October 2008 Economic Phenomena

[sharon sanders]

September thread here.

Money-Market Rates Climb as Banks Hoard Cash, Crisis Deepens

By Gavin Finch and Lukanyo Mnyanda
Oct. 6 (Bloomberg) -- Money-market rates climbed worldwide as banks hoarded cash on speculation the seizure in credit markets is deepening and may prompt more financial institutions to collapse.
The London interbank offered rate, or Libor, that banks charge each other for overnight dollar loans rose 37 basis points to 2.37 percent today, the British Bankers' Association said. The three-month rate stayed near the highest level since January. Asian rates increased and the Libor-OIS spread, a gauge of cash scarcity among banks, held near a record.
``The situation remains very tight and we probably need more action from central banks,'' said Cyril Beuzit, head of interest-rate strategy in London at BNP Paribas SA. ``There's a strong will from governments to get on top of the situation, but for the moment it hasn't worked. We're still left in a risk- averse environment.''
Interbank rates have jumped as banks store cash to meet anticipated funding needs after governments in Europe and the U.S. acted to prevent the collapse of six financial institutions in the past two weeks. The Libor-OIS spread, the difference between the three-month dollar rate and the overnight indexed swap rate, rose to 298 basis points today, before retreating to 291 basis points. It was at 129 basis points two weeks ago and 81 basis points a month ago.
BNP Paribas, France's biggest bank, agreed to take control of Fortis in Belgium and Luxembourg, completing a breakup of the lender after a government rescue failed. UniCredit SpA Chief Executive Officer Alessandro Profumo said Italy's biggest bank underestimated the severity of the global financial crisis, forcing him to cut profit forecasts and propose raising capital.


U.S. Bailout
The Federal Reserve will double its auctions of cash to banks to as much as $900 billion and is considering further steps, the central bank said today in a statement. The Fed will increase its auctions under the 28-day and 84-day Term Auction Facility operations to $150 billion each. The two forward TAF auctions in November will be increased to $150 billion each. The central bank will also begin paying interest on bank reserves.
President George W. Bush signed a $700 billion U.S. bailout bill into law last week to help stem the crisis, which has claimed financial companies including Bear Stearns Cos. and Lehman Brothers Holdings Inc. The legislation enables the government to purchase tainted assets from institutions. European leaders meeting in Paris two days ago pledged to bail out their own nations' banks, while stopping short of a regional rescue effort.


Ted Spread
Yields on overnight U.S. commercial paper jumped 0.94 percentage point to 3.68 percent, according to data compiled by Bloomberg that date back to January 1996. That's the highest since Sept. 30, the day after the U.S. House of Representatives rejected an earlier version of the bank-rescue plan. Companies sell commercial paper, which matures in nine months or less, to help pay for day-to-day expenses such as payroll and rent.
The difference between what banks and the Treasury pay to borrow money for three months, the so-called TED spread, widened today to 393 basis points, the most since Bloomberg began compiling the data in 1984, before falling back to 390 after the Fed TAF statement. Writedowns and losses worldwide tied to the U.S. mortgage market have reached $585 billion since the start of last year, according to data compiled by Bloomberg.


Conditions `Very Tight'
Banks borrowed the most since February 2001 from the European Central Bank at its emergency rate as the credit crunch worsened. Financial institutions borrowed 24.6 billion euros ($33.4 billion) for overnight on Oct. 3 at the central bank's marginal lending rate of 5.25 percent, which is one percentage point above its benchmark rate. At the same time, banks deposited 38.9 billion euros with the ECB, the Frankfurt-based central bank said in a statement today. The deposit rate is 3.25 percent.
``Money-market conditions will continue to be very tight and this will not improve in the short term,'' said Dwyfor Evans, a foreign-exchange strategist at State Street Global Markets in Hong Kong. ``There's an absence of trust.''
The increase in the overnight dollar Libor was the first in four days. The three-month rate was within 4 basis points of the highest since Jan. 10.
The euro interbank offered rate, or Euribor, for three- month euro loans advanced 1 basis point to 5.35 percent today, a seventh straight all-time high, European Banking Federation data showed. The Euribor for one-month loans in euros advanced 2 basis points to 5.15 percent today, reaching a record for a fifth day, according to the EBF.


Asia Rates
Government bonds around the world climbed as stocks slid, driving investors to the safest assets. U.S. Treasuries rose for a fourth day, sending two-year notes to their longest winning streak in six weeks, and gains for German two-year notes drove yields to their lowest levels since March. Japanese 10-year bonds advanced for a second day.
The MSCI World Index, a global equity benchmark, dropped for a third consecutive day, falling 6.7 percent to its lowest level since November 2004.
Hong Kong's three-month interbank offered rate, or Hibor, increased 4 basis points to 3.85 percent, the highest since Dec. 10. The corresponding rate in Tokyo held at a nine-month high.
Philippine money-market rates rose for a third day. The one-month interbank rate climbed to 5.125 percent, according to the Bankers Association of the Philippines.
``Philippine banks are liquid but they still want to borrow for safety so they'd have enough in case the crisis continues,'' said Marcelo Ayes, senior vice president for Treasury at Rizal Commercial Banking Corp. in Manila.
Borrowing costs between banks in Singapore fell today, with the benchmark three-month rate for dollar loans easing more than 3 basis points to 4.23 percent, according to the Association of Banks in Singapore.
``Euro and dollar funding has shot up due to the bank failures in those places,'' said Irene Cheung, a currency strategist at ABN Amro Bank NV in Singapore. ``Asia's situation is not so scary.''
The Bank of Japan added 1 trillion yen ($9.7 billion) to the financial system. Australia is closed for a public holiday.



http://www.bloomberg.com/apps/news?pid=20601009&sid=aA1JyufIMExE&refer=bonds

 

[sharon sanders]

Re: October 2008 Economic Phenomena

World stock markets plunge on crisis fears

By CARLO PIOVANO ? 4 hours ago


LONDON (AP) ? Stock markets slumped worldwide Monday, some marking record one-day drops, on fears the global financial crisis will worsen and hit the wider economy despite bank bailouts in the U.S. and Europe.
Stocks began their nosedive in Asia, where investors found little comfort from Washington's approval on Friday of a $700 billion bank rescue plan. Doubts over the degree to which the plan could help thaw frozen lending markets and recapitalize banks caused financial stocks to plummet and drag down major indexes.
European shares then shot lower on the open, with some suffering the heaviest losses in their history. More bank bailouts over the weekend underscored the fact that Europe has now moved into the eye of the credit crisis storm with European policymakers so far unwilling to come up with a common rescue plan.
Later in the day, Latin America stock markets joined the global bloodletting, while oil prices also fell below $90 a barrel on expectations that world economic growth will suffer and hurt demand for crude.
In the U.S., the Dow Jones industrial average fell below the 10,000 mark for the first time since 2004, closing off 369.88 points, or 3.6 percent, at 9955.50.
Britain's benchmark stock index FTSE 100 lost 391.06 points to close at 4589.19 ? a 7.85 percent fall. The declines were led by the banking industry, with the mining and oil industries also suffering drops. HBOS PLC's share price slumped 17.21 percent, while the Royal Bank of Scotland Group PLC fell 20.46 percent.
Germany's DAX index dropped 7.07 percent to close at 5,387.01, while France's CAC-40 index suffered its worst day since its creation in 1988, dropping 9.04 percent to 3,711.98. The Irish Stock Exchange was among the worst hit in Europe, plummeting 9.6 percent to close at 3,565.
In Russia, where trading was suspended because of excess volatility, the MICEX also suffered its largest one-day drop ever, falling 18.66 percent at 752.00. A separate Russian stock index, the RTS, fell 19.10 percent.
Iceland's exchange opened but was then shut down, as the government rushed to draft a plan to deal with the financial turmoil's impact on its over-leveraged banking sector. Government officials later said it would guarantee all domestic savings deposits, but failed to provide a more comprehensive plan for its banking sector.
As governments came under pressure to calm the public's fear over deposit savings, Germany, Austria and Denmark joined Greece, France and Ireland in making commitment of varying clarity to guarantee all private deposits, while Sweden doubled the amount it would insure.
At the same time, the governments of Germany and Belgium made last-ditch efforts to bail out ailing banks. Germany agreed a 50 billion euro ($68 billion) package to bail out Hypo Real Estate, the country's second-biggest commercial property lender, after a rescue plan by private lenders fell apart. In Belgium, the government managed to get French bank BNP Paribas SA to buy a 75 percent stake in troubled lender Fortis NV.
But as the rate of bank rescue deals intensified, Europe showed few signs of being able to work together on a common solution, all of which unnerved markets. An economic summit of European leaders over the weekend failed to produce any concrete plan, and the continent's governments were instead separately taking steps to guarantee the safety of their respective financial systems.
A two-day meeting of finance ministers in Luxembourg started today, but officials in Germany and elsewhere have spoken out against the idea of a U.S.-style bailout fund for all of Europe.
European Central Bank President Jean-Claude Trichet said Monday in Luxembourg he thinks jittery financial markets are overestimating risks.
Across Asia, all markets closed in the red. Tokyo's Nikkei 225 index fell to its lowest level in 4 1/2 years, sinking 4.25 percent to 10,473.09.
Hong Kong's Hang Seng index slid 5 percent to 16,803.76. Markets in mainland China, Australia, South Korea, India, Singapore and Thailand also dropped sharply. Indonesia's key index plummeted 10 percent, its biggest one-day drop ever, while the benchmark Shanghai Composite Index sank 3.7 percent to 2,293.78.
Banks and other financial shares saw heavy declines. Shares of Ping An Insurance Co. rose even after it said Monday it will record a $2.3 billion loss on its stake in European bank Fortis in the biggest blow yet to a Chinese institution from the global credit crisis. Ping An's shares rose 0.4 percent.
"This credit crunch looks like it's not going away any time soon," said Alex Tang, head of research at brokerage Core Pacific-Yamaichi in Hong Kong. "Apart from a credit crunch in Europe, investors are quite concerned about the worsening outlook on the U.S. economy."
Figures released Friday showed that 159,000 jobs in the U.S. were lost last month, the fastest pace in more than five years.
Such concerns overshadowed any investor optimism over the U.S. House of Representatives' approval Friday of a massive bailout plan that will allow the U.S. government to buy distressed mortgages and securities backed by mortgages from banks and other financial institutions.
Investors questioned how long it would take for the package to unfreeze credit markets, restore bank lending and generally shore up the U.S. economy.
"The market had already figured in the package's passage," said Yukio Takahashi at Shinko Securities Co. in Tokyo. "There are strong doubts about its implementation."
Latin American stocks also plunged also Monday, led by a stunning 15 percent intraday drop in Brazilian shares, on concern a major economic slowdown would devastate the region's commodities-based economies.
Trading was halted twice on Sao Paulo's Ibovespa index as stocks sank 15 percent ? reaching their lowest level in two years before rebounding. Brazil's currency, the real, slumped nearly 7 percent in its biggest one-day percentage loss against the U.S. dollar since 2002 and closed at a level not seen since September 25, 2006.
The Ibovespa later recovered, but still ended the day down 5.4 percent at 42,101, its lowest closing since Nov. 28, 2006.
Argentina's Merval fell 5.9 percent to close at 1,423, while Mexico's IPC index slid 5.4 percent to 21,749. Chile's IPSA dipped 6 percent to 2,450, and Colombia's IGBC fell 4.9 percent to 8,761.
Canada's main stock exchange, meanwhile, dropped 572.92 points, or 5 percent, after earlier plunging 10 percent amid widespread economic fears.
Associated Press Writers Alex Kennedy in Singapore and Yuri Kageyama in Tokyo, Emily Vencat in London and Alan Clendenning in Sao Paulo, Brazil contributed to this story


http://ap.google.com/article/ALeqM5h3kgMAkbLwyfxBdjzw8Pc4KZ7DhQD93L8P400

 

[sharon sanders]

Re: October 2008 Economic Phenomena

Fed lays out details for bank loans

Tuesday October 7, 8:48 am ET
By Jeannine Aversa, AP Economics Writer <table border="0" cellpadding="0" cellspacing="0" height="4"><tbody><tr><td height="4">
</td></tr></tbody></table>Fed lays out details for when it will make short-term loans available to struggling banks

WASHINGTON (AP) -- The Federal Reserve is providing more details about when it will make billions of dollars in short-term loans available to squeezed banks.The loans -- part of an effort to ease intensifying credit stresses -- are made available to banks through auctions. The Fed -- in coordination with other countries' central banks engaged in similar efforts -- laid out dates that it will conduct the auctions through the rest of this year.
To help ease credit stresses, the Fed announced Monday it will provide as much as $900 billion in cash loans to banks. Most of the loans are for 28-days and 84-days. Some are shorter -- 13-day and 17-day loans.


http://biz.yahoo.com/ap/081007/fed_credit_crisis.html

 

[sharon sanders]

Fed Statement

Fed Statement

October 7, 2008, 9:00 am
Fed Statement on Plan to Buy Commercial Paper

The Fed released the following statement on a plan backed by the Treasury to buy commercial paper directly from issuers.

The Federal Reserve Board on Tuesday announced the creation of the Commercial Paper Funding Facility (CPFF), a facility that will complement the Federal Reserve?s existing credit facilities to help provide liquidity to term funding markets. The CPFF will provide a liquidity backstop to U.S. issuers of commercial paper through a special purpose vehicle (SPV) that will purchase three-month unsecured and asset-backed commercial paper directly from eligible issuers. The Federal Reserve will provide financing to the SPV under the CPFF and will be secured by all of the assets of the SPV and, in the case of commercial paper that is not asset-backed commercial paper, by the retention of up-front fees paid by the issuers or by other forms of security acceptable to the Federal Reserve in consultation with market participants. The Treasury believes this facility is necessary to prevent substantial disruptions to the financial markets and the economy and will make a special deposit at the Federal Reserve Bank of New York in support of this facility.
The commercial paper market has been under considerable strain in recent weeks as money market mutual funds and other investors, themselves often facing liquidity pressures, have become increasingly reluctant to purchase commercial paper, especially at longer-dated maturities. As a result, the volume of outstanding commercial paper has shrunk, interest rates on longer-term commercial paper have increased significantly, and an increasingly high percentage of outstanding paper must now be refinanced each day. A large share of outstanding commercial paper is issued or sponsored by financial intermediaries, and their difficulties placing commercial paper have made it more difficult for those intermediaries to play their vital role in meeting the credit needs of businesses and households.
By eliminating much of the risk that eligible issuers will not be able to repay investors by rolling over their maturing commercial paper obligations, this facility should encourage investors to once again engage in term lending in the commercial paper market. Added investor demand should lower commercial paper rates from their current elevated levels and foster issuance of longer-term commercial paper. An improved commercial paper market will enhance the ability of financial intermediaries to accommodate the credit needs of businesses and households.

 

[sharon sanders]

How does the media influence a financial crisis? The Cramer factor -

How does the media influence a financial crisis? The Cramer factor -

"...Add to that the "cascading" effect, for example, when commentators like self-described financial guru Jim Cramer bellows out in a "dramatic statement" Monday that investors who have money tied up in the stock market, and may need it in the next five years, should yank it out. That Cramer's dire proclamation that stocks could lose 20% of their value is directed at viewers, many who are likely among the casualties of the U.S. mortgage crisis, is akin to pouring gasoline over a raging inferno.

In behaviourist lingo, that's called "awfulizing," which means investors are gravitating towards the worst possible outcome by making short-term decisions that often have a self-prophesizing effect. Take Monday's nose dive after the recession predictions, for example.


"When people get anxious about their finances, we don't necessarily make the most sensible choices under these circumstances," Prof. Kramer says.
And even though the history of stock markets is littered with booms and busts, human behaviour ensures the herd mentality inevitably always dominates. We can expect this in a disease crisis too. (Fla1).





After all, when a bunch of people are selling their stock, who wants to buck the trend and risk being the last person holding worthless paper?
If there is money to be made, most people want to be part of that joy ride. Conversely, if there's money to be lost, no one wants to be around for that unpleasant experience.


For now, behavioural economics can explain why the herd instincts take over but it can't clarify why sentiments change the course of events.
In other words, the evolving science can measure the wild fluctuations and attempt to articulate the fear that is fuelling them. Yet there's no clear prescription for what will make them stop or change course.


And like her shell-shocked investing brethren, Prof. Kramer shares the pain too. "My confidence is shaken," she says, admitting that it has been painful to review the damage done to her personal stock portfolio. Even so, she declared "I went against my emotional reaction."


Put simply, the professor defied the trend to red and went on a buying spree at while the herd was going the other way. "I bought today. Prices are really cheap right now," she said rather sheepishly. "I'm looking at it in the long-term."



http://www.financialpost.com/most_popular/story.html?id=864215

 

[sharon sanders]

Re: October 2008 Economic Phenomena

Fed makes emergency move to lend directly to companies; Bernanke hints at rate cuts soon




"...The central bank invoked emergency powers to lend money to companies outside the financial sector and buy up mounds of commercial paper, the short-term debt that firms use to pay for everyday expenses like salaries and supplies...."


http://www.newser.com/article/d93lu...mpanies-bernanke-hints-at-rate-cuts-soon.html

 

[sharon sanders]

Re: October 2008 Economic Phenomena

"...Attorneys general and banking regulators from 11 states are calling on the nation's largest subprime-mortgage-servicing companies to follow Bank of America Corp.'s lead and embark on a broad-based loan-modification program.


"We believe that every major servicer of subprime loans should adopt these types of programs as soon as possible," state officials said in a letter sent Tuesday to 16 servicers. "We urge you in the strongest possible terms to adopt a comprehensive, streamlined and effective loan-modification program as soon as possible."

http://online.wsj.com/article/SB122342048455713109.html

 

[sharon sanders]

Nice, but not enough...

Nice, but not enough...

US consumers need real help. Their spending is 2/3 of the economy. Without an increase in spending power, all other efforts are "nice" but will not change the current situation.


Rate cuts in concert
Fed cuts to 1.5%; central banks take coordinated action

<!--webbot bot="HTMLMarkup" startspan alt="[3px-spacer]"-->

<!--webbot bot="HTMLMarkup" endspan -->
Central banks around the world order interest-rate reductions in a synchronized move to fight the global credit crisis.
? Complete text of rate-cut decision | Additional interest-rate reductions are in the pipeline, according to economists
? More is needed (First Take) | 10 things to love about the credit crunch (First Take) | Patient's still in the E.R. (24/7 Wall St.)
? A global show of banking force

| Banks aren't doing their share, contends economist Peter Morici

http://www.marketwatch.com/

 

[sharon sanders]

Re: October 2008 Economic Phenomena

Come on Banks!!! Show us the money!


"``This smells like panic to me,'' said Marius Daheim, a senior bond strategist in Munich at Bayerische Landesbank, Germany's second-biggest state-owned bank. ``We don't think this is going to do the trick with freeing up liquidity in the money markets. Banks will still hoard liquidity to meet future funding needs and rate cuts aren't going to do anything about that.'..."

http://www.bloomberg.com/apps/news?pid=20601087&sid=alTFdVJ7lHb0&refer=home

 

[Treyfish]

Re: October 2008 Economic Phenomena

Riots in Hong Kong after heavy stock losses

Wednesday, 8 October 2008 13:34
<rte:body>There have been riots on the streets of Hong Kong following heavy losses at the city's Hang Seng index.
The Hang Seng closed over 8% lower with losses in banks, communications companies and exploration companies.
Customers are trying to get their money out of bank branches and many are protesting about losses related to the collapse of Lehman Brothers.
Earlier, trading on the stock exchange in Jakarta was halted because today's falls were so severe.:tiphat:http://www.rte.ie/news/2008/1008/hongkong.html
</rte:body>

 

[sharon sanders]

Re: October 2008 Economic Phenomena

"..Americans continue buying imports from China at record rates. Retail outlets continue to provide vast quantities of Chinese-manufactured goods; buyers spent more than $266 billion on those goods between January and October 2007. (in only 10 months - Fla1) (According to the U.S. Census Bureau’s Foreign Trade Statistics report, that figure is already on its way to outstripping last year’s record of $233 billion.)."

http://www.hoover.org/research/focusonissues/focus/12436706.html

 

[sharon sanders]

Re: October 2008 Economic Phenomena

Wednesday, October 8, 2008 - 2:54 PM CDT
Target same-store sales slide; warns on Q3 earnings

The Business Journal of Milwaukee - by Jennifer Niemela Minneapolis / St. Paul Business Journal

<table style="float: right;" border="0" cellpadding="5" cellspacing="0"></table>Same-store sales for Target Corp. dropped 3 percent for September, the company announced Wednesday, a sign that the back-to-school shopping season was weaker than usual.
Analysts had expected a 1.3 percent decrease for the month.
Other retailers with Milwaukee-area locations, such as Wal-Mart Stores Inc. (NYSE: WAL) and Costco Wholesale Corp. (NYSE: COST), posted positive same-store gains (2.4 percent and 7 percent, respectively), but both also missed analyst expectations.
Minneapolis-based Target (NYSE: TGT) also said its third-quarter earnings per share will fall below the company?s first estimates, which had been 52 cents. Company officials blamed credit card write-offs and weak top-line retail growth for the expected EPS drop. The company will release its full third-quarter results on Nov. 17.
The discount retailer has struggled during the current soft economy because of its traditional strengths ? clothes and housewares ? are seen as less essential by shoppers as they pare back on spending.

http://www.bizjournals.com/milwaukee/stories/2008/10/06/daily24.html

 

[sharon sanders]

Slow Christmas Sales Season 2008 Predicted

Slow Christmas Sales Season 2008 Predicted

Give the U.S. consumer some relief....



"..Sales at some of the nation?s best-known retailers fell by double digits in September, highlighting the rapid deterioration of the economy and raising fresh questions about how many of those chains can survive.

Retail analysts and executives said they had not seen such a rapid slowdown in consumer spending since the nation?s last deep recession, in the early 1980s. Retail executives, though braced for bad news, were stunned at the magnitude of the drop-offs reported on Wednesday. Retailers high and low ? like Nordstrom, J. C. Penney and Kohl?s ? lowered their earnings projections.


September sales for stores open at least a year, known as same-store sales, a barometer of retail health, plunged 14.8 percent at Stein Mart, an off-price department store. That chain, like many others, was already in trouble a year ago, but the drop-off last September was only 9.1 percent..."



http://www.nytimes.com/2008/10/09/business/09retail.html

 

[sharon sanders]

Re: October 2008 Economic Phenomena

GM is dragging the dow down as investors bet company may not "make it".

Where is the support for the US consumer? Get banks lending! Guarantee bank to bank lending now!

GM market cap is near that of 1929.

NEW YORK (Fortune) -- How bad is it going to get for automakers? Worse, much worse.
Investors made a shocking vote of no confidence in the future of U.S. automakers Thursday. GM (GM, Fortune 500) stock was down more than 14% to $5.92 a share, while Ford (F, Fortune 500) fell 7.5% to $2.46. That gave GM a market capitalization of $4.3 billion - chump change for this industrial behemoth - while Ford stood only slightly better at $6.6 billion.




http://money.cnn.com/2008/10/09/news/companies/taylor_death_watch.fortune/?postversion=2008100911

 

[sharon sanders]

Re: October 2008 Economic Phenomena

US-dollar Libor rate have surged by 175-basis points in the past four weeks to 4.5% today,

















http://marketoracle.co.uk/Article6695.html

 

[sharon sanders]

Re: October 2008 Economic Phenomena

Reportedly England freezes assets of Iceland using terrorist law.

Iceland owes the world £116,000 for every man, woman and child on the island - including £1bn to UK councils


By Steve Doughty and Caroline Grant
Last updated at 5:47 PM on 09th October 2008


Iceland's banking system is £35billion in debt - the equivalent of an incredible £116,000 for every man, woman and child on the island, it was revealed today.


With a population of just over 300,000 - less than that of Norwich - a miniscule economy and banks deeply involved in global markets before the meltdown, Iceland is on the bring of national bankruptcy.


It will cost Britain too. British taxpayers are likely to have to pay out at least £2.4 billion to compensate hundreds of thousands of account holders at Landsbanki, the Icelandic lender.


And an additional £1 billion invested by UK local authorities may also be at risk as a result of the crisis in the country's financial sector.


One authority alone - Kent County Council - has £50 million deposited in Landsbanki and its UK subsidiary Heritable, as well as Glitnir Bank, while more than 20 others are thought to have exposure running into millions of pounds.


http://www.dailymail.co.uk/news/art...-child-island--including-1bn-UK-councils.html

 

[sharon sanders]

Re: October 2008 Economic Phenomena

This is against the law says UK?s prime minster Gordon Brown in a BBC interview

By Luna Finnsson on Oct 9, 2008


According to UK?s prime minster Gordon Brown in an Interview at the BBC tonight ?The Icelandic banks have not only failed the people of Iceland also the people of England and we will not tolerate that.?


He kept on saying that ?Billions of pounds of locked in savings accounts of Icelandic banks like Landsbanki and Kaupthing and what the Icelandic government is doing is against the law?


According to Prime Minister Geir Haarde this is not the case and Iceland would not tolerate being placed in the same category as terrorists and told reporters at a press meeting. ?We have talked to Alistair Darling and representatives from both governments will meet over the weekend and take on this growing problem?


Gordon Brown finished the interview by saying ?We will make sure that people feel secure in England.?


The BBC reporter taking the Interview ended his summary by saying ?This is going back to the time of the Code War?.

http://www.icenews.is/index.php/200...rime-minster-gordon-brown-in-a-bbc-interview/

 

[gsgs]

Re: October 2008 Economic Phenomena

it would be interesting to see shorter bank-to-bank lending rates.
Maybe they need the cash for the coming CDS-auctions ?

OK, I found this:

Euribor 1 week - current rates
10-09-2008 4.790 %
10-08-2008 5.019 %
10-07-2008 4.988 %
10-06-2008 4.885 %
10-03-2008 4.868 %
10-02-2008 4.848 %
10-01-2008 4.846 %
09-30-2008 4.839 %
09-29-2008 4.716 %
09-26-2008 4.792 %

it declined today


Fannie Mae and Freddie Mac CDS Auctions, 6th October 2008
Lehman auction on October 10
Washington Mutual is scheduled for October 23

other Euribor rates:
http://www.homefinance.nl/english/international-interest-rates/euribor-interest-rates.asp

 

[sharon sanders]

Global Financial Crisis 2008 - Ideas to Fix This?

Global Financial Crisis 2008 - Ideas to Fix This?

Radical action is required to reverse the current course of financial difficulties.

Paramount among these is the acknowledgment that the consumer must regain spending power. Consumer activity is 2/3 of the economy. If consumer demand drops significantly, for any reason, then an economic downturn in the U.S. is guaranteed. It is only a question of how bad the situation will become.

Some ideas:

Guarantee all deposits in U.S. chartered financial institutions for the foreseeable future.

Institute jobs programs reminiscent of the abc work programs of the Roosevelt administration to re-build aging infrastructure. Anyone who wants a job, can have one. There is plenty to do. Some of these jobs could be work programs in other countries who need help.

Impose a 90 day moratorium on foreclosures.

Take some of the 700 billion in the "bail out" program and lend directly to solvent businesses at a very low interest rate. An expedited process must make these loans available within 30 days.

Any bank that accepts U.S. government assistance must lower interest rates on credit cards and offer re-finance opportunities to mortgage holders irrespective of their current credit score. If the mortgage holders can prove an adequate source of income, then they qualify for a new loan which can be 100% of the current appraisal.

Re-write the standards to buy mortgages on the secondary market. i.e. lower credit scores with proof of income.

Pass legislation that cancels federal income tax for the rest of 2008. Payroll checks should immediately reflect this change by not withholding any federal income taxes. Total U.S. taxes receipts will be increased as a result of increased economic activity due to this tax "vacation".

Reduce capital gains taxes to 10% for the next 2 years. Again, total tax receipts will increase as a result of increased financial activity.

Continue to work with other countries to lower interest rates and provide positive economic stimulus for all.

 

[sharon sanders]

Re: October 2008 Economic Phenomena

"Anything less than a -500 in the Dow is the new up."

Commentator this morning on MSNBC TV.


I guess it was a down day.