Telegraph
"Standard & Poor’s, the credit-rating agency, cut Latvia’s rating to “BB” and warned that its economy will contract by a further 16pc this year. The public debt will vault from 19pc of GDP last year to 80pc by 2011. “This very fast increase in debt is unprecedented,” said Moritz Kraemer, S&P’s head of sovereign ratings."
Monday, 10 August 2009
Sunday, 9 August 2009
IMF puts total cost of crisis at £7.1 trillion
Telegraph
"The staggering total is is equivalent to around a fifth of the entire globe's annual economic output and includes capital injections pumped into banks in order to prevent them from collapse, the cost of soaking up so-called toxic assets, guarantees over debt and liquidity support from central banks. Although much of the total may never be called on, the potential outlay still dwarfs any previous repair bill for the global economy."
"The staggering total is is equivalent to around a fifth of the entire globe's annual economic output and includes capital injections pumped into banks in order to prevent them from collapse, the cost of soaking up so-called toxic assets, guarantees over debt and liquidity support from central banks. Although much of the total may never be called on, the potential outlay still dwarfs any previous repair bill for the global economy."
Saturday, 8 August 2009
Big four banks reveal gaping wounds from reckless lending
The Times
"Britain’s top four banks laid bare this week the huge damage inflicted by the reckless lending that led to the credit crisis — but offered hope that the worst of the losses were behind them.The banks reported combined losses of £34 billion, but HSBC and Barclays, which did not take taxpayers’ money, disclosed healthy profits. Royal Bank of Scotland and Lloyds Banking group, the banks bailed out by the taxpayer, reported losses of £4 billion."
"Britain’s top four banks laid bare this week the huge damage inflicted by the reckless lending that led to the credit crisis — but offered hope that the worst of the losses were behind them.The banks reported combined losses of £34 billion, but HSBC and Barclays, which did not take taxpayers’ money, disclosed healthy profits. Royal Bank of Scotland and Lloyds Banking group, the banks bailed out by the taxpayer, reported losses of £4 billion."
Thursday, 6 August 2009
Rate-setters pump £50bn more into economy
Independent
"Bank of England rate-setters doused hopes of a rapid recovery today after a surprise move to pump an extra £50bn into the flagging economy.The decision - taking quantitative easing efforts to boost the money supply to £175bn - is the clearest sign yet that policymakers think the UK is still deep in the mire. ...The move confounds speculation before the Monetary Policy Committee's (MPC) latest meeting that QE could be paused amid encouraging signs from industry as well as rising house prices.But the MPC, which also left interest rates unchanged at their 0.5 per cent record low, said the recession "appears to be deeper than previously thought".
"Bank of England rate-setters doused hopes of a rapid recovery today after a surprise move to pump an extra £50bn into the flagging economy.The decision - taking quantitative easing efforts to boost the money supply to £175bn - is the clearest sign yet that policymakers think the UK is still deep in the mire. ...The move confounds speculation before the Monetary Policy Committee's (MPC) latest meeting that QE could be paused amid encouraging signs from industry as well as rising house prices.But the MPC, which also left interest rates unchanged at their 0.5 per cent record low, said the recession "appears to be deeper than previously thought".
Bank of England signals recovery is far from assured as it prints £50bn more
Telegraph
"The decision by the Bank's Monetary Policy Committee (MPC) to increase the scale of the unprecedented programme of printing money, or quantitative easing, from £125bn to £175bn was consented to by Alistair Darling, the Chancellor of the Exchequer. ....The stock market also rose but sterling fell on fears that pumping money into the economy will stoke inflation."
"The decision by the Bank's Monetary Policy Committee (MPC) to increase the scale of the unprecedented programme of printing money, or quantitative easing, from £125bn to £175bn was consented to by Alistair Darling, the Chancellor of the Exchequer. ....The stock market also rose but sterling fell on fears that pumping money into the economy will stoke inflation."
Tuesday, 4 August 2009
The banks must be forced to put their house in order
Independent
"The economy might not be experiencing a V-shaped recovery, but the banks which helped to cause this crisis certainly appear to be. Some of the largest investment banks on Wall Street have reported hefty profits in recent weeks. They were followed yesterday by Barclays and HSBC. .... Barclays and HSBC did not take capital from the Government, but they did avail themselves of the Bank of England's Special Liquidity Scheme. This support, along with the blanket public guarantee of their liabilities, has driven down the banks' cost of capital. New evidence also suggests investment banks on both sides of the Atlantic are making a killing from central bank quantitative easing schemes.In this context of massive public sector support, it is scandalous that the practice of paying staff excessive bonuses persists. These bankers should really be paying back their bonuses of previous years which, as we now see, were based on illusory profits, not raking in new ones."
"The economy might not be experiencing a V-shaped recovery, but the banks which helped to cause this crisis certainly appear to be. Some of the largest investment banks on Wall Street have reported hefty profits in recent weeks. They were followed yesterday by Barclays and HSBC. .... Barclays and HSBC did not take capital from the Government, but they did avail themselves of the Bank of England's Special Liquidity Scheme. This support, along with the blanket public guarantee of their liabilities, has driven down the banks' cost of capital. New evidence also suggests investment banks on both sides of the Atlantic are making a killing from central bank quantitative easing schemes.In this context of massive public sector support, it is scandalous that the practice of paying staff excessive bonuses persists. These bankers should really be paying back their bonuses of previous years which, as we now see, were based on illusory profits, not raking in new ones."
Tullett Prebon chief says economy is a 'mega disaster'
Telegraph
"Terry Smith, one of the city's leading financiers, has called into question the grounds for the recent rally in equities, saying it is likely to be "soaked up" by a flood of new share issues, while the real economy is a "mega disaster"."
"Terry Smith, one of the city's leading financiers, has called into question the grounds for the recent rally in equities, saying it is likely to be "soaked up" by a flood of new share issues, while the real economy is a "mega disaster"."
The Bank must keep the presses rolling
Telegraph
"A growing number now think the MPC will leave its Quantitative Easing programme unchanged. I have to say I suspect otherwise. It will be a close decision, and clearly it could go either way, but I feel the Bank has little option other than to extend the programme, raising the amount it will buy in bonds from the market from £125bn to at least £150bn."
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Comment: "Quantitative Easing" is devaluation in all but name
"A growing number now think the MPC will leave its Quantitative Easing programme unchanged. I have to say I suspect otherwise. It will be a close decision, and clearly it could go either way, but I feel the Bank has little option other than to extend the programme, raising the amount it will buy in bonds from the market from £125bn to at least £150bn."
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Comment: "Quantitative Easing" is devaluation in all but name
Nationalised Northern Rock's £724m loss as homeowners struggle to pay back mortgages
Daily Mail
"Government-owned lender Northern Rock reported a half-year loss of £724.2million today.
The Newcastle-based company also said the share of its mortgages in arrears had risen to 3.92 per cent by June 30, from 3.67 per cent three months before.Northern Rock - which was taken into public ownership in February 2008 - said it incurred an impairment charge on its loans of £602.2million and expected that figure to be similar in the second half."
"Government-owned lender Northern Rock reported a half-year loss of £724.2million today.
The Newcastle-based company also said the share of its mortgages in arrears had risen to 3.92 per cent by June 30, from 3.67 per cent three months before.Northern Rock - which was taken into public ownership in February 2008 - said it incurred an impairment charge on its loans of £602.2million and expected that figure to be similar in the second half."
Monday, 3 August 2009
Warning: Oil supplies are running out fast
Independent
"In its first-ever assessment of the world's major oil fields, the IEA concluded that the global energy system was at a crossroads and that consumption of oil was "patently unsustainable", with expected demand far outstripping supply.Oil production has already peaked in non-Opec countries and the era of cheap oil has come to an end, it warned.In most fields, oil production has now peaked, which means that other sources of supply have to be found to meet existing demand."
"In its first-ever assessment of the world's major oil fields, the IEA concluded that the global energy system was at a crossroads and that consumption of oil was "patently unsustainable", with expected demand far outstripping supply.Oil production has already peaked in non-Opec countries and the era of cheap oil has come to an end, it warned.In most fields, oil production has now peaked, which means that other sources of supply have to be found to meet existing demand."
Sunday, 2 August 2009
Factors that inhibit chances of rapid recovery in the US
Telegraph
"The 1pc drop in second-quarter GDP makes this the US's worst recession since the Second World War.Government stimulus spending has helped a bit, but US personal savings are still depressed and the federal deficit is huge."
"The 1pc drop in second-quarter GDP makes this the US's worst recession since the Second World War.Government stimulus spending has helped a bit, but US personal savings are still depressed and the federal deficit is huge."
Saturday, 1 August 2009
IMF puts UK banking bail-outs at £1,227bn
Telegraph
"Fresh calculations from the International Monetary Fund have revealed the full scale of assistance meted out to Britain's collapsed banking system. The Fund said that when one combines all the support for banks, including capital injections, the buying of frozen assets, Government guarantees and Bank of England liquidity provision, the total bill amounts to 81.8pc of gross domestic product – equivalent to £1,227bn."
"Fresh calculations from the International Monetary Fund have revealed the full scale of assistance meted out to Britain's collapsed banking system. The Fund said that when one combines all the support for banks, including capital injections, the buying of frozen assets, Government guarantees and Bank of England liquidity provision, the total bill amounts to 81.8pc of gross domestic product – equivalent to £1,227bn."
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