Category: Credit Crunch
The analysis published under this category are as follows.
Wednesday, January 06, 2010
The Fed Did NOT Cause the Credit Crunch, It Was Securitization: Here Is Proof! / Interest-Rates / Credit Crunch
By: Andrew_Butter
In Ben’s big speech the other day he said that it wasn’t the Fed’s fault, and that only 5% of the problem was caused by Greenspan dropping the base rate.
Saturday, October 04, 2008
Profiting Amid Financial Markets Chaos / Stock-Markets / Credit Crunch
By: Joseph_Russo
The Greatest Lie Ever Told
Now that the authorities essentially have received what they asked for, it will be with great interest that we will observe the equity market reaction. Given the potential response to mass recognition that the entire financial system may be nothing more than a gargantuan sham, it would not surprise us in the least to witness a four-digit one-day decline in the Dow before this bear is over.
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Sunday, August 17, 2008
Credit Crunch Anniversary and Mega Trends Investing / Stock-Markets / Credit Crunch
By: NewsLetter
Newsletter - 4th August 2008Dear Subscriber,
The 'official' anniversary of the credit crunch is linked to when the European Central Bank stepped in to provide an unprecedented amount of liquidity by pumping in $130 billion into the European banking system following news of the French bank Paribas freezing three of its hedge funds due to exposure to the US subprime mortgage market as panicking investors had been dumping holdings of mortgage lenders and mortgage backed derivatives and so began the self feeding credit crunch cycle of mortgage backed losses leading to asset price deflation leading to further tightening of the money markets as banks sought to hoard cash, as they lost confidence in their pricing models of the products they were trading with one another, which is more or less where we are today as the derivatives market continues to deleverage.
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Friday, August 15, 2008
Hard Cold Numbers on the Credit Crunch / Stock-Markets / Credit Crunch
By: Money_and_Markets
Mike Larson writes: Last week, I gave you several real-world examples of lenders who were refusing to take the Federal Reserve's "bait."
A quick recap: The Fed has been driving the cost of money down in an effort to spur more lending. But many banks have instead reduced their exposure to various business lines — and eliminated some loan products altogether.
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Monday, August 04, 2008
Credit Crunch Anniversary and Mega Trends Investing / Stock-Markets / Credit Crunch
By: Nadeem_Walayat
The 'official' anniversary of the credit crunch is linked to when the European Central Bank stepped in to provide an unprecedented amount of liquidity by pumping in $130 billion into the European banking system following news of
the French bank Paribas freezing three of its hedge funds due to exposure to the US subprime mortgage market as panicking investors had been dumping holdings of mortgage lenders and mortgage backed derivatives and so began the self feeding credit crunch cycle of mortgage backed losses leading to asset price deflation leading to further tightening of the money markets as banks sought to hoard cash, as they lost confidence in their pricing models of the products they were trading with one another, which is more or less where we are today as the derivatives market continues to deleverage. Read full article... Read full article...
Sunday, July 13, 2008
Fed is Playing an Incredibly Dangerous Game, a Look Back Over the Past 2 years / Interest-Rates / Credit Crunch
By: Mick_Phoenix
Welcome to the Weekly Report. Normally at An Occasional Letter From The Collection Agency we try to focus attention on the macro-economic near term effects using the Weekly Report, allowing the Occasional Letter to look further into the future by about 18-24 months. We have reached a stage now where it is becoming difficult to keep the various strands of my convoluted thoughts distinct and clear for the readers so, in keeping with one or two other writers it is time for a re-cap. Read full article... Read full article...
Tuesday, May 20, 2008
The Day Free Markets Died / Stock-Markets / Credit Crunch
By: Doug_Wakefield
Doug Wakefield with Ben Hill write: Though our government has increasingly influenced our markets since the creation of the Federal Reserve in 1913, we have recently reached the point where it would be a glaringly obvious misnomer to call the markets “free.” And while some aspects of a free market remain, those who've studied the day-to-day operations of our nation's banking system and the stock markets' performances at certain times, would likely come to the conclusion that, on occasion, the state, through the Fed and certain banks, intervenes to engineer market bottoms. Read full article... Read full article...
Monday, May 12, 2008
Triage In Financial Markets / Stock-Markets / Credit Crunch
By: Darryl_R_Schoon
Global financial markets are in extreme triage following the credit contraction of August 2007. It is believed central bankers are trying to restore markets to help the economy. In truth, they are like life insurance companies fighting to keep a wealthy patient alive so the high premiums will continue to be paid and the large death payout will be postponed. Read full article... Read full article...
Friday, March 21, 2008
Credit Crunch Hits Big Mortgage Banks Harder than Smaller Institutions / Housing-Market / Credit Crunch
By: MoneyFacts
The fallout from the credit crunch and predicted falling house prices have forced lenders to consider their positions in the market and reassess their attitude to risk based lending. Denise Harvey, mortgage analyst from moneyfacts.co.uk looks at the position of the UK’s largest lenders in today’s market.Read full article... Read full article...
Monday, February 04, 2008
Egg Card Cracked by Credit Crunch as Customers Scramble for Cover / Companies / Credit Crunch
By: Nadeem_Walayat
Egg bank took drastic action to limit its risk of exposure to potential bad debt defaults amongst its credit card holders by banning 160,000 of its customers from being able to use their credit cards for new transactions leaving cards open only for repayment of outstanding balances. Angry customers responded with tens of thousands of internet posts stating messages that they tended to clear their balances on time. The 160,000 banned amounts to 7% of the Egg credit card customer base. Read full article... Read full article...
Thursday, January 24, 2008
Credit Crisis to Escalate as Mortgage Bond Market Losses to Pass $3 Trillions! / Interest-Rates / Credit Crunch
By: Jim_Willie_CB
Bankers, Wall Street hucksters, financial network commentators, and floating analysts seem to have flunked basic arithmetic in grand fashion. Maybe they only expose the next link in a long chain of deception, their apparent expertise. One hears estimates of $200 billion on total mortgage bond losses from the Secy of Inflation Ben Bernanke. One witnesses the series of bond writedowns by Wall Street banks. One can read of Wall Street economists like Jan Hatzius of Goldman Sachs, who cites $400 billion in potential bond losses, a favorite figure cited by other bankers. One is subjected to press anchors and their simplistic echoes of bond losses. One is endlessly lectured by highbrow analysts of the extent of bond damage. The trouble is, they all cannot do simple arithmetic and observe the billboards on mortgage bond indexes, fully available.Read full article... Read full article...
Sunday, January 06, 2008
Credit Crunch Continues as Short-term Savings Interest Rates Remain High - Jan 08 / Personal_Finance / Credit Crunch
By: Shahla_Walayat
The worlds central banks announced in December 07 that they would take concerted action to help ease the liquidity crises that has been gripping the financial sector since August 07. Whilst this has had a big impact on the interbank market, this article looks at its impact on the personal savings market.Read full article... Read full article...
Wednesday, January 02, 2008
Credit Collapse Domino Effect to Send Stocks Lower / Stock-Markets / Credit Crunch
By: Captain_Hook
There's no reason to be short the stock market from a seasonal perspective anymore. And with all the giveaways these days, along with apparent ample money supply, again, if contemplating participation in the stock market, without a doubt the ‘rational man' would be compelled to be long given it appears authorities have the subprime mess under control – right? Correspondingly then, both short and put / call ratios should be falling, and in fact this is exactly what is happening as market participants get squeezed in a traditional Santa Claus rally. From a sentiment related perspective this is a bearish set-up along the lines of Dave's thoughts on the subject – The Grinch That Stole Christmas . Read full article... Read full article...
Friday, December 28, 2007
Credit Crunch Time for American Consumers / Economics / Credit Crunch
By: Peter_Schiff
The subprime mortgage crisis is merely the tip of a very large iceberg. Beneath the surface lies not only a sea of tenuous loans to prime borrowers, but also an assortment of other liabilities backed by auto loans and credit card debit. Now that home equity extractions, "zero percent auto financing" and "zero interest" credit card rollovers are much harder to come by, Americans must do without the credit lifelines that have previously kept them afloat. Read full article... Read full article...
Friday, December 21, 2007
Sovereign Wealth Fund Capital Injections Will Fail to Increase Commercial Bank Lending / Stock-Markets / Credit Crunch
By: Paul_L_Kasriel
When economists discuss investment in real capital expenditures they make a distinction between gross and net. If investment expenditures just match the depreciation of capital equipment, then gross investment rises, but net investment is unchanged. Increases in net investment, not gross investment, are what matters with regard to the future productivity of the economy.Read full article... Read full article...
Friday, December 21, 2007
Central Banks Flood Wall Street with Money With Little Effect / Interest-Rates / Credit Crunch
By: Money_and_Markets
Mike Larson writes: I spend my time analyzing and trading the markets now. But back in college, I double-majored in English and Journalism. So I'm familiar with many of the classics — those great works of literature that still have relevance to current events.
For instance, I can't get Samuel Taylor Coleridge's "Rime of the Ancient Mariner" out of my head. You've probably heard the classic lament:
"Water, water, every where,
And all the boards did shrink;
Water, water, every where,
Nor any drop to drink."
Thursday, December 20, 2007
Fed Liquidity Intervention in Recognition of Credit Crisis / Stock-Markets / Credit Crunch
By: David_Vaughn
Well, Christmas is just around the corner. Bet your kids are excited if you still have little ones around the house. On top of Christmas the world is coming unhinged but really nothing more exciting. Let me get something clear right up front concerning last weeks article. Number one I was not “Bush Bashing.” Heck, I voted for the man. My point in the article was the inevitability of a coming crisis in Iran . Enough said on that. Let's get back to Christmas.Read full article... Read full article...
Wednesday, December 19, 2007
Interbank Interest Rates Fall as Central Banks Succeed in Easing Liquidity Squeeze / Interest-Rates / Credit Crunch
By: Nadeem_Walayat
Concerted action by the worlds central banks is beginning to have an impact on the money market interbank rates. This resulted in a a sharp drop today in the Sterling LIBOR rate down from 6.38% last night to 6.20% today. Similar action by the US Fed and ECB has pushed Euro and US Dollar LIBOR rates significantly lower as the graph below demonstrates.Read full article... Read full article...
Wednesday, December 19, 2007
Interbank Market Under Pressure Due to Year End Reporting / Forecasts / Credit Crunch
By: Ned_W_Schmidt
Can financial system be in as big a mess as central banks' actions suggest? Year end is rapidly approaching, and accounting convention calls for all to strike balance sheets. Those financial statements influence the evaluations of firms by investors, regulators, and rating"agencies. Because of credit chaos, those institutions want to show sound, liquid balance sheets. As a consequence of the unusual demand for liquidity, the inter bank market for funds is under serious pressure.Read full article... Read full article...
Tuesday, December 18, 2007
US Fed Emerges to Lead the World Out of the Subprime Crisis via the New Auction Facility / Interest-Rates / Credit Crunch
By: Axel_Merk
True leadership may have finally emerged to resolve the subprime crisis, although it was difficult to spot during a tumultuous week at the Federal Reserve (Fed). On Tuesday, December 11, 2007, the Fed cut interest rates by 0.25%. The Dow Jones index, disappointed in what was another effort by the Fed to claim to be both on top of inflation and the crisis in the credit markets, fell about 300 points. Around 6:30pm E.T. that night, ‘sources close to the Fed' suggested that banks would be able to borrow money from the Fed directly at rates set through an auction, rather than the discount rate set by the Fed. This was confirmed the next morning at around 8:13 am E.T., minutes before futures trading resumed, together with an announcement that foreign central banks, effective immediately, would be allowed to engage in currency swap agreements with the Fed. Read full article... Read full article...