Lan Xue of Citigroup)

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