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Market Outlook - Short Term
Tracked by: 6 Boarders
Kalidas,
Untill you do not stop your cut-paste business, You have to bear with me. Sorry, I can`t leave you in this status on this board.
Your words shows your culture. Of course of Hong Kong for which , you feel proud of....
In reply to:
SENSEX to rally by 2400 pts in 7 days
Posted by :
Kalidas
for lalitdeshpandey
You are a "Donkey Kong"
And by the way, why are you beating your drums and all those craps of businss talk with lots of cut and paste" on my thread? Don`t you have people who care to listen to you.
that explains - you are a "Donkey Kong". A self congratulatory monkey hopping on the roof of the others with a banana in one hand who throws its skin on the floor without realizing that someone may get hurt.
And again, better read my full message for 2400 rally before commenting - I already gave you very firm, point by point and authentic reply with facts and figures.
Go around hopping, hopping and hopping. I don,t leave anything for monkeys except a long stick....
Kalidas, Hong Kong
7-10-2008
Tracked by: 6 Boarders
for lalitdeshpandey
You are a "Donkey Kong"
And by the way, why are you beating your drums and all those craps of businss talk with lots of cut and paste" on my thread? Don`t you have people who care to listen to you.
that explains - you are a "Donkey Kong". A self congratulatory monkey hopping on the roof of the others with a banana in one hand who throws its skin on the floor without realizing that someone may get hurt.
And again, better read my full message for 2400 rally before commenting - I already gave you very firm, point by point and authentic reply with facts and figures.
Go around hopping, hopping and hopping. I don,t leave anything for monkeys except a long stick....
Kalidas, Hong Kong
7-10-2008
...
In reply to:
SENSEX to rally by 2400 pts in 7 days
Posted by :
Lalitdeshpandey
Kalidas,
Yor Post : `"Following are the factual SENSEX figures:
3-Oct-08 Friday 12,526.32 (-529)
2-Oct-08 Thursday 12,526.32 (Market closed in India only)
1-Oct-08 Wednesday 13,055.67 (+195)
30-Sep-08 Tuesday 12,860.43 (+265)
29-Sep-08 Monday 12,595.75 (-507)
26-Sep-08 Friday.. 13,102.18 (-445)
25-Sep-08 Thursday 13,547.18 Base
(My post was at 10:02 India time or 12:30 HK time)
.........................
I have already proved that 116 points down.
You predicted RALLY OF 2400 POINTS IN 7 DAYS.
DO YOU EMAN THAT I AM KID ???????????????????
Aceept your failure and get lost......
Tracked by: 0 Boarder
for Atheist,
If I remember well, you are from Bangalore. You did describe in narrative details, how it has deterioated. I am glad to know that my reply did help you. Get me a coffee when visit Banagalore.
Any business thrives on good product, good service, attention to the customer and above all solving the customer`s problems (called after sales service). A good appearance, friendly behaviour and smiling face (not laughing) welcomes the customer. Further, if you have a small business, the door has to be see through or open shop so that even working class people can walk through. If they find the shop behind the door, they feel the goods must be expensive. Neatness and basic cleanliness is the most important part of the retail business.
Never eat or allow employee to eat in the shop for taking lunch or dinner. Nor should one allow eating of tobacco or paan.
Biggies may not do well, because they tried to build the business just because they had the access to large amount of public funds. They do not train the staff as well as the Western corporations. There is no uniform, and if there is one, it is shabby, The employees are also having badly cut moustache or beards. The people should be clean shaven as far as possible. If there is female employee, often I find, they come in traditional style using liberal dose of coconut oil (which smells bad to many visitors). This is especially true in Hong Kong.
In Hong Kong, the retail owners pay for hair styles, clothes, make up and also force their employees to wear identification tag all the time.
Of course, one has to modify the approach having regard to local culture, but basic things should not be compromised.
Some small expenses on such basics bring in more and wealthy customers.
Kalidas, Hong Kong
7-10-2008...
In reply to:
Paulson`s Poison & Antidote
Posted by :
Atheist
Kalidas sir,
I am a part of the unorganized retail industry in India. I had asked you a question a few months earlier about the deteriorating life style of us middle class INDIANS caused by the global financial turmoil. I dont expect you to remember it. But your REPLY was of tremendous help.
Sir,In the last 3 months the sales have picked up in most of the small and medium retail stores(unorganized sector).
In fact the sales now are around 6 to 8 % MORE than the corresponding festival season last year.
At tha same time, the sales of BIGGIES like RELIANCE RETAIL and BIG BAZAAR(Kishore biyani) are lower compared to last year sales even though their Prices are very competitive.
Sir,Its very confusing.
What could be the reason? A response would be appreciated.
...Singh...
Tracked by: 108 Boarders
Another BS point:
Did some TA on DOW taking into account today wild fluctuations, in case of negative trend continuation, DOW can go to 9200 in ST else expect DOW to go UP!
Let us hope for the BEST!
Watxh Dow Future! Watch that YEN DOLLAR ratio.. it is back to 101+, close to 102.. still well below 106 level!
Gud luk & happy investing! :)...
In reply to:
WILL NIFTY HIT 3600 & SENSEX TOUCH 12000
Posted by : BullSheetRules
So DOW closed well above BS expectation of 9800+ value!
Dow closed in four digit figures.
9,955.50
-369.88 (-3.58%)
Oct 6 - Close
That four figures should be good enough to create all kind of scary and fearful headlines. That four figures will now put PRESSURE on different BIG PLAYers to take some steps!
Scope is still for some Downside to that 9800 on closing basis in 1-2 days!
Let us hope positive news along with rate cuts, better corporate results along with new accounting norms starts coming up!
Rally on DOW should be expected soon!
Gud luk & happy investing! :)
Tracked by: 0 Boarder
Manic Monday: After 800-Pt Plunge, Dow Ends ‘Just’ 350 Points Lower- AP...
In reply to:
The End of Wall Street
Posted by : sambala
Oil settles down $6.07 at $87.81 a barrel, as markets reel from global credit crisis.
Tracked by: 108 Boarders
So DOW closed well above BS expectation of 9800+ value!
Dow closed in four digit figures.
9,955.50
-369.88 (-3.58%)
Oct 6 - Close
That four figures should be good enough to create all kind of scary and fearful headlines. That four figures will now put PRESSURE on different BIG PLAYers to take some steps!
Scope is still for some Downside to that 9800 on closing basis in 1-2 days!
Let us hope positive news along with rate cuts, better corporate results along with new accounting norms starts coming up!
Rally on DOW should be expected soon!
Gud luk & happy investing! :)...
In reply to:
WILL NIFTY HIT 3600 & SENSEX TOUCH 12000
Posted by : pkjattking
Yes .... hopefully now Dow has shaken losers below the belt.... breaking 10,000 and media working jumping ... helps drive the fear factor....
Tracked by: 108 Boarders
Yes .... hopefully now Dow has shaken losers below the belt.... breaking 10,000 and media working jumping ... helps drive the fear factor.......
In reply to:
WILL NIFTY HIT 3600 & SENSEX TOUCH 12000
Posted by : BullSheetRules
lol.. Dow is 10000+ ...
did ya read all those Media scary, fearful headlines when Dow was going DOWN to 9800 level as per BS expectations :)
Unfortunately, that is what BS media will report about that four digit figures of DOW!
gud luk & happy investing! :)
Tracked by: 108 Boarders
lol.. Dow is 10000+ ...
did ya read all those Media scary, fearful headlines when Dow was going DOWN to 9800 level as per BS expectations :)
Unfortunately, that is what BS media will report about that four digit figures of DOW!
gud luk & happy investing! :)
...
In reply to:
WILL NIFTY HIT 3600 & SENSEX TOUCH 12000
Posted by : pkjattking
Look Dow is trying to close above 10000... I can not believe it...
Tracked by: 108 Boarders
Look Dow is trying to close above 10000... I can not believe it......
In reply to:
WILL NIFTY HIT 3600 & SENSEX TOUCH 12000
Posted by : BullSheetRules
Dear pkjattking,
Dow is already on that suicidal path!
9570 is the low so far...
Let us hope Big PLAYERS PLAY sensibly tomorrow in Indian markets!
YEN DOLLAR ratio close to 100.5 ... watch that for long term trend in equity markets!
Gud luk & happy investing!
Tracked by: 108 Boarders
Good to see DOW making a comeback with value 9800+.
That four figures should be gud enough to create those Scary, fearful headlines!
Market PLAYers would be under pressure to go for more sops like coordinated rate cuts. Thereafter, a good UPWARD rally should happen!
Gud luk & happy investing! :)...
In reply to:
WILL NIFTY HIT 3600 & SENSEX TOUCH 12000
Posted by : pkjattking
looks like now its brushed off that 9800 mark..... Dow want to suicide it self........
Tracked by: 108 Boarders
now she is showing a bit of life again.... I am getting tired and pissed off at Dow..... now...... what a stupid brain drain.......
In reply to:
WILL NIFTY HIT 3600 & SENSEX TOUCH 12000
Posted by : BullSheetRules
DOW market is making moves based on the proceeding that is going on FULD! :)
Gud luk & happy investing! :)
Tracked by: 0 Boarder
Darling warns Europe against unilateral action
By Gavin Cordon, PA
Monday, 6 October 2008
Chancellor Alistair Darling tonight issued a sharp warning to European leaders not to risk worsening the economic crisis by taking unilateral action to protect their own banks and depositors.
As stock markets around the world continued to plummet, Mr Darling told the Commons it was essential EU governments acted in a co-ordinated fashion if they were to avoid simply passing on problems to other member states.
In London the FTSE 100 Index slumped almost 8% in its biggest one day points fall ever, while in New York the Dow Jones Industrial Average fell below the 10,000 mark for the first time in four years.
The FTSE 100 also recorded its lowest level for four years and its biggest percentage drop since Black Monday in October 1987.
Mr Darling`s intervention came after the German, Danish and Greek governments became the latest countries to guarantee all depositors that their savings would be fully protected in the event of a bank collapse.
Following a similar move last week by the Irish government, it intensified pressure on the authorities in the UK - where deposits of up to £50,000 will be guaranteed from tomorrow - to follow suit.
Mr Darling said yesterday`s surprise announcement by the German government had been a "political declaration" of intent rather than a "legally binding" guarantee for depositors.
Nevertheless, he made clear his irritation at the actions of Berlin, just the day after Chancellor Angela Merkel took part in an emergency summit in Paris intended to co-ordinate the European response.
"It does demonstrate the problems that arise when member states take unilateral action because of course it does have a knock on effect for other member states. It does emphasise the need for us all to work together," Mr Darling told MPs.
"I think that it is very important, otherwise we will end up with a situation that is confused not just to depositors, but to the institutions themselves."
With EU finance ministers due to meet tomorrow in Luxembourg, Mr Darling welcomed a joint statement by European leaders acknowledging the need for "close co-ordination and co-operation" in future interventions.
He again emphasised commitment of the UK authorities to do "whatever is necessary" to maintain stability.
The Bank of England will inject another £40 billion into the markets tomorrow, with such operations set to continue into November, while the Financial Services Authority is consulting on whether further to raise the guarantee for depositors.
With Mr Brown at his side, Mr Darling also confirmed the Government will publish the Banking Bill tomorrow giving the authorities additional powers to intervene in failing banks.
The Chancellor refused to be drawn on calls by the Tories and Liberal Democrats for the Government to take shares in the banks - effectively part-nationalising them - in order to provide them with new capital
He said that the Government would act "quickly and and decisively" when it had proposals to bring forward, warning that speculation - as happened after the initial publication of the US bail-out plan - could cause further instability.
"We have looked at what happened in the United States, nothing is worse than coming forward with a plan that isn`t sufficiently developed, where questions cannot be answered," he said.
"That ended up with 1.5 trillion dollars being lost as a result of what was going on in the market over the ten days that followed."
He ruled out, however, a call by Liberal Democrat treasury spokesman Vince Cable to re-write the Bank of England`s remit to enable it to slash interest rates in a bid to re-start the economy.
"I don`t think that if you establish an independent central bank distant from government, that you should change its terms of reference just because times are difficult."
...
In reply to:
Black Monday II: the worst for decades
Posted by : sambala
European Banks: The Bailouts Continue
A series of government interventions are in the works as investors and politicians realize Europe is facing a banking crisis of its own
If the $700 billion mortgage bailout plan in the U.S. was supposed to calm global investors, someone forgot to tell Europe. Stock indexes from Paris to Frankfurt plunged as much as 9% on Oct. 6 over worries of a spreading crisis among European banks. A series of government interventions over the weekend and on Monday—following last week`s sudden bailouts and guarantees (BusinessWeek . com, 9/29/08)—only seemed to fan the flames of anxiety.
Investors and politicians are waking to the realization that Europe faces a banking and economic crisis of its own not linked solely to bad U.S. subprime debt. Since the credit crunch first hit 15 months ago, lending in the Old World has gotten tighter and tighter, and now the lack of capital flow is taking down globe-straddling European banks, threatening businesses with credit starvation, and roping in cash-strapped governments for multibillion-dollar, 11th-hour rescues.
"Banking is like religion: It`s all about trust and confidence," says Bob McDowall, European research director at financial-services consultancy Tower Group in London. "Governments and regulators are trying to demonstrate firm leadership and show confidence, but banks don`t trust each other."
Exposing Deep Holes
That lack of trust is a major cause of Europe`s worsening bank crisis. Aside from a few exceptions such as UBS (UBS), the Old World`s financial institutions weren`t as exposed to toxic mortgages as their American counterparts, and they`ve had a year to clean up their balance sheets. But the sudden nosedive in the U.S.—especially the collapse of Lehman Brothers—has virtually frozen European lending and exposed deep holes at institutions such as Belgium`s Fortis (FOR.BR) and Germany`s Hypo Real Estate Group (HRXG.DE).
Complicating the picture in Europe is that no central mechanisms exist to carry out a coordinated regionwide response of the sort engineered in the U.S. The European Central Bank has a more limited mandate than the Federal Reserve, and no EU equivalents exist to the U.S. Treasury Dept. or Securities & Exchange Commission.
That has left governments to tackle the crisis on a country-by-country basis, with sometimes divergent solutions that can even make matters worse for neighboring countries. A weekend meeting in Paris of top European leaders, called by Nicolas Sarkozy, the President of France and current holder of the EU`s six-month rotating presidency, made no evident progress in hammering out a framework for a regional solution.
"Europe`s piecemeal approach hasn`t helped build confidence," says Jeremy Batstone-Carr, director of private client research at stockbrokers Charles Stanley (CAY.L) in London. "Some form of coordinated response is necessary, but we haven`t seen that yet."
Rising Anxiety
The market tailspin on Oct. 6 was linked to the sense of panic engendered by the rolling country-specific reactions. Last week, for instance, the market was shocked and surprised by an €11.2 billion ($15.3 billion) part-nationalization of Fortis bank (BusinessWeek . com, 9/30/08), which signaled that bank`s balance sheet was in more trouble than previously thought. By Oct. 3, though, it became clear that more medicine was needed, and the Dutch government announced its intention to buy a 100% stake in Fortis` local operations for €16.8 billion ($22.9 billion).
More drama was to come over the weekend.
Tracked by: 0 Boarder
Darling warns Europe against unilateral action
By Gavin Cordon, PA
Monday, 6 October 2008
Chancellor Alistair Darling tonight issued a sharp warning to European leaders not to risk worsening the economic crisis by taking unilateral action to protect their own banks and depositors.
As stock markets around the world continued to plummet, Mr Darling told the Commons it was essential EU governments acted in a co-ordinated fashion if they were to avoid simply passing on problems to other member states.
In London the FTSE 100 Index slumped almost 8% in its biggest one day points fall ever, while in New York the Dow Jones Industrial Average fell below the 10,000 mark for the first time in four years.
The FTSE 100 also recorded its lowest level for four years and its biggest percentage drop since Black Monday in October 1987.
Mr Darling`s intervention came after the German, Danish and Greek governments became the latest countries to guarantee all depositors that their savings would be fully protected in the event of a bank collapse.
Following a similar move last week by the Irish government, it intensified pressure on the authorities in the UK - where deposits of up to £50,000 will be guaranteed from tomorrow - to follow suit.
Mr Darling said yesterday`s surprise announcement by the German government had been a "political declaration" of intent rather than a "legally binding" guarantee for depositors.
Nevertheless, he made clear his irritation at the actions of Berlin, just the day after Chancellor Angela Merkel took part in an emergency summit in Paris intended to co-ordinate the European response.
"It does demonstrate the problems that arise when member states take unilateral action because of course it does have a knock on effect for other member states. It does emphasise the need for us all to work together," Mr Darling told MPs.
"I think that it is very important, otherwise we will end up with a situation that is confused not just to depositors, but to the institutions themselves."
With EU finance ministers due to meet tomorrow in Luxembourg, Mr Darling welcomed a joint statement by European leaders acknowledging the need for "close co-ordination and co-operation" in future interventions.
He again emphasised commitment of the UK authorities to do "whatever is necessary" to maintain stability.
The Bank of England will inject another £40 billion into the markets tomorrow, with such operations set to continue into November, while the Financial Services Authority is consulting on whether further to raise the guarantee for depositors.
With Mr Brown at his side, Mr Darling also confirmed the Government will publish the Banking Bill tomorrow giving the authorities additional powers to intervene in failing banks.
The Chancellor refused to be drawn on calls by the Tories and Liberal Democrats for the Government to take shares in the banks - effectively part-nationalising them - in order to provide them with new capital
He said that the Government would act "quickly and and decisively" when it had proposals to bring forward, warning that speculation - as happened after the initial publication of the US bail-out plan - could cause further instability.
"We have looked at what happened in the United States, nothing is worse than coming forward with a plan that isn`t sufficiently developed, where questions cannot be answered," he said.
"That ended up with 1.5 trillion dollars being lost as a result of what was going on in the market over the ten days that followed."
He ruled out, however, a call by Liberal Democrat treasury spokesman Vince Cable to re-write the Bank of England`s remit to enable it to slash interest rates in a bid to re-start the economy.
"I don`t think that if you establish an independent central bank distant from government, that you should change its terms of reference just because times are difficult."
...
In reply to:
Black Monday II: the worst for decades
Posted by : sambala
European Banks: The Bailouts Continue
A series of government interventions are in the works as investors and politicians realize Europe is facing a banking crisis of its own
If the $700 billion mortgage bailout plan in the U.S. was supposed to calm global investors, someone forgot to tell Europe. Stock indexes from Paris to Frankfurt plunged as much as 9% on Oct. 6 over worries of a spreading crisis among European banks. A series of government interventions over the weekend and on Monday—following last week`s sudden bailouts and guarantees (BusinessWeek . com, 9/29/08)—only seemed to fan the flames of anxiety.
Investors and politicians are waking to the realization that Europe faces a banking and economic crisis of its own not linked solely to bad U.S. subprime debt. Since the credit crunch first hit 15 months ago, lending in the Old World has gotten tighter and tighter, and now the lack of capital flow is taking down globe-straddling European banks, threatening businesses with credit starvation, and roping in cash-strapped governments for multibillion-dollar, 11th-hour rescues.
"Banking is like religion: It`s all about trust and confidence," says Bob McDowall, European research director at financial-services consultancy Tower Group in London. "Governments and regulators are trying to demonstrate firm leadership and show confidence, but banks don`t trust each other."
Exposing Deep Holes
That lack of trust is a major cause of Europe`s worsening bank crisis. Aside from a few exceptions such as UBS (UBS), the Old World`s financial institutions weren`t as exposed to toxic mortgages as their American counterparts, and they`ve had a year to clean up their balance sheets. But the sudden nosedive in the U.S.—especially the collapse of Lehman Brothers—has virtually frozen European lending and exposed deep holes at institutions such as Belgium`s Fortis (FOR.BR) and Germany`s Hypo Real Estate Group (HRXG.DE).
Complicating the picture in Europe is that no central mechanisms exist to carry out a coordinated regionwide response of the sort engineered in the U.S. The European Central Bank has a more limited mandate than the Federal Reserve, and no EU equivalents exist to the U.S. Treasury Dept. or Securities & Exchange Commission.
That has left governments to tackle the crisis on a country-by-country basis, with sometimes divergent solutions that can even make matters worse for neighboring countries. A weekend meeting in Paris of top European leaders, called by Nicolas Sarkozy, the President of France and current holder of the EU`s six-month rotating presidency, made no evident progress in hammering out a framework for a regional solution.
"Europe`s piecemeal approach hasn`t helped build confidence," says Jeremy Batstone-Carr, director of private client research at stockbrokers Charles Stanley (CAY.L) in London. "Some form of coordinated response is necessary, but we haven`t seen that yet."
Rising Anxiety
The market tailspin on Oct. 6 was linked to the sense of panic engendered by the rolling country-specific reactions. Last week, for instance, the market was shocked and surprised by an €11.2 billion ($15.3 billion) part-nationalization of Fortis bank (BusinessWeek . com, 9/30/08), which signaled that bank`s balance sheet was in more trouble than previously thought. By Oct. 3, though, it became clear that more medicine was needed, and the Dutch government announced its intention to buy a 100% stake in Fortis` local operations for €16.8 billion ($22.9 billion).
More drama was to come over the weekend.
Tracked by: 0 Boarder
Darling warns Europe against unilateral action
By Gavin Cordon, PA
Monday, 6 October 2008
Chancellor Alistair Darling tonight issued a sharp warning to European leaders not to risk worsening the economic crisis by taking unilateral action to protect their own banks and depositors.
As stock markets around the world continued to plummet, Mr Darling told the Commons it was essential EU governments acted in a co-ordinated fashion if they were to avoid simply passing on problems to other member states.
In London the FTSE 100 Index slumped almost 8% in its biggest one day points fall ever, while in New York the Dow Jones Industrial Average fell below the 10,000 mark for the first time in four years.
The FTSE 100 also recorded its lowest level for four years and its biggest percentage drop since Black Monday in October 1987.
Mr Darling`s intervention came after the German, Danish and Greek governments became the latest countries to guarantee all depositors that their savings would be fully protected in the event of a bank collapse.
Following a similar move last week by the Irish government, it intensified pressure on the authorities in the UK - where deposits of up to £50,000 will be guaranteed from tomorrow - to follow suit.
Mr Darling said yesterday`s surprise announcement by the German government had been a "political declaration" of intent rather than a "legally binding" guarantee for depositors.
Nevertheless, he made clear his irritation at the actions of Berlin, just the day after Chancellor Angela Merkel took part in an emergency summit in Paris intended to co-ordinate the European response.
"It does demonstrate the problems that arise when member states take unilateral action because of course it does have a knock on effect for other member states. It does emphasise the need for us all to work together," Mr Darling told MPs.
"I think that it is very important, otherwise we will end up with a situation that is confused not just to depositors, but to the institutions themselves."
With EU finance ministers due to meet tomorrow in Luxembourg, Mr Darling welcomed a joint statement by European leaders acknowledging the need for "close co-ordination and co-operation" in future interventions.
He again emphasised commitment of the UK authorities to do "whatever is necessary" to maintain stability.
The Bank of England will inject another £40 billion into the markets tomorrow, with such operations set to continue into November, while the Financial Services Authority is consulting on whether further to raise the guarantee for depositors.
With Mr Brown at his side, Mr Darling also confirmed the Government will publish the Banking Bill tomorrow giving the authorities additional powers to intervene in failing banks.
The Chancellor refused to be drawn on calls by the Tories and Liberal Democrats for the Government to take shares in the banks - effectively part-nationalising them - in order to provide them with new capital
He said that the Government would act "quickly and and decisively" when it had proposals to bring forward, warning that speculation - as happened after the initial publication of the US bail-out plan - could cause further instability.
"We have looked at what happened in the United States, nothing is worse than coming forward with a plan that isn`t sufficiently developed, where questions cannot be answered," he said.
"That ended up with 1.5 trillion dollars being lost as a result of what was going on in the market over the ten days that followed."
He ruled out, however, a call by Liberal Democrat treasury spokesman Vince Cable to re-write the Bank of England`s remit to enable it to slash interest rates in a bid to re-start the economy.
"I don`t think that if you establish an independent central bank distant from government, that you should change its terms of reference just because times are difficult."
...
In reply to:
Black Monday II: the worst for decades
Posted by : sambala
European Banks: The Bailouts Continue
A series of government interventions are in the works as investors and politicians realize Europe is facing a banking crisis of its own
If the $700 billion mortgage bailout plan in the U.S. was supposed to calm global investors, someone forgot to tell Europe. Stock indexes from Paris to Frankfurt plunged as much as 9% on Oct. 6 over worries of a spreading crisis among European banks. A series of government interventions over the weekend and on Monday—following last week`s sudden bailouts and guarantees (BusinessWeek . com, 9/29/08)—only seemed to fan the flames of anxiety.
Investors and politicians are waking to the realization that Europe faces a banking and economic crisis of its own not linked solely to bad U.S. subprime debt. Since the credit crunch first hit 15 months ago, lending in the Old World has gotten tighter and tighter, and now the lack of capital flow is taking down globe-straddling European banks, threatening businesses with credit starvation, and roping in cash-strapped governments for multibillion-dollar, 11th-hour rescues.
"Banking is like religion: It`s all about trust and confidence," says Bob McDowall, European research director at financial-services consultancy Tower Group in London. "Governments and regulators are trying to demonstrate firm leadership and show confidence, but banks don`t trust each other."
Exposing Deep Holes
That lack of trust is a major cause of Europe`s worsening bank crisis. Aside from a few exceptions such as UBS (UBS), the Old World`s financial institutions weren`t as exposed to toxic mortgages as their American counterparts, and they`ve had a year to clean up their balance sheets. But the sudden nosedive in the U.S.—especially the collapse of Lehman Brothers—has virtually frozen European lending and exposed deep holes at institutions such as Belgium`s Fortis (FOR.BR) and Germany`s Hypo Real Estate Group (HRXG.DE).
Complicating the picture in Europe is that no central mechanisms exist to carry out a coordinated regionwide response of the sort engineered in the U.S. The European Central Bank has a more limited mandate than the Federal Reserve, and no EU equivalents exist to the U.S. Treasury Dept. or Securities & Exchange Commission.
That has left governments to tackle the crisis on a country-by-country basis, with sometimes divergent solutions that can even make matters worse for neighboring countries. A weekend meeting in Paris of top European leaders, called by Nicolas Sarkozy, the President of France and current holder of the EU`s six-month rotating presidency, made no evident progress in hammering out a framework for a regional solution.
"Europe`s piecemeal approach hasn`t helped build confidence," says Jeremy Batstone-Carr, director of private client research at stockbrokers Charles Stanley (CAY.L) in London. "Some form of coordinated response is necessary, but we haven`t seen that yet."
Rising Anxiety
The market tailspin on Oct. 6 was linked to the sense of panic engendered by the rolling country-specific reactions. Last week, for instance, the market was shocked and surprised by an €11.2 billion ($15.3 billion) part-nationalization of Fortis bank (BusinessWeek . com, 9/30/08), which signaled that bank`s balance sheet was in more trouble than previously thought. By Oct. 3, though, it became clear that more medicine was needed, and the Dutch government announced its intention to buy a 100% stake in Fortis` local operations for €16.8 billion ($22.9 billion).
More drama was to come over the weekend.
Tracked by: 0 Boarder
Darling warns Europe against unilateral action
By Gavin Cordon, PA
Monday, 6 October 2008
Chancellor Alistair Darling tonight issued a sharp warning to European leaders not to risk worsening the economic crisis by taking unilateral action to protect their own banks and depositors.
As stock markets around the world continued to plummet, Mr Darling told the Commons it was essential EU governments acted in a co-ordinated fashion if they were to avoid simply passing on problems to other member states.
In London the FTSE 100 Index slumped almost 8% in its biggest one day points fall ever, while in New York the Dow Jones Industrial Average fell below the 10,000 mark for the first time in four years.
The FTSE 100 also recorded its lowest level for four years and its biggest percentage drop since Black Monday in October 1987.
Mr Darling`s intervention came after the German, Danish and Greek governments became the latest countries to guarantee all depositors that their savings would be fully protected in the event of a bank collapse.
Following a similar move last week by the Irish government, it intensified pressure on the authorities in the UK - where deposits of up to £50,000 will be guaranteed from tomorrow - to follow suit.
Mr Darling said yesterday`s surprise announcement by the German government had been a "political declaration" of intent rather than a "legally binding" guarantee for depositors.
Nevertheless, he made clear his irritation at the actions of Berlin, just the day after Chancellor Angela Merkel took part in an emergency summit in Paris intended to co-ordinate the European response.
"It does demonstrate the problems that arise when member states take unilateral action because of course it does have a knock on effect for other member states. It does emphasise the need for us all to work together," Mr Darling told MPs.
"I think that it is very important, otherwise we will end up with a situation that is confused not just to depositors, but to the institutions themselves."
With EU finance ministers due to meet tomorrow in Luxembourg, Mr Darling welcomed a joint statement by European leaders acknowledging the need for "close co-ordination and co-operation" in future interventions.
He again emphasised commitment of the UK authorities to do "whatever is necessary" to maintain stability.
The Bank of England will inject another £40 billion into the markets tomorrow, with such operations set to continue into November, while the Financial Services Authority is consulting on whether further to raise the guarantee for depositors.
With Mr Brown at his side, Mr Darling also confirmed the Government will publish the Banking Bill tomorrow giving the authorities additional powers to intervene in failing banks.
The Chancellor refused to be drawn on calls by the Tories and Liberal Democrats for the Government to take shares in the banks - effectively part-nationalising them - in order to provide them with new capital
He said that the Government would act "quickly and and decisively" when it had proposals to bring forward, warning that speculation - as happened after the initial publication of the US bail-out plan - could cause further instability.
"We have looked at what happened in the United States, nothing is worse than coming forward with a plan that isn`t sufficiently developed, where questions cannot be answered," he said.
"That ended up with 1.5 trillion dollars being lost as a result of what was going on in the market over the ten days that followed."
He ruled out, however, a call by Liberal Democrat treasury spokesman Vince Cable to re-write the Bank of England`s remit to enable it to slash interest rates in a bid to re-start the economy.
"I don`t think that if you establish an independent central bank distant from government, that you should change its terms of reference just because times are difficult."
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In reply to:
Black Monday II: the worst for decades
Posted by : sambala
European Banks: The Bailouts Continue
A series of government interventions are in the works as investors and politicians realize Europe is facing a banking crisis of its own
If the $700 billion mortgage bailout plan in the U.S. was supposed to calm global investors, someone forgot to tell Europe. Stock indexes from Paris to Frankfurt plunged as much as 9% on Oct. 6 over worries of a spreading crisis among European banks. A series of government interventions over the weekend and on Monday—following last week`s sudden bailouts and guarantees (BusinessWeek . com, 9/29/08)—only seemed to fan the flames of anxiety.
Investors and politicians are waking to the realization that Europe faces a banking and economic crisis of its own not linked solely to bad U.S. subprime debt. Since the credit crunch first hit 15 months ago, lending in the Old World has gotten tighter and tighter, and now the lack of capital flow is taking down globe-straddling European banks, threatening businesses with credit starvation, and roping in cash-strapped governments for multibillion-dollar, 11th-hour rescues.
"Banking is like religion: It`s all about trust and confidence," says Bob McDowall, European research director at financial-services consultancy Tower Group in London. "Governments and regulators are trying to demonstrate firm leadership and show confidence, but banks don`t trust each other."
Exposing Deep Holes
That lack of trust is a major cause of Europe`s worsening bank crisis. Aside from a few exceptions such as UBS (UBS), the Old World`s financial institutions weren`t as exposed to toxic mortgages as their American counterparts, and they`ve had a year to clean up their balance sheets. But the sudden nosedive in the U.S.—especially the collapse of Lehman Brothers—has virtually frozen European lending and exposed deep holes at institutions such as Belgium`s Fortis (FOR.BR) and Germany`s Hypo Real Estate Group (HRXG.DE).
Complicating the picture in Europe is that no central mechanisms exist to carry out a coordinated regionwide response of the sort engineered in the U.S. The European Central Bank has a more limited mandate than the Federal Reserve, and no EU equivalents exist to the U.S. Treasury Dept. or Securities & Exchange Commission.
That has left governments to tackle the crisis on a country-by-country basis, with sometimes divergent solutions that can even make matters worse for neighboring countries. A weekend meeting in Paris of top European leaders, called by Nicolas Sarkozy, the President of France and current holder of the EU`s six-month rotating presidency, made no evident progress in hammering out a framework for a regional solution.
"Europe`s piecemeal approach hasn`t helped build confidence," says Jeremy Batstone-Carr, director of private client research at stockbrokers Charles Stanley (CAY.L) in London. "Some form of coordinated response is necessary, but we haven`t seen that yet."
Rising Anxiety
The market tailspin on Oct. 6 was linked to the sense of panic engendered by the rolling country-specific reactions. Last week, for instance, the market was shocked and surprised by an €11.2 billion ($15.3 billion) part-nationalization of Fortis bank (BusinessWeek . com, 9/30/08), which signaled that bank`s balance sheet was in more trouble than previously thought. By Oct. 3, though, it became clear that more medicine was needed, and the Dutch government announced its intention to buy a 100% stake in Fortis` local operations for €16.8 billion ($22.9 billion).
More drama was to come over the weekend.
