Tuesday, September 18, 2007

SHADOW OF RECESION

(Published in El Correo Canadiense)
By Sergio Granillo

“You never reduce the value of land”, my Accounting teacher told me at the end of a monthly exam in the College, pointing out an error in my test. Unfortunately, 10 years later, my only property in a Southern Mexican State was dramatically affected and its commercial price got reduced to 25% of its original value!

Mexicans know what economic crises mean. On 1995, the “Mexican Dream” crumbled to into a night mare after the most controversial former President of Mexico, Carlos Salinas de Gortari finished his government and handed it over to Ernesto Zedillo Ponce de León.

Based upon the opening of the Mexican economy to the world, banks transferred from the State to the private sector, many jobs were created, credits were available for anyone to purchase anything from imports to vehicles and properties; getting credit cards and loans was the easiest thing in the world. But everything was a delusion, the whole banking system in Mexico declared bankruptcy, thousands of jobs were lost, thousands of families lost all their assets, some people even committed suicide.

These are the effects of ephemeral low interest rates, when they are down it seems so easy to buy anything you have dreamed of, but when variable rates move up, in the Mexican case, over 100% form one day to the other, and the salaries stuck in the same levels, suddenly you can not pay anymore the new TV, the new car or the new house.

Then the financial institutions or intermediaries that lend that money called to let you know that you should pay the double of the monthly payment (and going up and up), or pay the full amount plus interests or they take the item or the property to re-sell. People who owed small car lost their homes, which were deposited in guarantee to back up the credits. In few months the Real Estate market was stuffed with properties on sale, no one to buy them, no credits available at all.

Mexico seemed a machine producing poor people every single day, no sales, no jobs, in a vice cycle hard to break. Almost every single person in the country owed money; some families in despair decided to join a group called “El Barzón”, who fought against the abuses of the banks, lawyers harassing families to pay their debts were beaten and covered with feathers.

In some neighborhoods in Mexico City, when an eviction was to come, a bunch of men and women, sticks and chains on their hands, joined to fight not allowing the police to take families out of their homes.

Not as bad, but somehow similar is the story that is developing right now in the United States and the Subprime Mortgage crisis, that offered low rate loans for people who did not qualified in a regular lending system.

Fine print in the contracts suddenly popped up… Trapped in variable rates, debtors enjoyed a very low rate for the first years of their mortgages, under the market levels, to jump to higher levels.

People under this circumstances, can not easily adjust their income to pay for that, so many of them are losing their properties, other having a hard time to catch up. If it were isolated cases, nothing happens, but the more the cases, the problem got bigger, because the lenders foresaw a huge opportunity and sold the idea to foreign investors and offered securities abroad to get leverage.

That means a promise of paying back certain amount of money out of the interests charged to the debtors, but if the debtor can not pay and the property has to be re-sold to get the money back, to make the investment liquid, but there are more and more properties on sale and less access to new credits in the market, that means illiquidity, and the investors around the globe are now concerned about the future of their money.

The whole thing is looking like a recession that could affect the whole world, just because the United States is the largest market and everyone wants to sell anything to them.

Canada is showing some side effects of this crisis, either because some banks invested in the Subprime Market or because a lot of the Canadian economy is deeply linked to the US Economy, and if they are in troubles, Canada is in trouble. A simple example is the lay offs in the General Motors plant located in Oshawa.

Similar issues are presenting to companies in Asia and Europe, that’s why some central banks are stepping in trying to ease the conditions, tempering the possibility of a recession, which in spite of any effort seems inevitable.


* Mexican Journalist


ANGELES Y DEMONIOS

RIESGO DE RECESION
Por Sergio Granillo

Eran mediados de los años 80, examen de Contabilidad, antes de entregar un examen, la maestra revisó mis cálculos y me indicó un error básico: “la tierra nunca se deprecia”… A mediados de los 90’s un terreno de mi propiedad en un estado vacacional al sur de México, se devaluó al 25% de su valor.

Los mexicanos sabemos lo que son las crisis económicas. En 1995, el derrumbe del “Sueño Mexicano” creado por Carlos Salinas de Gortari, se convirtió en una pesadilla al día siguiente del cambio de poderes en el sexenio de Ernesto Zedillo.

Tras un periodo de abundancia generada por la apertura económica, la re-privatización de la banca, y la fantasía generalizada de bienestar, sostenida en una excesiva flexibilidad crediticia, vino la quiebra de todo el sistema bancario, de miles de empresas y la pérdida total del patrimonio de muchísimas familias; incluso, muchos suicidios.

La gente obtenía muy fácilmente tarjetas de crédito, préstamos para automóviles y casas, pero un día las tasas de interés se dispararon, y los pagos se duplicaron de un mes a otro; las opciones eran: pagas todo lo que nos debes ahora, pagas el doble al mes (pudiendo seguir aumentando) o nos quedamos con tus carros o tu casa. Así los bancos empezaron a apoderarse de muchas propiedades, mandando a la calle a miles y miles de familias, para luego empezar una reventa de propiedades, que empezaron a hundir el mercado de bienes raíces y de muchos otros productos. Cierres masivos de empresas y pérdidas de empleos.

Nadie podía pagar. Y los valores de las propiedades empezaron a caer, pues además no había en el mercado créditos; sólo las llamadas cajas populares o uniones de crédito, a tasas altísimas, dieron apoyo a algunas familias. Muchos otros se unieron a grupos de protesta antibancaria como El Barzón, paterfamilias acabaron en la cárcel por el sólo hecho de rebelarse contra la injusta ambición de los banqueros. Todos los bancos tuvieron que ser revendidos eventualmente, todos estaban quebrados.

Una historia muy parecida se está desarrollando ahora mismo en los Estados Unidos, empezando en el sector alternativo hipotecario, que atendía clientes que no calificaban para los créditos bancarios tradicionales.

Las letras pequeñas de los contratos salieron a la luz… Atrapados en tasas variables, los acreditados gozaron de tasas excesivamente bajas los primeros años de sus hipotecas, para luego ir por encima de las tasas del mercado. La mayoría de ellos está quedando imposibilitada a seguir pagando y la propiedad es tomada por la empresa financiera que a su vez está revendiendo esos bienes.

El problema toma dimensiones internacionales debido, primeramente, a que esas agencias financieras obtuvieron dinero sacando al mercado mundial acciones. Entonces, ahora que el cliente final no puede pagar, y que se tiene que usar la propiedad en garantía para cubrir la hipoteca y a su vez pagar a las personas (y empresas) que compraron esas acciones, no tienen fondos líquidos para hacerlo. Esas acciones, no tienen recursos que las avalen.

En los Estados Unidos, dos son ahora los problemas centrales, uno es la caía de los precios en el mercado de bienes raíces de vivienda, pues hay más oferta que demanda. El otro, la situación de toda la gente que tenía contratadas esas hipotecas y que está perdiendo sus propiedades, volviendo a rentar inmuebles, perdiendo ahorros y patrimonio… eso significa empobrecimiento.

Otro problema es que aquellos que han podido absorber el aumento en las tasas de intereses en este tipo de créditos hipotecarios, por supuesto, están dejando de comprar otros productos, pues sus ingresos no han aumentado.

Canadá ya empieza a resentir los efectos de lo que se vaticina una probable recesión económica mundial (incluso el ex jefe del Tesoro Norteamericano, Alan Greenspan, ya advertía de esto a principios de año). El despido masivo de empleados de la automotriz General Motors en Oshawa, se afirma, está ligado a esta contracción en las ventas en el mercado americano. Algunos bancos canadienses están registrando pérdidas accionarias, pues algunos de sus instrumentos forman parte de los títulos sacados a la venta por las financieras comprometidas en este problema.

Otras compañías en Europa y Asia están enfrentando el mismo problema, de ahí que los bancos centrales de naciones claves en la economía mundial han decidido inyectar recursos al mercado, para amortiguar este fenómeno que podría empeorar en los próximos meses.


* Periodista mexicano
(http://www.elcorreo.ca/ )

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