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16 Jun 2008: Latest Writedowns News

16 Jun 2008: Latest Writedowns News

The following are the links regarding the global credit crunch that have been recently added to the Credit Crisis Timeline. The full timeline is accessible here 2008 06 05 MBIA, Ambac, $1 Trillion of Debt, Lose S&P AAA Rating2008 06 05 MGIC, PMI Downgraded by Fitch on Poor Underwriting2008 06 05 Frank-Dodd Rescue Prolongs Housing Crisis by Deferring Defaults2008 06 […]

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Investors in Financials lose $10 billion

Investors in Financials lose $10 billion

The Financial Times’ blog Alphaville is reporting today that those investors who ponied up for shares in financial institutions after the financials wrote down billions and needed additional capital – those investors – lost $10 billion! Basically, its like throwing good money after bad. Investments in many of these institutions is dead money until the writedowns stop. Investors who backed […]

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Ireland No to Europe: Commentary

From the Telegraph: Irish right to craic the whip over EU treaty By Liam Halligan Last Updated: 1:38am BST 15/06/2008 Against the advice of the major political parties and most of the media, Irish voters have rejected the Lisbon Treaty. Good for them. That’s a perfectly reasonable response to an agreement which is not only absurdly complex, but also replicates […]

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European banks: still undercapitalised

European banks are still in need of time or money to recapitalise their weak balance sheets. This has to be especially worrying for UK banks as they have raised a significant amount of capital and their housing market has yet to see the level of write-offs that the U.S. housing market has engendered. The FT argues that this under-capitalisation goes […]

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Chart of the day: US Household debt

Chart of the day: US Household debt

This post is part of my chart of the day series.

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Royal Bank of Canada: time for takeover talks

Royal Bank of Canada: time for takeover talks

The Globe & Mail has a storyline out today that caught my eye. It suggests that Royal Bank of Canada (RBC) would find some god takeover opportunities in the US. While I dismissed a similar storyline regarding UBS in Europe from the Financial Times, the Globe & Mail story does make sense. This past week, the FT suggested that UBS […]

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UK house prices need to fall up to 63%

UK house prices need to fall up to 63%

According to the Daily Mail, house prices need to fall by a lot more than the 8% to date in the UK in order to make them affordable for first time home buyers. The 63% number comes from the least affordable borough, Westminster in London, where prices would need to drop by £400,000 or 63% to make them affordable. SourceHouse […]

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Ireland faces two-year recession

Ireland faces two-year recession

That’s what Sir Howard Davies, a former deputy governor of the Bank of England (BoE), has to say.

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Chart of the day: Inflation

Chart of the day: Inflation

Inflation is clearly still a problem. The CPI for May 2008 was released by the BLS today showing consumer inflation rising at a 4.2% rate y-o-y, unadjusted for seasonal factors. This is either good news or bad news, depending on how you look at the finer details. The stock market chose to view this report as generally positive and rallied […]

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The Japanese Problem is now ours

The Japanese Problem is now ours

Ben Bernanke claims to be an expert student of the Great Depression and its causes. Therefore, many feel comforted that he knows what to do should in order to avert a repeat of 1929. But does he know how to prevent a repeat of the Japanese Problem?

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Ireland votes No on Lisbon Treaty

The Lisbon Treaty, which was to give the European Union more say over matters in EU member states received a vote of no confidence from Ireland. The result was 52% against and 48% for. Just as with the EU constitution, there is great resistance from member states to the bureaucratic control of the EU over political and social affairs. What […]

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Is the Fed going to raise rates?

No! The Fed is not crazy. Market participants are forgetting that the U.S. economy is still not out of the woods. Moreover, many financial institutions are drowning in writedowns. None of this should be expected to change anytime soon. Yet, the market now expects the Fed to actually raise rates. Yes, inflation is rising, but the Fed knows deflation from […]

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