The systematic failure of an entire industry

BREAKING NEWS: Lombard Finance & Investments Ltd has suspended all payments of capital and interest to investors. “It is clear from recent events that this is a systematic failure of an entire industry, and from our perspective a moratorium is now the only responsible course of action,” said chief executive Michael Reeves.The finance company will […]

New Crisis, Old Isms

The Federal Reserve Bank’s decision last week to address the housing crisis by extending $200 billion of taxpayer-financed credit to Wall Street banks was met with a stunned reaction typical of surprising events. But really, the move was the expression of longstanding isms that routinely package corruption as sound public policy. Some background: During the […]

The Worst Conditions for the U.S. Economy Since the Great Depression

Mortimer Zuckerman, co-founder of Boston Properties Inc., the largest U.S. office real estate investment trust, said the U.S. economy is in a recession and there’s no sign of a recovery. “We are looking at the worst set of macroeconomic conditions since the Great Depression,” Zuckerman said in an interview with Bloomberg Television. Yesterday, the dollar […]

ING suspends NZ funds’ payouts because of turmoil

The New Zealand arm of Dutch financial group ING said on Wednesday it was suspending withdrawals from two investment funds worth $521 million because of the global credit market turmoil. It said the funds – the diversified yield and regular income – invested largely in credit securities, which had been hard hit by the subprime […]

Central banks make $250bn move to ease the credit crisis

Central banks make $250bn move to ease the credit crisisJoint action by US, UK, Europe and Canada; Dow Jones surges on news By Stephen Foley in New York Wednesday, 12 March 2008 Central banks around the world made a second co-ordinated attempt to ease the credit crisis, three months after their first efforts failed to […]

Derivatives the new ‘ticking bomb’

ARROYO GRANDE, Calif. (MarketWatch) — “Charlie and I believe Berkshire should be a fortress of financial strength” wrote Warren Buffett. That was five years before the subprime-credit meltdown. “We try to be alert to any sort of mega-catastrophe risk, and that posture may make us unduly appreciative about the burgeoning quantities of long-term derivatives contracts […]

Sorting Through the Rubble in Post-Bubble America

By MIKE WHITNEY”Market conditions are the worst anyone in this industry can ever remember. I don’t think anyone has a recollection of a total disappearance in liquidity…There are billion of dollars worth of assets out there for which there is just no market.” Alain Grisay, chief executive officer of London-based F&C Asset Management Plc; Bloomberg […]

International experts foresee collapse of U.S. economy

fctAdTag(“superbanner”,MyGenericTagVar,1); Posted By Hielema, Bert Posted 11 days ago And you thought that I had a gloomy outlook on the economy. Now the bad news pops up everywhere. Harry Koza in the Globe and Mail quotes Bernard Connelly, the global strategist at Banque AIG in London, who claims that the likelihood of a Great Depression […]

Hefty £283m writedowns in US push Taylor Wimpey into the red

By David Prosser, Deputy Business Editor Friday, 7 March 2008 Taylor Wimpey, the UK’s second largest housebuilder, yesterday declared a small loss for 2007 following close to £300m worth of writedowns on its trading in the United States. Taylor Wimpey, formed following the merger last July of Taylor Woodrow and George Wimpey, said it lost […]

Forex – Euro just off fresh all time high against dollar, rumours of US rate cut

London, Mar. 7, 2008 (Thomson Financial delivered by Newstex) — The euro was trading just off a fresh all time high against the dollar as odds of a rate cut in the 15-nation single currency zone looked increasingly bleak, while rumours circulated the markets that an emergency US rate cut could come this afternoon. The […]

Listed finance companies take beating

Fresh signs of stress are emerging in the finance company sector with two listed companies suffering sharp sell-offs yesterday as the credit crunch shuts down options for firms reliant on the domestic debenture market. Shares in Dorchester Pacific, which last week downgraded its profit guidance, fell as much 23 per cent, ending the day 13c […]

Troubles mount for Strategic Finance

Strategic Finance, owned by stricken Australian company Allco Finance Group, has virtually stopped long-term lending. It has switched its lending to short-term to match its borrowings which, like other finance companies, have contracted drastically as debenture holders baulk at reinvesting. The company yesterday cut its full year net profit forecast to $28.2 million from $31.2m, […]

Mide joins Blue Chip landslide with $11.6m losses

A company which was part of the franchise business of property investment specialist Blue Chip has gone into liquidation with losses of $11.6 million and no prospect of any money for unsecured creditors. Mide Ltd, part of the New Zealand franchise group of companies involved with Blue Chip, ceased trading on February 22 and went […]

The Federal Reserve’s rescue has failed

The verdict is in. The Fed’s emergency rate cuts in January have failed to halt the downward spiral towards a full-blown debt deflation. Much more drastic action will be needed.   The Federal Reserve building in Washington Read more from Ambrose Evans-Pritchard ‘Ninja’ loans explode on sub-prime frontline The latest news and views on the […]

MPs accuse regulators of being ‘deficient’

By Sean Farrell, Financial Editor Monday, 3 March 2008 The House of Commons Treasury Select Committee has criticised banks for ignoring warnings about risky lending, and hit out at regulators for not making sure that lenders listened to their concerns. In its second report into the causes and lessons of the market turmoil, the committee […]

After subprime debacle, U.S. wrestles with question of bank bailouts

John Key was working for banks who were at the forefront of those who developed these fantastic new financial innovations. He worked for the Bankers Trust; one of the first banks that started to experiment with these funky new “securitized investment vehicles”. In fact while working for Merrill Lynch he worked for a while as […]

Allco’s Value Getting Close to Zero

Oh oops, another one bites the dust. Terry McCrann of the Herald Sun referred to Allco Finance Group (ASX:AFG) as “Mini-Mac” the other day. What he meant was that the company has similarities to Macquarie Group (ASX:MQG). If we were Macquarie Group, we’d be downright insulted. How are the two similar? Well they’re both leveraged […]

Kiwi dollar falls sharply

The New Zealand dollar fell sharply against major international currencies overnight Friday as sliding United States equities increased investors’ risk aversion. Dollar picked to hit US85c The kiwi’s decline against the major three traded currencies came even as the greenback fell to record lows against the euro and a basket of currencies for a fourth […]

A&L shocks the markets with £185m write down

By Sean Farrell Financial Editor Thursday, 21 February 2008 Alliance & Leicester admitted regret about its investments in risky assets yesterday as it scrapped its profit target and said it would not compete strongly for new mortgage customers this year. The bank’s shares fell nearly 7 per cent to their lowest since 2000 after it […]

This reckless greed of the few harms the future of the many

Never in human affairs have so few been allowed to make so much money by so many for so little wider benefit. Across the globe, societies and governments have been hoodwinked by a collection of self-confident chancers in the guise of investment bankers, hedge and private equity fund partners and bankers who, in the cause […]

Countrywide: From bad to worse

NEW YORK (Fortune) — Countrywide on Tuesday reported a loss of $422 million in the fourth quarter and revealed that an astounding one-third of its investment portfolio’s sub-prime mortgage loans are delinquent. The loss threw cold water on Countrywide chief operating officer Steve Sambol’s confident assurances to investors in October that, “We view the third […]

House sale low is sign the tumble has started

The seven-year low in house sales last month could be a sign of prices falling for the year, says the Real Estate Institute of New Zealand’s national president. Traditionally, January has always been a weak time to sell, with holidays interrupting transactions but sales were unusually low at 5186 – the lowest since January 2001 […]

House prices, sales numbers dive

As America is collapsing under the mortgage meltdown, the sub prime crisis and the costs of two illegal wars, New Zealand follows suit. 15 Finance institutions disappeared overnight due to the sub prime crisis which is not just an American phenomena but a world wide hidden disaster finally crawling out of the wood works, houseprices […]

Who is John Key?

Special report on National leader John Key By GILLIAN TETT and RUTH LAUGESEN – Sunday Star Times | Sunday, 03 February 2008 FIRST LIFE: As a money trader in London it’s speculated John Key was earning $5 million a year – that’s $96,000 a week. AdvertisementHe used to work hand in glove with the foreign […]

Massachusetts Accuses Merrill of Fraud

The top securities regulator in Massachusetts accused Merrill Lynch on Friday of defrauding the city of Springfield with subprime-linked investments, casting light on how Wall Street banks sold complex mortgage securities that are now plummeting in value as the housing slump deepens. Skip to next paragraph Stephan Savoia/Associated Press William Galvin, Massachusetts secretary of state, […]

Why the attacks on 9/11 should still matter to New Zealanders today?

On 13 January 2008 in the first session of the year of the Japanese Defense and Foreign Affairs Committee  Senator  Yukihisa Fujita leader of the opposition who might very well one day become the prime minister of Japan made a presentation of evidence casting doubt on the official US version of the attacks on New York […]

Stagflation is Here

War—after all, what is it that the people get? Why—widows, taxes, wooden legs and debt. Samuel B. Pettengill “Armies, and debts, and taxes are the known instruments for bringing the many under the domination of the few. James Madison, 4th U.S. President (April 20, 1795) “Let me issue and control a nation’s currency and I […]

Message from Davos: The recession is coming

A full-blown, prolonged recession in America is now inescapable, with the rest of the world set to be dragged into a severe global slowdown despite yesterday’s emergency US interest rate cut by the Federal Reserve, leading economists said in Davos this morning. A darkening outlook for the global economy looked set to dominate the week-long […]