Tag Archives | liquidity

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US wages continue to stagnate

The US Fed’s move to launch its QE2 Lifeboat continues its policy of focusing on measures to boost liquidity. Yet as the blog has long argued, today’s problems are based on a lack of solvency not liquidity. Therefore it worries that the Fed’s efforts are likely to miss the mark, again. The above slide, based […]

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US Fed launches its $600bn QE2 Lifeboat

So now its official. This week, the US Federal Reserve confirmed it was launching its ‘QE2 Lifeboat’. It will inject $600bn into the US economy, in yet another bid to kick-start full economic recovery. Clearly, this is a major initiative by the world’s most important central bank. Will it work? And what might it mean […]

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Oil “would be $30/bbl” without financial speculators

The blog’s argument that oil prices are now being entirely driven by financial market speculation has won support from one of the main state oil trading companies. ICIS news reports that the CEO of SOCAR Trading (State Oil Company of Azerbaijan Republic) claimed that the “rise in crude and other commodity prices, resulted principally from […]

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Moody’s worries about the chemical industry

Moody’s, the global ratings agency, is today forecasting a 70% chance of a U-shaped recession, and a 15% chance of either a V or L-shaped downturn. This broadly agrees with the blog’s own view, set out a month ago. Moody’s also singles out the chemical industry as being one of those most at risk from […]

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The end of the prologue

The report in today’s ‘Financial Times’ that Barclays Bank has lost ‘several hundred million dollars’, means that the UK has now joined every other global financial centre in suffering from the US subprime mortgage crisis. The news followed Friday’s 5% drop in the value of Bank of China’s shares, after it revealed it held $9.7bn […]

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Interesting quotes (3)

Some of these quotes just seemed too good to ignore… `I don’t see any impact as yet on the real economy or on the inflation rate. Obviously, there could be an impact, but we have to rely on some real evidence.’ There is ‘a sort of credit crunch’, in place affecting housing and some types […]

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Interesting Quotes (2)

Credit market problems intensified last week, even though stock markets rallied strongly until Wednesday. I thought you might like to see some more comments on what is going on, from people close to the action. ‘Trust was shaken today (Wednesday). Credit depends on trust. If trust disappears, then credit disappears, and you have a systemic […]

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Subprime: a many-headed Hydra

Yesterday, the ECB (European Central Bank) provided an unprecedented €95bn into the region’s credit markets, to maintain liquidity. Otherwise, firms would have had problems paying their bills, and employees might not have been paid their wages. This is serious stuff, and it was followed by the US Fed providing $24bn into US markets, and the […]

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Turning base quality loans into gold

Alchemists once claimed the ability to turn base metal into gold. More recently, some bankers seem to have been claiming a similar genius, via the magic catalyst of securitisation. These bankers no longer perform their traditional role of lending on a prudent basis to good quality borrowers in the personal or corporate sector. Instead, they […]

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