Finding default What isn't known about bad debts

[2008.01.17] Finding default 查明违约 关于坏账我们不知道什么

Buttonwood
梧桐树下/金融市场

Finding default
查明违约 关于坏账我们不知道什么
Jan17th 2008
FromThe Economist print edition

Whatisn't known about bad debts
关于坏账我们不知道什么

WHENthe American housing market turned, subprime borrowers started defaulting. Theresult was some nasty surprises for investors who had bought “structured”products that were exposed, in complex ways, to those housing loans. Now theoverall American economy is flirting with recession, are similar surprisesawaiting investors who have bought other types of consumer and corporate debt?
当美国房市转向，次贷借款人开始违约。对那些已购买“结构”产品的投资者来说，该产品以复杂的方式处于这些房贷的影响之下，结果是有点大为意外。现在美国经济总体上不认真对待衰退，类似的意外是否在等候那些已购买其他形式的消费者和公司债务的投资者？

Thebest way to answer the question is to borrow Donald Rumsfeld's famousepistemological definitions. Defaults and delinquencies are known to be rising:companies like Citigroup and American Express have said so. But, given thatconsumer debts are high relative to GDP and that American house prices arefalling nationwide for the first time since the second world war, might thelevel of bad debts be higher in this cycle? This can be classed as a “knownunknown”.

回答这个问题的最好方式是借用唐纳德.拉姆斯菲尔德的著名认识论定义。违约和拖欠贷款会增加，对此我们是知道的：花旗和美国运通之类的公司已说过。但考虑到消费者债务相对于GDP是高的，美国房价在二战后第一次出现全国性的下跌，在这个周期里，坏债的水平可能更高？这可归入“我们知道自己不知道（known unknown）”。

Whathappened in the subprime market was more of an “unknown unknown”. There wereseveral layers of middlemen between investors and house-buyers, most of whomhad an incentive to overstate either house prices or a borrower's ability torepay. The effect was that mortgage-backed securities were less diversifiedthan investors thought, since they were all exposed to the same risk—laxlending practices. That in turn was a problem when those bonds were carved upinto collateralised-debt obligations, or CDOs: the risk of default affected thesenior tranches of those products as well as the most junior.

次贷市场发生了什么，更多的是“我们不知道自己不知道（unknown unknown）”。在投资者和房子购买者之间有多层的中间人，多数人存在要么夸大房价、要么夸大借款者偿还能力的动机。其影响是以抵押贷款为基础的证券比投资者所想的要较少多元化。接着，当这些债券被划分进入债务抵押债券或CDOS时：债务拖欠的风险影响这些产品的高级以及低级部分时，问题出现了。

Expertsgenerally agree that the same problems should not occur in other parts of thedebt markets. There has already been a consolidation into a limited number ofexperienced lenders in markets such as credit cards and auto loans. Thoselenders are able to look back at consumer behaviour over several economiccycles for a reference point.

专家们大体同意一样的问题不会出现在债务市场的其他部分。在银行卡和汽车贷款等市场，为数有限经验丰富的贷款人变得更安全。这些贷款人可以往回看几个经济周期内的消费者行为，以作为参考。

Moreover,other consumer-debt products are less complex than subprime. For example, thereis no real “reset” problem outside the residential-mortgage market. Subprimeborrowers were attracted by teaser loans, which offered low interest rates inthe first two years, jumping sharply over the rest of the loan. As those teaserrates end, and without the possibility of refinancing, default rates areexpected to rise further this year.

此外，其他消费者债务产品比次贷更为简单。例如，在住宅抵押贷款市场之外，没有真正的“重设”问题。次贷借款人为大伤脑筋的贷款所吸引，在前两年利息率低，在贷款的其余时间急剧跳升。当这些棘手的利率终止，并且不可能重新融资，违约率预计今年将进一步上升。

Creditcards have been subject to some unusual influences over the past two years, butthe result has been historically low, rather than high, default rates. Theexplanation lies in a change in the American bankruptcy law in October 2005,which made going bust less attractive for borrowers. The result was a sharprise in bankruptcies (and credit-card defaults) before the change came intoeffect, and an ever sharper fall thereafter. More than 600,000 Americans filedfor bankruptcy in the fourth quarter of 2005, but barely 100,000 did so in thefirst three months of 2006. Since then credit-card delinquency rates have beenrising steadily but remain well below the historic average.

在过去两年，银行卡受到一些异常影响，但违约率在历史上算是低的，而不是高的。解释出在2005年10月美国破产法的变更，这让借款人进入破产变得更不诱人。结果是在变更生效前，破产急剧上升，并且之后更大地下降。2005年第四季度，超过60万的美国人提出破产，但在2006年前三个月只有10万。自那以后，银行卡违约率稳定增长，但很好地保持在历史平均水平之下。

Ofcourse, worries about these other parts of the debt market remain. In recentyears struggling consumers have been able to consolidate their credit-carddebts into their mortgage loans; that option is no longer open. Will thataffect default rates? And car companies have relied on cheap financing rates tomaintain sales. Has that led to a decline in lending standards?

当然，对债务市场的这些其他部分的担忧继续存在。近年来，挣扎的消费者们已能够把他们的银行卡债务合并到抵押贷款中；此选项现在不再开放。这会影响违约率吗？汽车公司已依赖这些低廉的资金率来保持销售。这已导致借款标准的下降？

Thenthere is the corporate-loan market. Early last year the use of “covenant-lite”loans was a sign of the growing power of borrowers. In the past lenders ofteninsisted on financial covenants when companies took out loans; breach of thosecovenants gave the lenders the right to take action. The idea was to spot troubledcompanies at an early stage of their decline, so that creditors had more hopeof getting their money back. Covenant-lite loans removed some of thosesafeguards, creating the risk that default, when it occurred, would be morepainful for creditors.

然后是公司贷款市场。前些年的早期，“低门槛”贷款（covenant-lite） 的使用是借款人权力增长的标志。在过去，当公司借入贷款，贷款人经常坚持金融合同；对这些合同的违反会让贷款人有权采取行动。想法是在公司衰退的早期阶段 就识别出扰乱的公司，因此债权人有更大的希望将他们的钱拿回。低门槛贷款除去了这些安全保障的一部分，造成当违约发生，其风险对债权人来说更为痛苦。

Itmay turn out that way, but it is rather too early to tell. Even relativelydodgy borrowers take time to run through their money and come back to themarket; Standard & Poor's, a rating agency, says that although more peoplewill have to seek refinancing this year, the real peak will not occur until2011-14.

它可能转向这种方式，但现在无法过早断定。即使相对诡诈的借款人也需要时间，通过他们的钱运营，再返回市场；评级机构标准普尔认为尽管更多的人今年将不得不寻求重新融资，但真正的高峰在2011到2014年才会出现。

Moody's,another rating agency, says it was less worried by the absence of covenantslast year than by the more aggressive use of borrowed money (in particular,bank debt) in private-equity deals. A severe downturn in the economy that ateinto business profits would be bad for such companies. But that risk is alsowell known: severe economic downturns were causing debt crises long beforebankers learned to spell CDO.

另一家评级机构穆迪认为比去年合同的缺乏更值得担忧的是，借入金钱（尤其是银行债务）在私人股本交易的更过度自信地使用。经济的一个严重低迷时期，耗费了企业利润，这个时期对此类公司是糟糕的。但风险也是充分可知（well known）的：在银行家们学会拼写CDO的很长时间之前，经济的严重低迷就造成了债务危机。

查明违约 关于坏账我们不知道什么

[2008.01.17] Finding default 查明违约 关于坏账我们不知道什么

Buttonwood
梧桐树下/金融市场

Finding default
查明违约 关于坏账我们不知道什么
Jan17th 2008
FromThe Economist print edition

Whatisn't known about bad debts
关于坏账我们不知道什么

WHENthe American housing market turned, subprime borrowers started defaulting. Theresult was some nasty surprises for investors who had bought “structured”products that were exposed, in complex ways, to those housing loans. Now theoverall American economy is flirting with recession, are similar surprisesawaiting investors who have bought other types of consumer and corporate debt?
当美国房市转向，次贷借款人开始违约。对那些已购买“结构”产品的投资者来说，该产品以复杂的方式处于这些房贷的影响之下，结果是有点大为意外。现在美国经济总体上不认真对待衰退，类似的意外是否在等候那些已购买其他形式的消费者和公司债务的投资者？

Thebest way to answer the question is to borrow Donald Rumsfeld's famousepistemological definitions. Defaults and delinquencies are known to be rising:companies like Citigroup and American Express have said so. But, given thatconsumer debts are high relative to GDP and that American house prices arefalling nationwide for the first time since the second world war, might thelevel of bad debts be higher in this cycle? This can be classed as a “knownunknown”.

回答这个问题的最好方式是借用唐纳德.拉姆斯菲尔德的著名认识论定义。违约和拖欠贷款会增加，对此我们是知道的：花旗和美国运通之类的公司已说过。但考虑到消费者债务相对于GDP是高的，美国房价在二战后第一次出现全国性的下跌，在这个周期里，坏债的水平可能更高？这可归入“我们知道自己不知道（known unknown）”。

Whathappened in the subprime market was more of an “unknown unknown”. There wereseveral layers of middlemen between investors and house-buyers, most of whomhad an incentive to overstate either house prices or a borrower's ability torepay. The effect was that mortgage-backed securities were less diversifiedthan investors thought, since they were all exposed to the same risk—laxlending practices. That in turn was a problem when those bonds were carved upinto collateralised-debt obligations, or CDOs: the risk of default affected thesenior tranches of those products as well as the most junior.

次贷市场发生了什么，更多的是“我们不知道自己不知道（unknown unknown）”。在投资者和房子购买者之间有多层的中间人，多数人存在要么夸大房价、要么夸大借款者偿还能力的动机。其影响是以抵押贷款为基础的证券比投资者所想的要较少多元化。接着，当这些债券被划分进入债务抵押债券或CDOS时：债务拖欠的风险影响这些产品的高级以及低级部分时，问题出现了。

Expertsgenerally agree that the same problems should not occur in other parts of thedebt markets. There has already been a consolidation into a limited number ofexperienced lenders in markets such as credit cards and auto loans. Thoselenders are able to look back at consumer behaviour over several economiccycles for a reference point.

专家们大体同意一样的问题不会出现在债务市场的其他部分。在银行卡和汽车贷款等市场，为数有限经验丰富的贷款人变得更安全。这些贷款人可以往回看几个经济周期内的消费者行为，以作为参考。

Moreover,other consumer-debt products are less complex than subprime. For example, thereis no real “reset” problem outside the residential-mortgage market. Subprimeborrowers were attracted by teaser loans, which offered low interest rates inthe first two years, jumping sharply over the rest of the loan. As those teaserrates end, and without the possibility of refinancing, default rates areexpected to rise further this year.

此外，其他消费者债务产品比次贷更为简单。例如，在住宅抵押贷款市场之外，没有真正的“重设”问题。次贷借款人为大伤脑筋的贷款所吸引，在前两年利息率低，在贷款的其余时间急剧跳升。当这些棘手的利率终止，并且不可能重新融资，违约率预计今年将进一步上升。

Creditcards have been subject to some unusual influences over the past two years, butthe result has been historically low, rather than high, default rates. Theexplanation lies in a change in the American bankruptcy law in October 2005,which made going bust less attractive for borrowers. The result was a sharprise in bankruptcies (and credit-card defaults) before the change came intoeffect, and an ever sharper fall thereafter. More than 600,000 Americans filedfor bankruptcy in the fourth quarter of 2005, but barely 100,000 did so in thefirst three months of 2006. Since then credit-card delinquency rates have beenrising steadily but remain well below the historic average.

在过去两年，银行卡受到一些异常影响，但违约率在历史上算是低的，而不是高的。解释出在2005年10月美国破产法的变更，这让借款人进入破产变得更不诱人。结果是在变更生效前，破产急剧上升，并且之后更大地下降。2005年第四季度，超过60万的美国人提出破产，但在2006年前三个月只有10万。自那以后，银行卡违约率稳定增长，但很好地保持在历史平均水平之下。

Ofcourse, worries about these other parts of the debt market remain. In recentyears struggling consumers have been able to consolidate their credit-carddebts into their mortgage loans; that option is no longer open. Will thataffect default rates? And car companies have relied on cheap financing rates tomaintain sales. Has that led to a decline in lending standards?

当然，对债务市场的这些其他部分的担忧继续存在。近年来，挣扎的消费者们已能够把他们的银行卡债务合并到抵押贷款中；此选项现在不再开放。这会影响违约率吗？汽车公司已依赖这些低廉的资金率来保持销售。这已导致借款标准的下降？

Thenthere is the corporate-loan market. Early last year the use of “covenant-lite”loans was a sign of the growing power of borrowers. In the past lenders ofteninsisted on financial covenants when companies took out loans; breach of thosecovenants gave the lenders the right to take action. The idea was to spot troubledcompanies at an early stage of their decline, so that creditors had more hopeof getting their money back. Covenant-lite loans removed some of thosesafeguards, creating the risk that default, when it occurred, would be morepainful for creditors.

然后是公司贷款市场。前些年的早期，“低门槛”贷款（covenant-lite） 的使用是借款人权力增长的标志。在过去，当公司借入贷款，贷款人经常坚持金融合同；对这些合同的违反会让贷款人有权采取行动。想法是在公司衰退的早期阶段 就识别出扰乱的公司，因此债权人有更大的希望将他们的钱拿回。低门槛贷款除去了这些安全保障的一部分，造成当违约发生，其风险对债权人来说更为痛苦。

Itmay turn out that way, but it is rather too early to tell. Even relativelydodgy borrowers take time to run through their money and come back to themarket; Standard & Poor's, a rating agency, says that although more peoplewill have to seek refinancing this year, the real peak will not occur until2011-14.

它可能转向这种方式，但现在无法过早断定。即使相对诡诈的借款人也需要时间，通过他们的钱运营，再返回市场；评级机构标准普尔认为尽管更多的人今年将不得不寻求重新融资，但真正的高峰在2011到2014年才会出现。

Moody's,another rating agency, says it was less worried by the absence of covenantslast year than by the more aggressive use of borrowed money (in particular,bank debt) in private-equity deals. A severe downturn in the economy that ateinto business profits would be bad for such companies. But that risk is alsowell known: severe economic downturns were causing debt crises long beforebankers learned to spell CDO.

另一家评级机构穆迪认为比去年合同的缺乏更值得担忧的是，借入金钱（尤其是银行债务）在私人股本交易的更过度自信地使用。经济的一个严重低迷时期，耗费了企业利润，这个时期对此类公司是糟糕的。但风险也是充分可知（well known）的：在银行家们学会拼写CDO的很长时间之前，经济的严重低迷就造成了债务危机。