Worldwide Banking Crisis Is Worst In 30 Years

[LaoPo]

Regulators and bankers defend Bear Stearns rescue*

Thu Apr 3, 2008 4:39pm EDT

Same-Same as previous post. However, have a look at the slide show with images of the Key-Players FED - BEAR STEARNS - and other VIP's:

http://www.reuters.com/article/topNews/idUSWAT00924220080403

http://www.reuters.com/news/pictures/artic...ame=topNews#a=1 SLIDE SHOW

* defend BS rescue....of course...

LaoPo

[LaoPo]

Moody's cuts Countrywide Bank rating to "D"...once America's largest mortgage lender....OUCH !

Thu Apr 3, 2008 5:21pm EDT

NEW YORK, April 3 (Reuters) - Moody's Investors Service on Thursday cut its bank financial strength rating on Countrywide Bank to "D," or default, citing liquidity issues at its parent, Countrywide Financial Corp (CFC.N: Quote, Profile, Research) and Countrywide Home Loans.

Liquidity at Countrywide Financial and Countrywide Home Loans worsened substantially in the first quarter amid continued weakness in residential mortgages and recessionary forces in the U.S. economy, Moody's said in a statement.

The liquidity issues could impair Countrywide Bank's franchise, Moody's Vice President Craig Emrick said in a statement.

The downgrade does not reflect Countrywide's planned acquisition by Bank of America, however, Moody's said. The rating was lowered from "C-minus" but is on review for upgrade pending completion of the Bank of America acquisition, Moody's said.

Moody's said it believes Countrywide has the liquidity and capital necessary to operate through the planned closing of the proposed acquisition, which is expected in the third quarter of 2008.

"However, the downgrade of the bank financial strength rating provides insight into the severity of the Countrywide ratings transition that would likely take place if the proposed Bank of America acquisition would be terminated," Moody's said.

If the acquisition is not completed, Countrywide Financial's ratings would likely be cut to a few steps below investment grade, in the low "Ba" or high "B" category, Moody's said. Its senior unsecured rating is currently "Baa3," the lowest investment grade.

http://www.reuters.com/article/rbssFinanci...340138620080403

CFC - Countrywide lost -85% of it's value since last year in May 2007. CFC lost another -2.35% after trading hours.

Countrywide cuts 3 top executives' target bonuses

Thu Apr 3, 2008 6:08pm EDT

But.....

Countrywide lost about $1.62 billion in the second half of 2007 as mortgage and credit markets deteriorated.

Separately, Calabasas, California-based Countrywide confirmed that Chief Operating Officer David Sambol was on April 1 to receive a performance-based restricted stock award worth at least $9 million.

Sambol was tapped to lead Bank of America's consumer mortgage operations after the merger is completed.

The Charlotte, North Carolina-based bank last week said it agreed to pay Sambol $28 million, an amount that vests over three years, to run that business.

http://www.reuters.com/article/fundsFundsN...330654820080403

LaoPo

[lannarebirth]

I wonder if Islamic banks are encountering the same difficulties as other gobal banks? While I abhor Islamic fundamentalism and it's violent manifestations, I have a certain respect for Islamic banking fundamentals. Wouldn't mind seeing more banks conduct business similarly.

http://en.wikipedia.org/wiki/Islamic_banking

[LaoPo]

I wonder if Islamic banks are encountering the same difficulties as other gobal banks? While I abhor Islamic fundamentalism and it's violent manifestations, I have a certain respect for Islamic banking fundamentals. Wouldn't mind seeing more banks conduct business similarly.

http://en.wikipedia.org/wiki/Islamic_banking

Of course they do. The UAEa and other Arab countries and it's sheiks are large investors in US' and other banks.

Abu Dhabi invested in Citigroup with $7.5 billion in return for a 4.9 per cent stake and a fixed annual payment of 11 per cent of its investment. That's not a bad deal...BUT:

That was in November '07 and the stock price went down at least 20-25% since that date and that's a big piece of cake and very dry to swallow for the Arabs.

More cases out there.

Of course they feel the pain also but maybe they're better in hiding their losses. After all, WHO control those banks......? it's not democratic transparency in the desert.

But, there's still oil and money left in the same desert...

I don't know if Islamic Banking fundamentals are so 'clean'....it is known the sheiks (read: Banks) are financial supporters of extremists and extremist Mosques, amongst a lot of other nasty things.

LaoPo

[Naam]

I wonder if Islamic banks are encountering the same difficulties as other gobal banks? While I abhor Islamic fundamentalism and it's violent manifestations, I have a certain respect for Islamic banking fundamentals. Wouldn't mind seeing more banks conduct business similarly.

having worked, lived and done business in the Middle East for years my respect for Islamic Banking is rather limited. in reality it boils down that "interest" (whether debit or credit interest) is called "commission"

[LaoPo]

I wonder if Islamic banks are encountering the same difficulties as other gobal banks? While I abhor Islamic fundamentalism and it's violent manifestations, I have a certain respect for Islamic banking fundamentals. Wouldn't mind seeing more banks conduct business similarly.

having worked, lived and done business in the Middle East for years my respect for Islamic Banking is rather limited. in reality it boils down that "interest" (whether debit or credit interest) is called "commission"

Indeed. Talking implementing Islam Laws....*

But, if a Danish cartoonist prints a funny cartoon, all Helll brakes loose and thunder and lighting strikes the western world with the Qur'an in their hands.

* One time in Thailand I asked some high-so Arabs, drinking expensive Whisky, if that was allowed according to their Qur'an...."Allah can't see us here"...and laughed.....true answer.

Right

LaoPo

[Pakboong]

A couple of leading economists in commenting on the the Feds 3 week old practice of loaning directly to Wall Street investment banks, are saying that the money is being used to artificially prop up the equity markets. The Fed loaned an average of $38.1 billion per day this past week and $32.1 the second week and $13.4 the first week. That is a lot of money and I must admit, I am a bit puzzled by this particular strategy. Could they be totally desperate and it is a last ditch effort to save themselves?

[Naam]

I wonder if Islamic banks are encountering the same difficulties as other gobal banks? While I abhor Islamic fundamentalism and it's violent manifestations, I have a certain respect for Islamic banking fundamentals. Wouldn't mind seeing more banks conduct business similarly.

having worked, lived and done business in the Middle East for years my respect for Islamic Banking is rather limited. in reality it boils down that "interest" (whether debit or credit interest) is called "commission"

Indeed. Talking implementing Islam Laws....*

But, if a Danish cartoonist prints a funny cartoon, all Helll brakes loose and thunder and lighting strikes the western world with the Qur'an in their hands.

* One time in Thailand I asked some high-so Arabs, drinking expensive Whisky, if that was allowed according to their Qur'an...."Allah can't see us here"...and laughed.....true answer.

Right

LaoPo

i don't think the cartoons were "funny" LaoPo. their only the effect was what your country fellow Geerd Wilders is trying to achieve with his film

as far as whisky is concerned... the Qr'an forbids wine. whisky, vodka, gin and the like are not mentioned

[LaoPo]

I wonder if Islamic banks are encountering the same difficulties as other gobal banks? While I abhor Islamic fundamentalism and it's violent manifestations, I have a certain respect for Islamic banking fundamentals. Wouldn't mind seeing more banks conduct business similarly.

having worked, lived and done business in the Middle East for years my respect for Islamic Banking is rather limited. in reality it boils down that "interest" (whether debit or credit interest) is called "commission"

Indeed. Talking implementing Islam Laws....*

But, if a Danish cartoonist prints a funny cartoon, all Helll brakes loose and thunder and lighting strikes the western world with the Qur'an in their hands.

* One time in Thailand I asked some high-so Arabs, drinking expensive Whisky, if that was allowed according to their Qur'an...."Allah can't see us here"...and laughed.....true answer.

Right

LaoPo

i don't think the cartoons were "funny" LaoPo. their only the effect was what your country fellow Geerd Wilders is trying to achieve with his film

as far as whisky is concerned... the Qr'an forbids wine. whisky, vodka, gin and the like are not mentioned

I better stop talking about Islam, Islamic Banking, drinking alcohol and cartoons here, whether funny or not and that includes Mr. Wilders. He's also not funny...we've seen enough right winged extremist idiots in the 20th century in Europe.

More than enough.

Note:

When I sent the message I realized the content was maybe a little harsh, sharp if you like, but not intentionally meant to hurt or bash whomever. In fact I agree with Naam what Wilders is concerned. The cartoon, being funny or not, however is another matter but we better leave this discussion about religion.

Not good for the blood pressure

LaoPo

Edited April 5, 2008 by LaoPo

[LaoPo]

UBS's Capital Increase May Not Be Enough, Ethos Says

By Warren Giles

April 8 (Bloomberg) -- UBS AG's plan to raise 15 billion Swiss francs ($14.9 billion) in a rights offer may be insufficient to replenish capital, said the Ethos Foundation, an investor in Switzerland's biggest bank.

``It's questionable whether the 15 billion francs will be enough,'' Vinzenz Mathys, a spokesman for the Geneva-based foundation, said today in an interview. Ethos said it plans to back UBS's nomination of Peter Kurer, 58, to replace Chairman Marcel Ospel as an ``interim solution.''

UBS is seeking shareholder approval for the capital increase and for the appointment of Kurer, the company's top lawyer, after piling up more than 25 billion francs of losses since the third quarter of 2007. A bet on mortgage securities at the peak of the U.S. housing market led to almost $38 billion of writedowns on debt securities at UBS, the most by any bank.

Former UBS President Luqman Arnold called last week for a breakup of the Zurich-based bank and urged UBS to seek a banking expert to succeed Ospel, rather than Kurer. Arnold, whose Olivant Advisers Ltd. holds 0.7 percent of Zurich-based UBS, made his proposals in a letter to board member Sergio Marchionne dated April 3. Arnold plans to meet with Marchionne before the company's annual shareholders meeting on April 23.

UBS rose for the fifth day in six in Swiss trading, and was up 28 centimes, or 0.8 percent, at 35.68 francs by 1:28 p.m. The stock has advanced 24 percent since March 31, the most among the 60 companies on the Bloomberg Europe Banks and Financial Services Index.

Continues here:

http://www.bloomberg.com/apps/news?pid=206...&refer=news

LaoPo

[LaoPo]

German Banks Face Profit Headwind, Moody's Reports

By Aaron Kirchfeld

April 8 (Bloomberg) -- German banks such as Deutsche Bank AG and WestLB AG will struggle to boost profit because of fallout from the U.S. subprime collapse and domestic competition, Moody's Investors Service said.

The ratings company lowered its outlook for German bank credit to ``negative'' from ``stable,'' according to a report presented in Frankfurt today.

``It's too early to say that we see the light at the end of the tunnel,'' Johannes Wassenberg, a managing director at Moody's, told reporters. ``Headwinds may even increase, and no significant improvements can be expected for 2008.''

Germany remains ``over-banked'' with 2,277 lenders, Moody's said. Commercial lenders such as Commerzbank AG compete with state-owned banks and cooperative lenders for retail and wholesale customers, making it difficult to win market share. Many German companies piled money into structured products to offset sluggish earnings. These markets have dried up amid the U.S. housing crisis and credit crunch, Moody's said.

German banking mergers could strengthen the system and help credit ratings in the long term if they are well managed and the business models fit, analyst Katharina Barten said today.

``The financial crisis may drive consolidation, but it is unlikely to happen in 2008,'' Barten said. German banks are still busy determining writedowns and losses related to the U.S. subprime meltdown, she said.

A merger between Deutsche Postbank AG and another German bank wouldn't be the ``all-awaited breakthrough'' that some investors are hoping for, Wassenberg added. Consolidation will be a ``long and painful'' process, especially among Germany's state-owned banks, known as Landesbanks, because of the political influences.

---Bloomberg.

LaoPo

[LaoPo]

Washington Mutual Gets $7 Billion From TPG-Led Group

April 8 (Bloomberg) -- Washington Mutual Inc., the largest U.S. savings and loan, got $7 billion from a group of investors led by David Bonderman's TPG Inc. after losses on subprime loans ate up capital and erased 74 percent of its market value.

Washington Mutual sold 176 million shares at $8.75 a piece, 33 percent below yesterday's closing price on the New York Stock Exchange, and preferred shares, the company said in a statement today. The lender also slashed its dividend and announced 3,000 job cuts. The stock fell as much as 13 percent.

Continues here:

http://www.bloomberg.com/apps/news?pid=206...&refer=news

LaoPo

[LaoPo]

Morgan Stanley's Mack Expects Credit Crisis to Last

By Christine Harper

April 8 (Bloomberg) -- Morgan Stanley Chief Executive Officer John Mack said the credit crisis will last ``a couple of quarters'' longer as it spreads to commercial real estate, European lenders with subprime holdings and U.S. midsized banks.

``It's going to be a difficult year for the Street,'' Mack said to reporters before the company's annual meeting today in Purchase, New York. Mack, 63, told shareholders the markets are facing the most difficult conditions he's seen in 40 years.

The world's biggest banks and brokerages have reported more than $230 billion of losses and writedowns since the start of last year because of the collapse of the subprime mortgage market. Morgan Stanley, the second-biggest U.S. securities firm, said in a report earlier this month that turmoil in the credit markets may last an additional five to seven quarters, exceeding the Asia currency crisis and the bursting of the dot-com bubble.

To weather the slowdown, New York-based Morgan Stanley will need to maintain ``a lot of liquidity,'' Mack said, so the company is only ``gingerly'' investing in distressed assets. He said the U.S. subprime crisis may be almost over, though European companies holding such assets will take longer to recover.

Mack was re-elected to the company's board with about 95 percent of shareholder votes, the company said at the meeting. The rest of the board received more than 90 percent of the vote.

Mack and the other directors overcame criticism from pension funds including the California State Teachers' Retirement System, which said last week it withheld its votes for several board members, including Mack. CalSTRS, as the fund is known, said shares of the company have underperformed the market and the company's biggest competitors.

Morgan Stanley, which has dropped 10 percent this year on the New York Stock Exchange, fell 54 cents, or 1.1 percent, to $47.55 in 10:16 a.m. composite trading.

---Bloomberg

LaoPo

[LaoPo]

IMF Says Financial Losses May Swell to $945 Billion

By Christopher Swann

April 8 (Bloomberg) -- The International Monetary Fund said financial losses stemming from the U.S. mortgage crisis may approach $1 trillion, citing a ``collective failure'' to predict the breadth of the crisis.

Falling U.S. house prices and rising delinquencies may lead to $565 billion in mortgage-market losses, the IMF said in its annual Global Financial Stability report, released today in Washington. Total losses, including the securities tied to commercial real estate and loans to consumers and companies, may reach $945 billion, the fund said.

The forecast signals the worst of the credit crunch may be yet to come, because banks and securities firms so far have posted $232 billion in asset writedowns and credit losses. Policy makers, concerned that lenders' deteriorating balance sheets will hobble economic growth, are pushing companies to raise capital.

``The current turmoil is more than simply a liquidity event, reflecting deep-seated balance-sheet fragilities and weak capital bases, which means its effects are likely to be broader, deeper and more protracted,'' the report said. The fund warned of the risk of ``a serious funding and confidence crisis that threatens to continue for a significant period.''

Morgan Stanley Chief Executive Officer John Mack told shareholders at the company's annual meeting in Purchase, New York, today that the credit crisis will last ``a couple of quarters'' longer.

G-7 Ministers Meeting

Today's report comes days before finance ministers and central bank governors from the IMF's 185 members gather in Washington for spring meetings of the fund and World Bank. Group of Seven policy makers meet April 11.

Continues here:

http://www.bloomberg.com/apps/news?pid=206...p;refer=economy

LaoPo

[LaoPo]

German Regulator BaFin Orders Closure of Weserbank

By Oliver Suess

April 9 (Bloomberg) -- German financial-market regulator BaFin has ordered Weserbank AG to stop doing business, making it the first German bank to fail since the subprime crisis started.

BaFin ordered the Bremerhaven, Germany-based bank to close to preserve remaining assets and started insolvency proceedings, it said in an e-mailed statement today. The lender is over-indebted after a change of its business model left insufficient earnings to cover costs, BaFin said.

Weserbank, a former cooperative bank for butchers and cattle- dealers founded in 1912, is the first German lender to file for insolvency since the credit-market crisis started last year, triggered by the collapse of the U.S. subprime mortgage market. The last bank closure occurred when BaFin withdrew the banking license of Reithinger Bank in August 2006.

Weserbank, named Viehmarktsbank der Unterweserstaedte GmbH until 2004, had total assets of about 120.4 million euros ($189 million) and 24.9 million euros in liabilities at the end of 2007, BaFin said, adding that customers' deposits are protected.

``While the current environment is certainly difficult for banks in general, Weserbank's main problem has been that its new business model that focused on company financing and managing initial public offerings hasn't worked out,'' BaFin spokesman Sven Gebauer said in an interview today.

No Government Backing

Declines in Weserbank's investments ``in floating rate notes and sovereign risks'' led to today's closure, Weserbank management board member Gerhard Nimschik said in an interview today. ``As a small private bank, we don't have government backing for a bailout,'' Nimschik said. ``We were not able to guarantee the bank's continuation despite several capital increases and restructuring efforts by the management.''

IKB Deutsche Industriebank AG became the first German casualty of the subprime crisis in July when a finance affiliate couldn't raise funding. It has received more than 8 billion euros in aid from Germany's development bank and majority owner KfW Group, the government and the country's banking associations.

Landesbank Sachsen AG was bought last year by larger rival Landesbank Baden-Wuerttemberg to save it from closure after the state of Saxony agreed to cover 2.75 billion euros in subprime- related risks.

Dresdner Bank AG, the banking arm of insurer Allianz SE, has reported more than 1.6 billion euros in credit-related writedowns. Bayerische Landesbank last week reported 4.3 billion euros in writedowns from the subprime-market collapse, double its previous estimate and the biggest of any German state bank.

---Bloomberg

LaoPo

[Naam]

Dresdner Bank AG, the banking arm of insurer Allianz SE, has reported more than 1.6 billion euros in credit-related writedowns. Bayerische Landesbank last week reported 4.3 billion euros in writedowns from the subprime-market collapse, double its previous estimate and the biggest of any German state bank.

LaoPo

even though the present write-offs might be higher than the actual losses incurred i can only shake my head when i look at those super clever bankers (especially UBS where i bank) who are trying to "educate" their clients with a daily bombardement of "advices, education notes and top picks"

[LaoPo]

Dresdner Bank AG, the banking arm of insurer Allianz SE, has reported more than 1.6 billion euros in credit-related writedowns. Bayerische Landesbank last week reported 4.3 billion euros in writedowns from the subprime-market collapse, double its previous estimate and the biggest of any German state bank.

LaoPo

even though the present write-offs might be higher than the actual losses incurred i can only shake my head when i look at those super clever bankers (especially UBS where i bank) who are trying to "educate" their clients with a daily bombardement of "advices, education notes and top picks"

Seconded.

LaoPo

[lannarebirth]

Financials recovery may take 25 years: Hendry

http://www.reuters.com/article/HedgeFundsa...986422020080409

[LaoPo]

Financials recovery may take 25 years: Hendry

http://www.reuters.com/article/HedgeFundsa...986422020080409

"He (Hugh Hendry, Chief Investment Officer of Eclectica Asset Management) predicted Citigroup, the largest U.S. bank and a major casualty of the crisis, could fall below $10 a share...."

That could well happen and I read the same somewhere else.

C = Citigroup had a 52Wk High: $ 55.55 and a 52Wk Low: $ 17.99. It's hanging around $ 23.50 now. The P/E at 38.24 is scary high with a F P/E 10.79 still too high if one takes the worldwide financial situation into consideration.

But...25 years to recover......I'm not going to wait for that

LaoPo

[LaoPo]

Templeton's Mobius Says Credit Crisis Is Near End

By Hanny Wan and Catherine Yang

April 17 (Bloomberg) -- Templeton Asset Management Ltd.'s Mark Mobius said the credit-market crisis that's caused $245 billion of losses at banks and brokerages is ``near the end.''

The fund manager, who oversees $47 billion in emerging- market equities, said he has been buying shares of banks including Bank of China Ltd. and Industrial & Commercial Bank of China Ltd. Malaysian equities are also becoming ``more and more attractive,'' he said in a Bloomberg Television interview today.

The MSCI World Index has gained 8.3 percent since closing at a 17-month low on March 17 on speculation that losses tied to subprime mortgage investments will be contained. Mobius joins the chief executives of JPMorgan Chase & Co., Lehman Brothers Holdings Inc., Morgan Stanley and Goldman Sachs Group Inc. in predicting that the worst of the credit crisis has passed.

``Most of the bad news is already in the market,'' Mobius, 71, said. ``The writedowns are coming in fast and furious.''

Energy stocks are his biggest investment because of rising oil prices, he said. He also added shares of Sweden's Oriflame Cosmetics SA to his holdings recently.

His $376 million Templeton Emerging Markets Fund gained 15 percent in the 12 months through yesterday, compared with a 19 percent advance by the MSCI Emerging Markets Index.

Shares of Bank of China, the country's third-biggest bank, fell as much as 22 percent this year in Hong Kong and are valued at 12 times estimated earnings. That's lower than the MSCI Emerging Markets Financial Index's 12.6 times. Industrial & Commercial Bank, the nation's biggest lender, dropped as much as 21 percent in 2008 in Hong Kong.

Largest Holdings

``We've been adding in the banking sector generally,'' Mobius said. ``Prices have come down to more reasonable levels.''

Shares of companies tied to banking and finance have suffered this year as credit-related losses mounted. The MSCI Emerging Market Financial Index has slumped 12 percent in that time, the second-worst performance of 10 industry groups. The gauge added 0.9 percent today, its third consecutive advance.

Helping to ease concerns, Jamie Dimon, JPMorgan's chief executive, said yesterday that the credit crisis is ``maybe 75 percent to 80 percent'' over. Goldman Sachs's CEO Lloyd Blankfein told investors last week that ``we're closer to the end than the beginning.''

Malaysia's Kuala Lumpur Composite Index on March 10 plunged 9.5 percent after the government suffered its worst election result in almost 50 years. The gauge has lost 13 percent in 2008.

`Good Impact'

Prime Minister Abdullah Ahmad Badawi last month vowed to proceed with infrastructure projects to promote growth and pledged measures to help the poor, seeking to reassure investors after the government's narrow poll victory.

Malaysian stocks are ``becoming more and more attractive as a result of these political changes,'' Mobius said. ``There has been re-awakening so to speak, reassessing that Malaysia should be doing well and prosper. I think that's good news and that could have good impact on the market.''

Petroleo Brasileiro SA, Brazil's state-controlled oil company, and PetroChina Co., China's largest oil producer, were respectively the biggest and third-biggest holdings in Mobius's emerging market fund as of the end of 2007.

Crude oil futures advanced 1 percent to $114.93 a barrel in New York yesterday, a record close. Futures were recently at $114.90. Barclays Capital and Merrill Lynch & Co. last month raised their U.S. crude-oil price forecasts for 2008 above $100 a barrel.

``Energy is by far the largest weighting in our portfolio,'' Mobius said. ``We don't see any reason to change that any time soon.''

The fund manager said he bought shares of Oriflame, which sells natural makeup in more than 50 countries, to benefit from rising consumer spending in Russia.

Shares of the company have gained 68 percent in the 12 months through yesterday. The company raised its annual sales forecast this month after first-quarter revenue exceeded managers' expectations on new products and Easter's timing.

---Bloomberg

LaoPo

[LaoPo]

But Citigroup report more losses....this time $ 5,11 Billion; now to a total of $ 40 Billion, so far for Citigroup:

Citigroup Reports Loss on Writedowns, Credit Costs

http://www.bloomberg.com/apps/news?pid=206...&refer=news

and the stockmarket is happy that the losses are not so extreme as anticipated and thus.......goes up what a world....

Note:

It seems that nobody cares if there are HUGE losses anymore....whether $ 3 Billion, 20 Billion, 40 Billion, 245 Billion...

who cares ?

John-in-the-street will notice, sooner or later.

LaoPo

[BEENTHEREDONETHAT]

It is truly amazing how they manage to stay in business with the losses they substain. You would think the stock holders would have all bailed out by now. But then I guess the feds keep them going or they will have a flood of bank closures.

[LaoPo]

It is truly amazing how they manage to stay in business with the losses they substain. You would think the stock holders would have all bailed out by now.

But then I guess the feds keep them going or they will have a flood of bank closures.

Nail on the head !

Can anyone imagine the Government/FED (ANY Government - ANY Central Bank) pumping $ Billions and Billions into 'normal' companies if they lose so much money....?

They're trying to save the economy from further downfall, drama and recession with aspirines and even Warren Buffett agreed that there is/was no way out for the FED to save Bear Stearns. "Buffett says he 'got a call' about Bear Stearns, but bailing out the investment bank with only two days for due diligence, he says, 'took some guts that I didn't want to match.' *

From: http://www.thaivisa.com/forum/index.php?sh...t&p=1931820

But if it's enough to save the country and rest of the world from further downfall remains to be seen.

It depends if there will be more 'Bear Stearns' .

* I want to make a remark about what Buffett said:

Of course Buffett was reluctant to step into Bear Stearns, having just 2 days...he was talking hiw OWN money !

The CEO's and CFO's of JPMorgan and the FED chaps, who saved Bear Stearns, were NOT talking their own company and money; it's a lot easier to 'take over' a company when it's not your own money and have a 'back-up' from the guys on top of the FED & Government in Washington....guaranteeing you, you won't be sued or go to jail in the future if things go wrong.

LaoPo

Edited April 18, 2008 by LaoPo

[cclub75]

It seems that nobody cares if there are HUGE losses anymore....whether $ 3 Billion, 20 Billion, 40 Billion, 245 Billion...

who cares ?

Indeed. It's because of the new paradigm : "it's good when it's less worse than the forecasts".

People forecast let's say -10 billions. And if the result is -8, then, wizzz, euphoria !

Magic stick... people don't talk about the -8 billions. Voila.

Meanwhile : the real world is taking hits : real estate continues to fall in the US, foreclosures continue to grow, gasoline goes up, consummers are under pressure, the credit market is still frozen, etc.

The momentum is building. Slowly but surely.

Suckers rally in WS or in Europe won't change the situation.

[bingobongo]

It seems that nobody cares if there are HUGE losses anymore....whether $ 3 Billion, 20 Billion, 40 Billion, 245 Billion...

who cares ?

Indeed. It's because of the new paradigm : "it's good when it's less worse than the forecasts".

People forecast let's say -10 billions. And if the result is -8, then, wizzz, euphoria !

Magic stick... people don't talk about the -8 billions. Voila.

Meanwhile : the real world is taking hits : real estate continues to fall in the US, foreclosures continue to grow, gasoline goes up, consummers are under pressure, the credit market is still frozen, etc.

The momentum is building. Slowly but surely.

Suckers rally in WS or in Europe won't change the situation.

agreed, if you look at the stats, this is nothing more than a short squeeze rally (shorts covering open positions), the trend is still down, with bounces along the way

also the anticpation of another fed rate cut on April 30

Edited April 18, 2008 by bingobongo

[lannarebirth]

http://online. wsj.com/article/ SB12083116416781 8299.html

Bankers Cast Doubt

On Key Rate Amid CrisisBy CARRICK MOLLENKAMP

April 16, 2008; Page A1

LONDON -- One of the most important barometers of the world's financial health could be sending false signals.

In a development that has implications for borrowers everywhere, from Russian oil producers to homeowners in Detroit, bankers and traders are expressing concerns that the London inter-bank offered rate, known as Libor, is becoming unreliable.

In recent months, the financial crisis sparked by subprime-mortgage problems has jolted banks and sent Libor sharply upward. The growing suspicions about Libor's veracity suggest that banks' troubles could be worse than they're willing to admit.

...snip

Fitch: U.S. Credit Card ABS Excess Spread Steady Despite Rising Chargeoffs

http://www.business wire.com/ portal/site/ google/?ndmViewI d=news_view&newsId=200804160061 02&newsLang=en

...snip

Currently, excess spread on credit card ABS has been bolstered by the drop in LIBOR rates. The coupon on most credit card ABS is based on one-month LIBOR, which has experienced a 250bp drop over the last six months. Therefore, the effects of slightly lower yield and higher chargeoffs are being offset by lower borrowing costs, keeping excess spread steady. Yield reduction has remained modest as well, as card issuers have proven adept at managing their yield through pricing initiatives and dynamic strategies implemented to reflect changes in card usage over time. As a result, although the prime rate, which drives cardholder interest rates has been lowered by 200bps since the beginning of the year, yield reduction on credit card ABS in March 2008 was only 36bps lower than the average for the 2007 calendar year. Yield comprises collected finance charges, fees and interchange revenue.

...snip

[bingobongo]

need anything else be said? good luck and get ready.......

Edited April 19, 2008 by bingobongo

[howtoescape]

Can anyone imagine the Government/FED (ANY Government - ANY Central Bank) pumping $ Billions and Billions into 'normal' companies if they lose so much money....?

Wholly agree, i and most younger people in the UK cant afford to buy property due to irresponsible lending/borrowing over the last 10 years which has overvalued property, now these people who have made money sitting on the sofa should suffer the problem theyve created, i cant see why i as a taxpayer should be funding the government to bail out banks and their shareholders so they can carry on offering cheap loans keeping the property market artificially high, hence keeping people such as myself out of the 2 tier property system. I WANT A PROPERTY CRASH!

http://news.bbc.co.uk/1/hi/business/7355754.stm

We seem to be living in a free market when times are good but as soon as things turn sour its cap in hand to the taxpayer for the free ride.

[LaoPo]

Can anyone imagine the Government/FED (ANY Government - ANY Central Bank) pumping $ Billions and Billions into 'normal' companies if they lose so much money....?

Wholly agree, i and most younger people in the UK cant afford to buy property due to irresponsible lending/borrowing over the last 10 years which has overvalued property, now these people who have made money sitting on the sofa should suffer the problem theyve created, i cant see why i as a taxpayer should be funding the government to bail out banks and their shareholders so they can carry on offering cheap loans keeping the property market artificially high, hence keeping people such as myself out of the 2 tier property system. I WANT A PROPERTY CRASH!

http://news.bbc.co.uk/1/hi/business/7355754.stm

We seem to be living in a free market when times are good but as soon as things turn sour its cap in hand to the taxpayer for the free ride.

I sympathy your cry out for an affordable house.

I don't know about the UK but I fear the government is to blame for a major part in not building enough houses since 30-40 years; it's not just the problem of the past 10 years I'm afraid.

There are many more people also in other countries on the mainland suffering from the same problem due to the shortage of affordable houses.

One way or another...the market HAS to come down, also because of the increasing 'greying' market, people reaching retiring age and wishing to live smaller or abroad.

LaoPo

[howtoescape]

There isnt a housing shortage in the Midlands and the North, the government are knocking down 400,000 houses similar to ones in London that sell for half a million pound. Property in these areas has gone up 300% or more in the last 10 years.

http://www.telegraph.co.uk/news/main.jhtml.../26/nhice26.xml

Furthermore the buy to let investors who own 9% of all property and just let the house sit idle in some cases as people arent willing to pay inflated rents havent helped the affordability, this is all on the back of artificially cheap loans, and now im bailing these people out.

The market should find its own level without government intervention that is ultimately keeping the wealth divide in society at unprecedented levels.

As your from the States you probably dont get UK news channels, the spin from our government is that we are in these troubling times because of America and the sub prime market. The same people were taking all the credit when things were going well, there is nothing like passing the buck for the mess they helped create.