Archive for the ‘Investment Info’ Category
Many are predicting the year 2010 was a year of recovery of the global economic crisis. But not a few who still put up cautious attitude continued even predicted the coming crisis of global crisis stage two aliases.
Before going further, let’s rewind a little to recall the conditions that occurred in past crises 2007-2008. Is an innovative product called the Subprime Mortgage who becomes the main cause.
Subprime is a loan (mortgage) at high risk are offered with attractive option, at least look like it. In the first year, Sub prime borrowers are not charged interest. The new interest rate charged after the first year.
This product is an attractive choice for lower-class communities in the United States (U.S.), because it makes them have the opportunity to have their own home. So many devotees, named Subprime mortgage bonds are also traded in capital markets with a variety of derivatives innovation.
Almost all major banks in the U.S. and Europe to invest in this product. Subprime product value is unsparing reached U.S. $ 1.5 trillion.
But unexpectedly, so the first year passed, the surprise came. Subprime customers apparently many are not able to repay the following principal interest has begun to wear after a year. As a result, major banks in the U.S. and Europe haunted by failure to pay is not absurdly responsibility.
Not only the U.S. and Europe, the impact is felt almost the entire world economy and capital markets, including Indonesia. A total of 123 banks in the U.S. was finally registered bankruptcy. Stock market indices around the world also experienced a sharp correction in the top 50% in just one year.
Fortunately, in 2009 the positive sentiment and spirit of optimism to lift back the indices of global stock markets from collapse. And in 2010, with the same spirit, it is hoped will be a year of recovery.
Unfortunately, the road of recovery and restructuring is unlikely to pass easily and smoothly. According to VP of Research & Analys PT Valbury Asia Securities Nico Omer Jonckheere, the world still has to go through two stages of the global crisis.
“The recession may have ended, but the depression was beginning. The real crisis is still ahead of us,” he said in a talk with detikFinance some time ago.
According to him, most people are too happy with the euphoria of the recovery in 2009, so missed seeing the signs of the crisis continued. Nico explains, Subprime Mortgage may have passed. However, he asserted, Subprime Mortgage is not the only high-risk mortgage products in the U.S..
Products mentioned Nico is mortgage product called Alt-A and Option ARM. Both products are often known as Ninja loans (No Income, No Job and Assets), which means mortgages for people who have no income, employment and collateral.
The difference with the Alt-A Subprime and Option ARM gives customers the flexibility to pay the mortgage during the first 5 years. After 5 years will be subject to periodic adjustment of rates.
“After 5 years, the average increase in interest rates reached 80%,” he said.
According to him, this product is also a time bomb that could be judged to have an impact even greater than Subprime. If the value of Subprime was only U.S. $ 1.5 trillion, the Alt-A and Option ARM respectively to reach U.S. $ 2.5 trillion and U.S. $ 500 billion. The total value of these two products reached U.S. $ 3 trillion.
“So the property market looks stable now, just waiting for the time of adjustment of mortgage rates that will begin this year (2010-2011),” he said.
If Subprime worth U.S. $ 1.5 trillion alone makes the world in shambles, you can imagine what would happen if it turns out customers products and Alt-A Option ARM also could not repay the interest after the adjustment of interest will occur mid-year 2010.
In addition, Nico also saw commercial property loans already showing signs of collapse. For the record, the value of commercial real estate loans in the U.S. reached U.S. $ 3.5 trillion.
“Commercial property prices fell by more than 34% during 2009. Customers who fail to pay the mortgage increased from 1% to 9%. The value of default rose 423% to U.S. $ 52.7 billion from the year 2008 amounted to U.S. $ 12.5 billion,” Nico said.
The volume of commercial property transactions, continued Nico, a sharp decrease of the amount of U.S. $ 133.2 billion in 2007 to U.S. $ 4.8 billion in the first quarter of 2009.
“About 90 thousand in the U.S. commercial property is currently not occupied, empty,” said Nico.
In addition, added Nico, more than 2,600 banks in the U.S. has a portfolio of commercial property loans above 300% of specified risk limits (risk based capital).
“Therefore, hundreds of small and medium-sized banks in the U.S. who have provided loans for commercial property must prepare to face the huge losses that may inundate their resources,” he said.
Nico also said that during the year 2009, banks worldwide have been doing the bleaching of debt worth U.S. $ 1 trillion due to the increased defaults. He estimates, the bleaching of debt that will be the world’s banks during the year 2010 will reach U.S. $ 1.5 trillion.
“In mid 2010, the losses at U.S. banks will exceed the great depression of 1929,” he said.
U.S. job market is also assessed Nico potentially increased sharply up to the level of 13%. According to him, the current condition of U.S. society is very bad.
“1 of 9 Americans, or about 39 million people, depend on the Food Stamp (food stamps) are provided by the federal government,” he said.
If you have this, he added, economic conditions will certainly mendek. Without a new job then there is no income. Without income, there is no purchase of goods and services. Without the purchase, corporate profits will not increase. And finally there are no new job creation.
Severity of the current global economic conditions, according to Nico because the economic system has driven debt is too big, so it stuck on the condition of excess debt.
Based on IMF data as disclosed Nico, the debt of countries that are members of the G20 forum expected to rise on average to a level of 118.4% of the total GDP of its member countries in 2014.
“The main problem of the world economy is now no shortage of money, but the excess debt. The main problem the U.S. economy is still recovering property market, soaring government debt, high unemployment, the credit is not flowing,” he explained.
Nico also predicts the appearance of disappointing economic indicators of developed countries. Then would appear the company reports an increase in net income that is not supported by increased sales.
That means more profit improvement driven by efficiency rather than by increased demand in the market. Purchasing power has not increased. In addition, the price to earnings ratio (PER) of stocks in the U.S. have reached 26 times, a level considered too high Nico.
Over a number of his analysis, he urged market participants more cautious in making investment measures. Because, if the depression does occur, the stock indices around the world will again fall.
“Dow Jones will penetrate the lowest level in past crises at the level of 6469.95. It falls within the range of 3800-5000. JCI could fall back below 2,000 and even below 1,000,” he said.
Nevertheless, market participants suggest Nico made a sale of at least 50% of the portfolio shares into cash. Because cash is required to make purchases when stock prices were collapsing.
“In addition to securing funding, if the market falls, it could make purchases when prices are cheap. You did not earn the maximum profit potential, but you also will not feel hurt,” he said.
“And, keep in mind that every crisis or danger in the fact offer many opportunities. Now the international stock valuations are still expensive, but after the next crash will most likely all of the shares can be purchased at the price it is tempting,
Money market instruments are short-term debt of less than one year issued by governments or companies. In return, you as a creditor will get some interest from the initial value of your investment. Generally, this interest will be paid at the end of investment period.
Examples of money market instruments are deposits, Bank Indonesia Certificates and promissory notes. In general, money market instruments have high levels of investment risk in the form of failing to pay the value of investments and the interest is very low.
Bonds are debt securities issued by governments or companies. Duration of debt on the bonds is more than one year. Bonds traded in capital markets. You are buying bonds will get rewarded with some flowers from the initial value of your investment, which is called the coupon. This coupon is usually paid every 3 or 6 months in one year,
Bonds lower level of investment risk, but the risk is slightly above money market instruments. The biggest risk faced by you as the bondholder is the possibility that the issuer can not repay its debts. Therefore, there are agencies that give ratings to bonds issued to find out how big the risk of default on the bonds.
Stock is proof of a person’s ownership of a company. People who own shares are entitled to share the gains the company, called the dividend, according to the percentage of ownership in the company. In addition, a company’s stock price will move follows the company’s performance.
If the company is performing well, then the share price will go up so that shareholders will benefit if you sell shares. Shares are also traded on the stock market and have a high level of investment risk, because there is a risk of bankruptcy a company so that your money can be lost.
In investing in stocks, you should find out if the company really has a good performance. You must do the analysis based on financial statements issued by the company, the country’s economic conditions, and other things that simply take up your time. But of course this is comparable to the potential gains.
Mutual fund is a container to collect public funds are managed by a statutory body called the Investment Manager to then be invested into other financial assets. The funds are deposited in a bank deposit with the custodian bank called.
Mutual funds are the solution for people who want to invest in many assets, but have limited funds. This is possible because the funds collected from many quarters large enough to then be invested in stocks, bonds and money market instruments in accordance with the policies of the Investment Manager.
In addition, a mutual fund is also an excellent solution for memilii limitations in knowledge and information in conducting investment analysis, as well as for those who do not have enough time to oversee the daily movement of stocks and bonds you. To find out more details about mutual funds, you can read the Mutual Fund & You.