Category: Credit Crisis 2008
The analysis published under this category are as follows.
Monday, April 21, 2008
The Next Credit Crisis Disaster Waiting to Happen / Stock-Markets / Credit Crisis 2008
By: Jennifer_Yousfi
In the first quarter, Goldman Sachs Group Inc. ( GS ) packed another $27 billion worth of illiquid assets onto its balance sheet - a 39% increase that brought the total to $96 billion.
And Goldman wasn't alone. Morgan Stanley ( MS ) reported that these hard-to-value/hard-to-sell assets soared 45%, reaching $32 billion. For Lehman Brothers Holdings Inc. ( LEH ), the first-quarter increase was $500 million, bringing its total to $42.5 billion.
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Monday, April 21, 2008
Bank of England Throws £50 billion of Tax Payers Money at the Banks / Interest-Rates / Credit Crisis 2008
By: Nadeem_Walayat
The credit crisis is forcing the Bank of England to morph the Collaterised
Mortgage Backed Securities Market into the Collaterised UK Government Bond Backed Mortgage Market. In effect the Bank of England is swapping 100% guaranteed Government Bonds for illiquid, un-priceable Mortgage backed junk securities. Thus allowing the banks to offer Government Bonds as security on the Interbank Market. Read full article... Read full article...
Friday, April 18, 2008
US Subprime Crisis Bottom, Bullish Stock Market and Gold as New Money / Stock-Markets / Credit Crisis 2008
By: John_Lee
I just returned from sunny Calgary where I spoke at the Cambridge Conference (See more details at my Travel Diary here: http://www.goldmau.com/content/diary/08-04-18.php). It is surprising to me how many gold analysts predict the complete of fallout of US housing and how that will crash the stock market, world growth and commodities.
Subprime Securities Firesale finished:
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Friday, April 18, 2008
Federal Reserve Notes Backed by Worthless Mortgage Bonds- Who Will Bail Out the Fed? / Interest-Rates / Credit Crisis 2008
By: Andy_Sutton
The silence has been deafening. Since that fateful weekend in the middle of March when they almost lost control, things have been eerily quiet. In fact, today, the DOW finds itself up over 200 points in the face of another $5 Billion in losses at Citigroup. The losses have been spun as positive with most in the financial press saying in essence that we should be happy because it could have been a lot worse. Many have now even boldly called a bottom in the losses stemming from the subprime mortgage crisis. Haven't we heard this before?
Friday, April 18, 2008
Government Interventions Tinkering with the Deleveraging Derivatives Monster / Stock-Markets / Credit Crisis 2008
By: Doug_Wakefield
Staying Alive - The size and frequency of the government's interventions into the markets, especially over the last month, has generated little coverage. Those articles that have addressed this seem to ignore its implications, concluding that the markets will chug along indefinitely. The only real surprise is that these comments have more frequently come from individuals who have written extensively of the morass in our financial system. How is it that so many take such historically profound information in stride? Why does most of the public not recognize the numerous warning signals the real world is giving to prepare for significant changes? Read full article... Read full article...
Friday, April 18, 2008
Structured Finance Lecture 1- The Alphabet Soup of the Credit Crisis / InvestorEducation / Credit Crisis 2008
By: Dr_Krassimir_Petrov
Introduces the alphabet soup (CDO, CMO, ABS, CLO, MBS, CDS, CBO, CPDO, LBO, MBO, CP, ABCP, etc.) of structured finance and other instruments that contributed to the current Credit Crisis. Read full article... Read full article...
Friday, April 18, 2008
LIBOR Sends Another Warning Signal to the Global Financial Markets / Interest-Rates / Credit Crisis 2008
By: Martin_Hutchinson
The news that the London Interbank Offer Rate (LIBOR) system of setting interest rates is running into trouble was surprising at first glance. It seems some banks are giving phony LIBOR quotations that don't reflect the true rates at which they accept deposits. In the perfect financial system, beloved of regulators and academics, this kind of discrepancy shouldn't happen.
In the real world it does, and I'll explain why.
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Thursday, April 17, 2008
Credit Crisis SCOOP- LIBOR Is Now Irrelevant to Derivatives Pricing / Interest-Rates / Credit Crisis 2008
By: Rob_Kirby
In the latest Office of the Comptroller of the Currency – Quarterly Derivatives Report [Q4/07], we learn that outstanding notionals for reporting banks declined by 8 Trillion. Furthermore, we are told that the overall decline was “driven by a 9.2 Trillion reduction in interest rate contracts – mostly swaps with maturities of less than one year .” Read full article... Read full article...
Wednesday, April 16, 2008
Bank of England Prepares to Ramp Up the Money Printing Presses / Interest-Rates / Credit Crisis 2008
By: Nadeem_Walayat
Gordon Brown having bottled out of an October 2007 election ahead of an economic slump during 2008 and 2009, is now attempting to prepare the ground works for an 2009-2010 election by giving the Bank of England the green light to print as much money as is necessary to enable the UK banks to restart lending to the consumer so as to prevent a multi-year housing bear market with accompanying recession that will ensure his election defeat.Read full article... Read full article...
Tuesday, April 15, 2008
Stein's Law- Mean Reversion Results in US Wealth Contraction / Stock-Markets / Credit Crisis 2008
By: John_Mauldin
This week we look at a remarkable and important essay by my friend Dr. Woody Brock who is one of my favorite "Outside the Box thinking" economists. I seriously look forward to Woody's quarterly insights and devour them as soon as the come in.
I especially urge you to read and re-read the first few paragraphs, and then think about what mean reversion will mean to US wealth growth, and to the developed world in general. This is a very important concept, and basic to economics, but one that has not had enough attention drawn to it. Coupled with high valuations, the headwinds facing traditional investments are getting stronger.
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Monday, April 14, 2008
How Safe is My FDIC-Insured Bank Account? / Personal_Finance / Credit Crisis 2008
By: Dr_Martenson
Your bank account may not be as safe as you think (or hope). Taking a deeper look at the legal details and the financial depth of the FDIC reveals several troubling details that call into question how the FDIC would fare during a true banking crisis.
The US is coming out of a period of unusually low banking stress and failures. Since it is typical human behavior to let one's guard down during tranquil periods, we might legitimately ask if this has happened with respect to the FDIC.
Monday, April 14, 2008
Central Banks' in Tatters- Facts are Stubborn Things Part II / Interest-Rates / Credit Crisis 2008
By: Joseph_Russo
The ALADDIN'S lamp of Central Banking coming FULL Circle - If one is inclined toward general agreement with the notion that the pinnacle of power in the world is the power to create money, - then one must hastily conclude that; the government-aligned private organizations of central banking cartels, whom fund all of the worlds imperial centers of power, – must then be held as the absolute mightiest of powers, whom preside at the highest seat of omnipotent influence over a vast array of interconnected relationships across the entire global landscape. Read full article... Read full article...
Monday, April 14, 2008
Central Banking- Why Fix What Does Not Work? / Interest-Rates / Credit Crisis 2008
By: Darryl_R_Schoon
Time of the Vulture - In times of expansion, it is to the hare the prizes go. Quick, risk taking, and bold, his qualities are exactly suited to the times. In periods of contraction, the tortoise is favored. Slow and conservative, quick only to retract his vulnerable head and neck, his is the wisest bet when the slow and sure is preferable to the quick and easy.
Every so often, however, there comes a time when neither the hare nor the tortoise is the victor. This is when both the bear and the bull have been vanquished, when the pastures upon which the bull once grazed are long gone and the bear's lair itself lies buried deep beneath the rubble of economic collapse.
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Sunday, April 13, 2008
Save the US Economy and Rekindle Democracy by Giving the Workers a Raise / Economics / Credit Crisis 2008
By: Mike_Whitney
“ The bright new financial system, with all its talented participants, with all its rich rewards, has failed the test of the marketplace. " Former Fed Chief, Paul Volcker
A specter is haunting Wall Street---the specter of insolvency. One major player, Bear Stearns, has already gone under, and from the looks of it, another may be on the way. It's getting ugly out there. The so-called TED spread---which measures the willingness of banks to lend to each other---has begun to widen ominously suggesting that the money markets believe another body will be floating to the surface any day now.
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Saturday, April 12, 2008
Interbank Market Fails to Respond to UK Interest Rate Cut / Interest-Rates / Credit Crisis 2008
By: Nadeem_Walayat
Following Thursdays UK interest rate cut to 5% from 5.25%, which followed unprecedented action by the Bank of England in providing £15 billion in liquidity to the UK banking system in recent weeks. So far the interbank market has failed to respond to these actions, which saw the 3 Month Libor rate / base rate spread expand to recent credit crunch extremes as illustrated by the below graph.Read full article... Read full article...
Saturday, April 12, 2008
Addressing the Cause and Effect of the Credit Crisis, Legislating Denial- Part1 / Politics / Credit Crisis 2008
By: Joseph_Russo
Part I- Legislating Denial or Sweeping Change for Better or Worse
Part II- Central Bank Insolvency Crisis – winding down a 300-year Paradigm of Failure & Deceit
Part III– Market Update – TA in Full Command - Trading Profitably No Matter Who's Controlling the Markets
Part I - Legislating Denial or Substance
It is quite true that modern society as we know it cannot exist without a sound financial system. However, it may be vehemently argued that a free -modern society cannot exist within a systemically corrupt financial system.
Saturday, April 12, 2008
Credit Crisis Spreads Beyond Banks Hitting Corporate Earnings / Stock-Markets / Credit Crisis 2008
By: Anthony_Cherniawski
Is the consumer “all done in?” - ( Bloomberg ) The Reuters/University of Michigan preliminary index of consumer sentiment decreased to 63.2 this month, the weakest level since 1982, when the jobless rate approached 11 percent, the worst since the Great Depression. In other figures released today, the Labor Department reported that the cost of imported goods climbed 14.8 percent in March from a year ago, led by oil.
``The consumer's feeling increasingly hemmed in,'' said Brian Bethune , director of financial economics at Global Insight Inc. in Lexington , Massachusetts . ``They've got higher energy bills, higher gasoline bills, higher food bills and obviously the employment markets are nowhere near as strong as they were.''
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Saturday, April 12, 2008
G7 Income Collapse as Credit Crisis Moves from Wall Street to Main Street / Economics / Credit Crisis 2008
By: Ty_Andros
Wowee, things sure are unfolding quickly. Volatility is front and center as confusion reigns supreme in the broad investing public, driving them all over the place except to where they should be focusing. “Volatility is opportunity” and it is abundant, providing prepared investors with gargantuan opportunities. If you are not benefiting from it, “do more homework” or find a new advisor who does. The bear market in PAPER assets, or those underpinned by them, are in full retreat creating GIANT “fingers of instability” (see Tedbits archives at www.TraderView.com ) which provide opportunities for astute investors. Read full article... Read full article...
Friday, April 11, 2008
Is there anything the US Federal Reserve WON'T do? / Interest-Rates / Credit Crisis 2008
By: Money_and_Markets
That's the question I'm asking myself here as I watch it go further and further down the "extreme activism" road.
As I've pointed out, it's not just the Fed, either. Congress and the Bush administration are stepping up their plans to intervene and support the housing and mortgage markets, too.
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Friday, April 11, 2008
Is an International Financial Conspiracy Driving World Events? / Politics / Credit Crisis 2008
By: Richard_C_Cook
"They make a desolation and call it peace." -Tacitus
Was Alan Greenspan really as dumb as he looks in creating the late housing bubble that threatens to bring the entire Western debt-based economy crashing down?
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