2009 Outlook from John Paulson: Expect More Pain, says Hedge Fund King

轉載自blog Creative Capital . John Paulson 於現今金融環境下, 對2009的經濟看法及其投資策略.

A big bank invited Paulson on the call with wealth managers to offer his thoughts on the economy and his detailed investment strategy for profiting from today’s financial chaos. With $36 billion under management, Paulson & Co. is one of the 10 largest hedge fund managers in the world, and he recently testified before Congress.

Among the highlights:
- He thinks the housing market won’t bottom until 2010, with housing prices to falling another 10% to 20% from current levels before they bottom.
- The financial sector has only written off half of the toxic assets on its balance sheet, so avoid investing in financials for now.
- He sees no threat of inflation in the short term but it will be hard to contain once the economy rebounds.

Here are the notes:

We believe it will be the worst recession since WWII and possibly the Great Depression.

Reasons:
1. The decline in housing that shows no signs of stabilization. We expect housing prices to fall another 10% to 20% from current levels before they bottom.
2. Consumer: the consumer can no longer borrow to the extent they have in the past.
3. Global crunch: pressuring economy. Global stocks down 50%

We think the headwinds are very strong.

We don’t believe we are through the crisis in the financial area.
Total write-downs will approach $ 1.8 trillion.We are about halfway through the writedown process.
Most investors who invested capital in banks have lost money.
Hence the government increasing its role in recapitalizing the banks.

The terms are going to become increasingly onerous, which will put pressure on the equity of financial institutions.

We are very bullish on the investment opportunities available.

The best opportunities for us in 2009 and 2010:
* Distressed mortgages. We’ve been buying the triple AAA tranches of these securities. Quite aggressively buying them at yields in the 20% to 25% range. We like mortgage securities because they self liquidate.

* Distressed debt, both leveraged loans and high yield debt; we’ve started to allocate money to that area. It’s very tricky. Targeting companies that will not go bankrupt. Yields north of 30%. There are thousands of issues out there.

* Bankruptcies: defaulted debt securities of bankrupted companies. i.e. Tribune Co. Those bonds went from 80 cents to 27 cents on dollar for senior secured loans. $110 billion in bankrupt bonds. There is a tremendous amount of supply but limited buyers. We are finding attractive opportunities. 2 to 4 times multiple

* Merger arbitrage: a lot of money has come out of the sector. We focus on the corporate strategic deals for all stock. i.e. Merrill Lynch and BofA. We buy Merrill and short BofA to lock in the spread. 31% return currently. Arbing National City/PMC, Wachovia/Wells Fargo. Returns are in 30% to 60% range. 3-6 month time frame. These are some of the highest spreads we’ve seen. Most successful deal we’ve seen was Budweiser/InBev.

* Debt restructuring: GMAC, we buy the old bonds and swap them for new bonds.

* As we get further on in the cycle investing in financials that are recapitalizing will be an attractive area. It is premature to make those investments today. After most of the writedowns are done. That will represent a highly attractive long-term investment opp.

Factors driving home prices down:
* high percent of foreclosures; banks must sell homes quickly. Current inventory of homes is 11 months. Banks have to lower prices to sell homes. Takes 12 months to foreclose home. The backlog of homes is enormous.
* Limitations on financing: 40% of mortgages made during boom would not get made today. Need income and down payment. The pool of potential acquirers is more limited

Why buy these securities?
We factor these declines as much as 25% into our analysis. We then estimate default percentages. Then estimate losses in pools and cash recoveries.

I don’t think we’ll hit the bottom until 2010.

How much will the bold moves by Washington help?
There’s a limit to what you can do. You can’t help people who can’t afford their mortgages.

How much leverage do your funds use?
Generally our funds don’t use leverage. There’s a thing called Reg T. It calls for 50% margin. That’s the only type of leverage our base funds use.
Over last 5 years our base fund equity to capital under management was 90%. Peak was 33%.

Inflation?
The economy is unlikely to see inflation in the short term.
But once the economy returns to moderate growth that’s when it becomes an issue.
It will be hard for the government to contain inflation at that point.
Raising interest rates or lowering gov spending could slow the economy.

HF資金外流創新高

投資者上個月從對沖基金中撤出了320億美元資金，這使得2008年成為有史以來第一個對沖基金業出現大幅資金外流的年份，並終結了長達18年之久的資產增長。

Hedge Fund Research的數據顯示，採用任何一種投資策略的對沖基金都有資金撤出——即使是那些存在盈利的基金，如宏觀基金(Macro Funds)。

今年上半年，即便在金融危機襲來以及傳統共同基金開始出現資金外流之際，仍有資金流入對沖基金。

TrimTabs首席運營官康拉德·甘恩(Conrad Gann)稱，"我們估計，11月份的資金外流為320億美元。而且，另一波贖回潮仍在持續，12月份[贖回的]資金可能為800億美元。"
source:FT

日韓股市創有史以來最大年度跌幅

東京日經225指數(Nikkei 225 index)今年創下42.1%的年度跌幅，遠遠超過1990年38.7%的上一最大年度跌幅。韓國Kospi指數今年跌幅亦高達40.7%。

新光證券(Shinko Securities)市場分析師Yukio Takahashi表示﹐2008年是股市劇烈波動的一年﹐外匯和大宗商品市場表現也類似。不過日本股市12月份上漲4.1%﹐為5月份以來首個上漲的月份。

一些分析師表示﹐對於美國當選總統奧巴馬(Barack Obama)可能推出的經濟政策所寄予的希望對近期股市表現構成支持。分析師們表示﹐在奧巴馬於1月20日就職前﹐日經指數可能保持堅挺﹐不過在此之後可能因缺乏有利交投線索而面臨拋售壓力。

在紐約，S&P 500今年已累計下跌41%，這令其成為自1931年大蕭條(Great Depression)期間下跌47.1%以來的最糟糕紀錄。< source:wsj. FT>

10月份S&P/Case-Shiller繼續下滑

10月份S&P/Case-Shiller住房價格指數繼續下降.

受到密切關注的美國S&P/Case-Shiller住房價格指數顯示﹐隨著經濟低迷程度加深﹐10月份房價繼續走低﹔其中陽光地帶(Sun Belt)沿線地區的房價依然受到最為嚴重的打擊。

數據顯示﹐美國10座大城市10月份的綜合住房價格指數較上年同期下降19%﹐較9月份下降3.6%。這是10座大城市的住房價格連續第13個月創出紀錄跌幅。美國20座大城市的綜合房價指數10月份較上年同期下降18%﹐也創出歷史最大降幅﹔較9月份則下降2.2%。<wsj>

別讓五十位胡佛總統扯後腿

Paull Krugman : Fifty Herbert Hoovers
chinatime 的中文摘譯部份內容:

當代美國總統沒有任何一位會重犯一九三二年的財政錯誤。那時聯邦政府面對嚴重衰退，仍試圖平衡預算。而今歐巴馬政府為了對抗經濟危機，將把赤字考量擺一邊。

但華府努力救經濟，美國卻會因「五十位胡佛總統」的作為而步履蹣跚。五十位胡佛指的就是在衰退期還要刪減支出的州長，他們犧牲掉的，往往是最寶貴的選民和國家經濟的未來。

州長們不是笨蛋。他們削減支出是因為他們落入財務陷阱，不得不然。但從全國觀點思考，此時刪減公共服務和公共投資是多麼瘋狂的事。

經濟正在萎縮是事實，但那是私人支出衰退的結果。這時再刪減公共開銷，讓問題加劇，沒什麼道理。

事實上，政府計畫的真正成本，特別是公共投資，比起繁榮時期低了許多。經濟快速發展時，公共投資必須和私人投資爭奪稀少的資源，如熟練的建設工人及資金。不過現在許多工人只能受雇於基礎建設計畫，否則將面臨失業，借來的錢不用於這些計畫，會變成閒錢。

受過教育的人口是國家的資產，那為何基本教育主要是由地方政府買單？每當經濟遇到麻煩，地方政府就得被迫忽視下一代。

還有，能為國效命數十年的基礎建設，為何其投資經費得靠地方政府預算施捨？

當前優先要務是擊退五十位胡佛的攻擊，以確保各州的財政問題不致讓經濟危機更加惡化。 <全文>

佛里曼- 是重新啟動美國的時候了

Thomas Friedman：不僅紓困 整個美國需要一場徹底的改革

新聞界極具影響力的 Thomas Friedman，同時也是《世界是平的》一書作者指出，美國現在需要的可能不只是紓困 ，而是一場徹頭徹尾的大改革。

美國政府終於出手拯救 General Motors(GM-US)，這是一間在過去 4年虧損超過 720億美元的美國汽車大老，大批員工現在不是遭到調職就是資遣。

不過，政府救援的汽車廠現在幾乎已經是一個巨大的廢鐵。從此點延伸到整個面向來看，Thomas Friedman指出美國具有許多急待改革的長期性問題。 美國人一直活在減稅的期盼裡，已經到經濟體無法 承受的程度；現在能源價格的水準無法鼓勵再生能源或是效率更高的投資；公立學校缺乏統籌性標準，教育出來的學生良莠不齊。更欠缺完善的移民制度來照顧那些來自全球各地最優秀的科學家與工程師。

反之，許多應該做真正工程事業的人跑去做「金融業工程」，放棄了可以真正改善生活或是創造生產力的事業，轉而去發明各種繁複的金融工具來讓錢滾錢。基於這一點， Thomas Friedman認為，美國目前面臨危機的並不只是金融業瓦解，而是更嚴重的問題。「General Motors就是整個美國的縮影，完整照映出美國經濟改變後的面貌。」

美國現在需要的不僅是紓困，而是整體的「重新啟動」(reboot)，徹底的改頭換面，因此未來幾個月的發展，將成為美國史上最重要的一個轉折。由於金融危機之故，新任總統Barack Obama(歐巴馬)高達 1兆美元的振興方案，已經獲得兩黨人馬點頭，不過這筆來自納稅人的資金，每一分一毫都得確實針對病處下藥。

Thomas Friedman 在之前的專欄就曾提到，美國社會的邏輯是非汽車或金融的產業，出了事恐怕也不會有人想要來拯救，這就是政府重視的觀念不同所致，媒體集團 Tribune也就是這樣走上破產一途。

Thomas Friedman 指出，下一代會怎樣看現在我們所處的這一代？恐怕不是「最偉大」，而是可能會被稱為「最貪心的一代，同時也是信用卡刷爆再等別人來救的一代。

Thomas Friedman 認為，振興方案的內容應囊括培訓教師、科學家與工程師，鼓勵研究以及興建可加強生產力的基礎建設，以及推動新型產業與創造市場利基。

「總統John Kennedy曾讓我們實現成功登上月球的夢。現在歐巴馬需要帶領我們走向重新探索的路，重建屬於國家自己的契機。」

是重新啟動美國的時候了
不僅紓困 整個美國需要一場徹底的改革

Roubini interviews on his 2009 outlook

Roubini在Financial Time 專訪中談其2009年經濟的看法. 他被稱為末日經濟學家, 故應可歸屬於較悲觀派的經濟學家. 內容重點如下

Nouriel Roubini on His Outlook for 2009

Part 1, December 17 2008: Nouriel Roubini, expects 2009 to be a year of stagflation and recession for most of the global economic stagflation and recession for most of the global economy. He expects a severe, global recession. Whether or not it persists in 2010 will depend on how aggressive and effective policy actions are: monetary policy and fiscal policy and efforts to recapitalize financial institutions in the US and elsewhere. He believes there could be a return to positive economic growth by 2010. The European Central Bank should follow the Federal Reserve and cut interest rates further. The US needs a plan to reduce the debt burden to US households. The remedies will cost tax payers a lot of money.

Nouriel Roubini on The Culprits of the Crisis

Part 2, December 17, 2008: Nouriel Roubini blames the Federal Reserve, regulators, the greed and arrogance of Wall Street and credit rating agencies for fueling a global asset bubble. The financial system has already changed radically. The times of self-regulation - which means no regulation - are gone. There is always a question of who regulates the regulators. A significant amount of fiscal resources should be devoted to appropriate regulation, the system needs more regulators and more auditors. This is not the end of capitalism or the end of market economies, but there has to be an appropriate role for governments to make sure the financial system and the real economy are working the way they should.

Nouriel Roubini on the next "shoe to drop"

Part 3, December 17, 2008: Nouriel Roubini expects further financial stress. "A thousand if not more" hedge funds could go bust all at the same time. This means the selling of distress assets could continue. Another source of stress is emerging markets economies; there are about a dozen on the verge of a potential financial crisis, such as Latvia, Estonia, Lithuania, Hungary, Bulgaria, Romania, Turkey, Ukraine, Pakistan, Indonesia, Korea, Ecuador, Argentina and Venezuela. Other skeletons could come out of the opaque financial system, similar to the Bernard Madoff scandal. The dollar is likely to weaken over the medium term. US and global equities could see declines of another 15 to 20 per cent in the next few months and a bear market rally will fizzle out. Commodity prices could fall another 15 to 20 percent. Cash and cash like instruments like safe government bonds are still the safest bet for the next few months. (video)

resource: RGE Monitor
related news: 2009將是最糟一年 2010方露復甦曙光