I have no words…..

City investment banks send Treasury £9m bill for advice on financial crisis by The Times

Francesc

Hi everyone

This video has been available in Youtube since November but I discovered today. It lasts around 15 minutes but it is worth every minute.

It perfectly describes why bank did what they did to brought us all to the current financial mess and what they are doing now.

This guys Bird & Fortune are sharp, brilliant and very funny.

I love british sense of humor

Francesc

Hi everyone

An update of the Financial crisis we are all suffering

Financial crisis update by Danske Bank
• The financial crisis has changed its focus away from fears of systemic risk in the financial sector and toward the economic consequences of the crisis. 

• For a long time the main issue for banks has been constrained access to funding markets. After a series of central bank and government initiatives, banks largely now have access to (short-term) funding. As the negative impact of the financial crisis is now being felt on the real economy, the focus has turned to the capitalisation levels of the banks.

• US dollar money markets have improved, but show little progress in Europe. We doubt that BOR-OIS spreads will show much improvement in euro terms until next year.

• The Fed continues to take drastic measures to combat the credit crisis. The escalation of quantitative easing with purchasing direct obligations of GSEs and mortgage-backed securities has caused a steep drop in US mortgage yields. This will probably cause a wave of refinancing and the US housing affordability index is heading for an all-time high.

• Emerging markets have been severely hit recently and more may be in the pipeline. Unwinding of carry and dwindling risk appetite is hitting the most imbalanced markets the hardest.

• The economic fallout from the crisis is increasing and the economic outlook appears very dire. A global recession is on the cards. We have the bulk of real economic losses (rather than the marked-to-market losses that have dominated so far) ahead of us, as unemployment and delinquencies surge higher.
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The financial crisis is changing its nature at the moment, away from fear of systemic risk attached to money and credit markets and toward emerging markets and the economic consequences of the financial crisis.

Money markets are very far from functioning properly, but the worst is probably over following a series of initiatives from governments and central banks worldwide. Getting money markets to function normally again is probably key longer term. Banks look able to raise capital following government guarantees easing the fear of a full-blown credit crunch.

The crisis has spread to global currency and equity markets as risk aversion is fuelling further deleveraging and forced selling. Global stock markets are down almost 50% from the in peak last autumn.

Emerging markets have been severely hit recently and more is probably in the pipeline. Unwinding of carry and dwindling risk appetite is hitting the most imbalanced markets - these markets include CEE, Russia, the Ukraine, Turkey and South Africa.

The economic fallout from the crisis is increasing and the economic outlook appears dire. A global recession is on the cards. We have the bulk of real economic losses (rather than the marked-to-market losses that have dominated so far) ahead of us as unemployment and delinquencies continue to climb higher.

Monitor: Financial crisis update

The G7 meeting seemed on the surface to be a disappointment as the overall G7 statement only presented general principles for action instead of specific measures. However, Euroland followed up on Sunday night presenting a coordinated plan which included a state guarantee on all bank loans through 2009 and money to recapitalise the banking system will be set aside. Country-specific plans are likely to be presented on Monday. The measures now being taken address both liquidity issues as well as solvency issues in the banking system. Bank guarantees should help to make money markets function again and a recapitalisation of banks will ensure that the major banks can continue their operations. These are very important steps in containing the crisis and ensuring that financial flows can again get to the real economy. It may very well take a while for both money markets and risk markets to recover but the measures now taken should work to provide a turning point in the financial crisis. Governments seem committed to take further measures if necessary.
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A very interesting interview indeed.

My friend  Ron Schelling, owner at www.2hedge.com sent it to me. Thanks Ron!

Bill Moyers Interview of George Soros - 10/10/2008
View George Soros Interview:
http://www.pbs.org/moyers/journal/10102008/watch.html

Read George Soros Interview:
http://www.2hedge.com/pdf/moyersoros.pdf

Francesc

Events over the past few days: The US House of Representatives on Friday voted yes to the Emergency Economic Stabilization Act (EESA) already approved by the Senate (for further details see Flash Comment - USA: Senate votes yes to revised plan, House to vote again on Friday and Flash Comment - USA: Deal struck but uncertainty has risen) including the Treasury’s Troubled Assets Relief Program (TARP), which can finally be put to work. The EESA gives the Treasury a maximum of 45 days to set up guidelines for TARP procedures, but we believe the Treasury will be ready to buy assets before the end of the 45 day limit.
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Worth to watch it

Do not like the example they use - black guy in Alabama - but they have a sharp sense of humour and describe very well what this mess is all about.

Francesc

http://www.fxstreet.com/fundamental/analysis-reports/special-coverage/2008-09-30.v02.html

Ufffff!!!

Things getting worse and worse

Total Global Financial Crisis - Danske Bank
Markets are in turmoil as the fallout from the financial crisis goes global and hits Euroland hard. Things went from bad to worse yesterday evening, when the House of Representatives rejected the USD 700bn bailout. The compromise bill had been hammered out by high level members of Congress over the weekend. While a bill is likely to be passed in some form, the rejection increases the risk that the final bill will be a watered-down version with a more limited healing effect on the financial system. In our view, developments in recent weeks have already caused damage to the real economy, as access to funding has been cut off.

The spill-over to Europe comes via a number of channels. The direct spill-over from US markets and rising global risk aversion is clear. Global growth prospects decline every day the crisis rages on, and confidence in banks around the globe is crashing. Distrust of the banking sector in Europe was already surging on the back of bailouts of Dexia, Hype Real Estate, Fortis, Glitnir and Bradford & Bingley, and just this morning Ireland rescued a number of banks – see more below.
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