월스트리트저널 읽기 - IPO Market, Real - Estate, Japanese Stocks etc.

MONDAY, SEPTEMBER 25, 2023

 

◈ IPO Market Shows Signs of Life for Now(기업공개 시장이 일단 활기를 띠다)

 

 

The initial public offering market has felt surprisingly normal over the past two weeks, at least on the surface.

 

British chip designer Arm Holdings brought fish and chips—and a makeshift British pub—to Nasdaq’s Times Square headquarters to celebrate its stock-market debut this month. Last Tuesday, executives and employees gathered at grocery-delivery company Instacart ’s San Francisco headquarters to ring in the first day of trading with a carrot-shaped bell. The next day, the floor of the New York Stock Exchange welcomed Klaviyo executives and backers to the podium to cheer on the marketing-automation platform’s IPO.

 

These three marquee listings represented the chance to revitalize an IPO market that has long been in disrepair. The results, though, have been inconclusive.

 

◈ Real - Estate Bust Plays Out On the San Francisco Streets(샌프란시스코 거리에 부동산 폭락이 일어나다)

 

As it rolls toward downtown San Francisco, the California Street cable car passes the gothic Grace Cathedral and an 8-foot tall statue of Tony Bennett. Then riders start to see the city’s newest landmarks.

 

Among them is 650 California Street, a 34-story office building that has defaulted on its mortgage.

 

Further on is 101 California, whose second-biggest tenant left last year and whose biggest is slashing staff and office space.

 

Go around the corner and Embarcadero Square is for sale for $90 million. Its owner bought it for $245 million in 2018.

 

Walk down Market Street, and you will hit San Francisco Centre, the city’s largest mall. An owner’s name was pried off the wall when it stopped loan payments, but traces of the logo remain. Last month the retailer Nordstrom closed its five-story flagship store there.

 

San Francisco’s downtown properties were some of the most valuable in the country. Buyers loaded up on debt to get a piece of the booming city.

 

◈ Japanese Stocks Aren't Popular at Home(일본 주식은 국내에서 인기가 없다)

 

 

TOKYO—Japan’s government is on a mission to make buying stocks hot again.

 

Many of America’s biggest investors are bullish on Japan. Warren Buffett shared that he increased his investments in Japanese companies during an April visit to the country. Ken Griffin is preparing to reopen an office in Tokyo for his hedge fund, Citadel, and investment banks Goldman Sachs and Morgan Stanley have issued optimistic outlooks for Japan’s stock market.

 

Japan’s problem is that there are few signs its estimated 125 million residents share in the excitement.

 

Burned by dismal returns since the bursting of Japan’s asset bubble in the late 1980s and early 1990s, generations of families here have stashed most of their money in low-yielding savings accounts rather than try to increase their wealth through the stock market.

 

Japanese households put an average of just 11% of their savings into stocks and 54% in cash and bank deposits, according to Bank of Japan data released last month. That trails well behind the U.S., where households have about 39% of their money tied up in the market and only 13% in cash and bank deposits, according to Federal Reserve data.

 

◈ How the 'Fed Put' Saved the Stock Market(미국 연방준비제도(Fed)가 주식시장을 구한 방법)

 

 

Before there was Silicon Valley Bank or Lehman Brothers or the housing meltdown, Long-Term Capital Management set the tone for every crisis that would come after it.

 

The hedge fund, with its dream team of finance luminaries, including Nobel Prize winners, thought it had found a way to make a bundle with what seemed like hardly any risk. The banks that lent it tens of billions of dollars believed them. When the fund’s strategy fell apart, Federal Reserve officials coordinated an unprecedented rescue and cut interest rates in a bid to shore up a falling stock market. Even 25 years later, the effects are with us. If there was a time the “Fed put” was born, it was during the LTCM crisis.

 

The basic idea: By cutting rates in response to a drop in the stock market, the Fed had in effect provided investors with something similar to a put option, an instrument used by traders to insure against losses. Moreover, because the Fed was slow to raise rates again even as stocks surged, it was as though that put kept getting repriced higher, giving investors a pass to take on risks they wouldn’t otherwise stomach.

 

Other episodes followed, such as the rate cuts following the dotcom bust, and the cuts and enormous liquidity infusions that came following the 2008 financial crisis. Now maybe—just maybe—the Fed is weaning the market off of Fedput thinking. It has only taken a quarter century.

 

The Fed’s first rate cut in 1998 came on Sept. 29, just six days after the Federal Reserve Bank of New York helped arrange a $3.5 billion bailout of LTCM by a consortium of financial firms. Judging from economic reports from the time, the cut didn’t make much sense. The reports showed that the job market was strong and that Americans’ incomes and spending were growing robustly.

 

But stocks had taken a mighty tumble. At the end of August, the S& P 500 was down 19% from the record it had logged in mid-July, and even though words from Fed Chairman Alan Greenspan had helped soothe markets somewhat since then, the index was still down 12% from its peak. The central bank saw this as a big problem, not so much because it viewed stocks as forecasting trouble for the economy, but rather because it worried about what the selloff could do to the economy.

 

◈  Emerging Markets Burn Investors decades After LTCM(LTCM 이후 수십 년 만에 신흥 시장이 투자자들을 불태운다)

 

 

Emerging markets are in a much better place now than when Russian bonds sank Long-Term Capital Management a quarter-century ago. Emerging-markets investments, not so much.

 

Buying the local debt of developing- country governments and hedging out the foreign-exchange risk was among the most famous quantitative strategies deployed by LTCM. Although the 1990s were a period of constant currency crises— the Mexican “Tequila Crisis” in 1994, the Asian financial crisis in 1997—investors kept pouring money into emerging markets.

 

It all unraveled when Russia defaulted on its ruble debt in August 1998. Collecting on hedges became impossible when counterparty banks shut down and the government froze ruble trading. What eventually spelled the end of John Meriwether’s hedge fund, though, was a flight to liquid assets that toppled other leveraged trades.

 

오늘도 경제신문으로 세상을 봅니다.

 

2023.09.24 - [경제신문 읽기] - 월스트리트저널 읽기 - Economy, S&P 500, Higher Rates etc.

월스트리트저널 읽기 - Economy, S&P 500, Higher Rates etc.