U.S. banking sector headed for meltdown, official says

Banks face massive loan losses because of defaults on debts and housing-price slide Duncan Mavin Toronto — The U.S. banking sector is headed for a credit downturn that will be “the worst in generations,” featuring widespread defaults on a range of debts and a national housing price slide not seen since the Great Depression, one […]

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 […]

Corporate Default Risk Soars to Record on Ambac Ratings Cut

By Hamish Risk and Abigail Moses Jan. 21 (Bloomberg) — The risk of European companies defaulting soared to a record on concern credit ratings cuts at bond insurers Ambac Financial Group Inc. and MBIA Inc. may trigger forced asset sales and worsen credit market turmoil. Credit-default swaps on the Markit iTraxx Europe index of 125 […]

Chinese shares close more than 5% lower

    BEIJING, Jan. 21 (Xinhua) — Chinese shares plunged more than 5percent on Monday, as investors dumped stocks amid liquidity concerns sparked by the huge share sale plan of Ping An Insurance.     The benchmark Shanghai Composite Index, which covers both A and B shares, tumbled 266.08 points, or 5.14 percent, to 4,914.44, while the Shenzhen Component […]

Housing: A Fresh Jolt of Bad News

Getty Images In case you were still harboring a tiny bit of optimism about the U.S. housing sector, just take a look at a couple of headlines from Jan. 8. KB Home (KBH) President and Chief Executive Officer Jeffrey Mezger said in a conference call with investors that he sees “no sign” that the sinking […]

US Subprime Bailout Won’t Reverse Trend in House Prices

We can hardly bring our self to talk about America’s socialist subprime bailout. So we won’t spend much time on it! Don’t confuse the Hope Now Alliance of lenders, investors, and banks for a bunch of modern day capitalist altruists. A close examination of the plan offered by George Bush and Hank Paulson shows that […]

Bank loan funding costs at 10 year peak

The Good Returns mortgage rate table is awash with red this week as lenders push rates up even though there has been no change in the official cost of borrowing in New Zealand. A general re-pricing of home loan rates appears to be underway, with increases from some banks of up to 30 basis points, […]

Citigroup faces $15 billion writeoff: GS

By Jonathan Stempel NEW YORK (Reuters) – Goldman Sachs & Co on Monday downgraded Citigroup Inc (C.N: Quote, Profile, Research) to “sell” from “neutral,” and said the largest U.S. bank may have to write off $15 billion over the next two quarters as mortgage losses reduce earnings. The downgrade sent Citigroup’s shares down as much […]

CBI breaks with the US dollar

Could this be the beginning of the end of Dollar Hegemony?  The Central Bank of Iran says the process of converting the country’s dollar reserves to other foreign currencies has been completed. The process of diversifying Iran’s foreign exchange reserves by converting reserves held in dollars to other currencies is almost complete, Fars news agency […]

Key reveals briefing by SIS chief

The Security Intelligence Service has issued a rare public statement to dispel speculation it was involved in this week’s police operation that culminated in the arrest of 17 alleged activists. Yesterday, Prime Minister Helen Clark, who is the minister responsible for the service, refused to comment on National Party claims that the service had briefed […]

Goldman Sachs Escaped Subprime Collapse by Selling Subprime Bonds Short

Phew! That was close. For a moment there, it looked like the collapse of the subprime mortgage market was going to wipe billions off financial earnings for years to come. The bad debts were stacked up like poisoned berries gathered by a poison-crazed squirrel during the housing bubble of 2003-2006. Going bad – fast – […]

Central Banks to the Rescue With an Economic Bailout

This from quote Martin Hutchinson on the lively Prudent Bear site: “Once upon a time, governments didn’t do rescues. The great Robert Banks Jenkinson, Lord Liverpool in a prime ministerial speech to the House of Lords during the 1825 speculative bubble, said: ‘I wish it however to be clearly understood, that those who now engage in […]

Gulf funds drift away from dollar

 Dubai: Asset diversification by the Gulf sovereign wealth funds and the possibility that the Organisation of Petroleum Exporting Countries (Opec) will change the pricing of oil from the dollar to another currency could mean more trouble for the dollar.The dollar has been losing its charm as a reserve currency due to its persistent weakness against […]

Millionaire’s factory in the spotlight as concern mounts

In Australia, Macquarie Bank is known as the “millionaires factory” for good reason. In the past 10 years, it has come from nowhere to become one of the world’s most aggressive buyers of airports, toll roads, energy firms and utilities. If an asset has a reliable cash flow, Macquarie, it seems, has pounced. In so […]

The Maestro of Misery: Greenspan’s Dark Legacy

By STEPHEN LENDMANAfter retiring as the Federal Reserve’s second longest ever serving chairman, Alan Greenspan is now cashing in big late in life at age 81. He chaired the Fed’s Board of Governors from the time he was appointed in August, 1987 to when he stepped down January 31, 2006 amidst a hail of ill-deserved […]

The Fat Cats Protection League

Wherever you hear the words “free market”, you’ll find massive state handouts to corporations By George Monbiot. Published in the Guardian 4th September 2007 After my column last week, several people wrote to point out that the neoliberal project – which demands a minimal state and maximum corporate freedom – actually relies on constant government […]

New bank registered in New Zealand

JPMorgan Chase Bank has been registered as a bank in New Zealand, the Reserve Bank said. JPMorgan Chase Bank is incorporated in New York and will operate a branch in New Zealand. It intends to only operate in the wholesale market and will not have a retail business. There are now 17 registered banks in […]

Credit crisis strikes UBS, Citi, Credit Suisse

By Andrew Hurst and Christian Plumb ZURICH/NEW YORK (Reuters) – The credit crisis struck at the heart of the global financial industry on Monday as Swiss bank UBS AG said it faced a shock loss in the third quarter and Citigroup warned its profits had collapsed. UBS’s chief domestic rival Credit Suisse Group also said […]

Mortgages cause sleepless nights for homeowners

Home owners are becoming increasingly uneasy about keeping up with their mortgage repayments, a Research New Zealand survey says. The poll found home loan interest rates were a concern for 68 per cent of those with mortgages. The survey of social attitudes asked those with home loans if they were concerned that rising mortgage interest […]

John Howard Has No Control Over Interest Rates in Australia

Posted by Dan Denning on Sep 28th, 2007 Anyone know if the credit crunch is officially over yet? Just checking.The US Fed was busy pumping US$38 billion into the financial system in the last two days. “The Federal Bank of New York added US$6 billion in 14-day repurchase agreements, US$20 billion in 14-day repurchase agreements, […]

Forget plan to sell assets, Grey Power tells National

By Graham Stairmand WELLINGTON – Grey Power has warned the National Party it won’t win next year’s election if it intends selling state-owned assets. “Nobody will be naive enough to believe that this is not going to be a step to full privatisation,” said Graham Stairmand, national president of the politically powerful organisation which represents […]

US Dollar Dead as Federal Reserve Slashes Interest Rates

Bang bang. Or should we say, “cut, cut”. Either way, the US dollar’s dead. We were two-thirds right in our predictions yesterday. The Fed cut both the funds rate and the discount rate by 50 basis points—exactly as we said they would. The cut in the Fed Funds rate to 4.75% is the first in […]

Fears of dollar collapse as Saudis take fright

By Ambrose Evans-Pritchard, International Business Editor Last Updated: 7:29pm BST 19/09/2007 Saudi Arabia has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the […]

CREDIT WRAPUP-Credit fears spread, Australia quashes rumours

By Ian Chua HONG KONG, Sept 18 (Reuters) – Credit fears flared in Asia on Tuesday prompting Australia’s central bank to quash speculation that one or more regional banks had asked for emergency funding, a day after savers rushed to withdraw deposits from a British lender. Japan’s finance minister provided soothing words to investors, saying […]

Black day for shares as €4.5bn lost

By Brian O’Mahony, Chief Business Correspondent ON a black day for Irish shares a total of €4.5 billion was wiped off the value of the Irish Stock Exchange yesterday. Market sentiment was certainly not helped by fears that investors in one of Britain’s biggest mortgage lenders, Northern Rock, might lose their life’s savings as the […]

Real estate market ‘extremely quiet’

y Anne Gibson    A bank survey of residential real estate sector sentiment has presented a pessimistic picture, with many professionals saying the market has turned down fast. BNZ chief economist Tony Alexander released the monthly confidence survey this week. The survey went to 11,500 people, who were asked how their sector was going and […]

Rising Energy Costs Could Affect BHP Billiton, Rio Tinto Share Prices

Posted by Dan Denning on May 25th, 2007 Finding the lowest-cost producer is becoming increasingly important in the mining industry. Prices for base metals are high. Some of this comes from supply/demand dynamics. And some is the result of inflation (a deteriorating U.S. dollar.) Either way, the price signals in the resource market are telling […]

Investors to blame for not assessing the risks

The United States is not the only nation confronting a household debt crisis. We, too, have a subprime lending market and it is managed by our collective bag of finance companies. The collective sum of savings at risk in this sector is reported to be $16 billion. Put another way, that’s nearly a third of […]

Failing banks, toxic bonds and mortgage laundering

The Triumph of Structured Finance By Mike Whitney  The entire global financial structure is becoming uncontrollable in crucial ways that its nominal leaders never expected, and instability is its hallmark. The scope and operation of international financial markets, their “architecture”, as establishment experts describe it, has evolved haphazardly and its regulation is inefficient — indeed, […]