Mười năm sau cuộc khủng hoảng tài chính châu Á, liệu chúng ta sắp chứng kiến một cuộc khủng hoảng mới? Lướt qua một loạt báo mạng VN, chỉ duy nhất một tin đề cập về vấn đề này trong số rất nhiều tin ít quan trọng hơn.
The below writing contains personal opionions. Any comments or different opinions are welcome.
The credit crunch
What
It’s a liquidity problem. Financial institutions had over-committed in giving out high-risk loans and in financing M&As, LBOs. Since late 2006, when the subprime (high-risk) mortgage proved to be troublesome, several lenders went bankrupts. This leads to a concern to the level of exposure the financial institutions have.
A credit crunch makes it nearly impossible for companies to borrow because lenders are scared of bankruptcies or defaults, which result in higher rates.
Concerns
The US mortgage has totaled to US$ 600 billions. The estimated credit default is about US$100-200 billions. This is not too much for the US market to absorb. However, there are a few factors that signify the credit crunch.
- Spreading credit problem: from a sub-prime US mortgage, the credit problem has spreaded to hedge funds that bought home mortgage-backed securities, to corporate junk bonds, and to other areas which has no US exposure.
- A recent over-aggressive M&As, LBOs, private equity plays have resulted huge credit commitment. The credit problem may affect the banks ability to finance these deals.
- Transparency: A system of complex, complicated financial instruments and ever-increasing dependence between markets and between financial institutions has made it very hard to estimate the true extent of the impact.
- Possible adverse impact to the US economy: banks have tighten their credit business. This will lead to less loans, less consuming, less manufacturing especially in big dollar items such as houses and cars, less jobs, and so on.
KKey developments
- Early 2007 : sub-prime mortgage melt-down.
- 21 Jun 07 : Two investment funds (US$ 1.5 billions) of Bear Stearns crashed.
- 30 Jul 07 : State-own and private German banks bailed out IKB Deutsche Industriebank with US$ 4.8b fund. IKB announced huge loss link to US sub-prime one week after it said it faced no risk.
- 02 Aug 07 : American Home Mortgage Investment files for bankruptcy protection.
- 07 Aug 07 : US Fed keeps interest rate steady, calmed market.
- 09 Aug 08 : BNP Paribas suspended 3 funds (US$ 3b) because of no liquidity, trigger panic button, after last week bank executive had claimed of little exposure.
- 09 Aug 07 : Central banks rushed to pump money to the markets. ECB 94.8b Euro, US Fed $24b.
- 10 Aug 07 : ECB 61.1b Euro, US Fed $19b, BoJ 1.0 trillion yen, Reserve bank of Australia A$ 4.95b.
How does the US mortgage problem affect world-wide markets?
Europe: the affect of the US credit problem to Europe is more direct and visible.
Large banks in Europe have direct operations in the US. Many exposes to the US home mortgage melt-down like BNP Paribas. This leaves Europe in a situation very similar to that of the US.
Asian markets: will be bearish for 3 indirect reasons
- Asian markets often trail the performance of Wall Street, which will be very gloomy and shaky for some time to come.
- During turmoil time like these, investors will play defensive. Since emerging markets are deemed high-risk, we should expect an out-flow of capital from these markets.
- US is the biggest market for most Asian countries. A possible downturn of US economy and consumption will dampen growth of the local companies and support more sell-offs in the markets .
How does it affect VN market?
China and Vietnam markets should be considered pre-matured. Capital flow limits, capped foreign ownership and minimal exposure to US credit market will allow VN market to continue traveling its own course. However, the local retail investors’ (and the so-called financial press’) current only obsession seem to be the activities of “khoai-tây” funds, and whatever “market overview” reports of khoai-tây financial institutions that they can get hold of.
Given the global gloomy outlook and a high-risk profile of Vietnamese market, the khoai-tây at best won’t add more money here for now. In short, there’s not much to cheers about.
