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 […]

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 […]

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 […]

London hedge fund Peloton liquidates $2bn flagship fund

By Nikhil Kumar and Stephen Foley Friday, 29 February 2008 One of London’s highest-profile hedge fund managers, fêted just last month as the most promising newcomer of recent years, is to wind up one of its funds – blaming the credit crisis for a major squeeze across the hedge-fund industry. Peloton Partners, co-founded by the […]

The fall of a financial model

Recent changes in the world economy and financial markets mark the end of the present standard model of financial capitalism, built up over the last decade or so. In this model, financial stability is mainly based on the self-regulation of the financial sector, which alone assesses the risks produced by its financial innovations. Moreover, the […]

Bankers, like gangs, just get carried away

“So long as the music is playing, you’ve got to keep dancing. We’re still dancing.” Chuck Prince, former chairman and chief executive of Citigroup, was interviewed by this paper only a month before the music stopped. A few weeks later he was out of a job. With these comments, he got to the heart of […]

Udate: US recession fears wipe £77bn from London shares

London’s FTSE 100 fell to an 18-month low as markets took a dim view of President Bush’s plan to fight off a US downturn Patrick Hosking and Leo Lewis About £77 billion was wiped from UK blue chip share values this morning as fears of a US recession reverberated around the globe, sending the FTSE […]

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 […]

Anatomy of a credit crisis

Northern Rock’s collapse and Citigroup’s disastrous losses stem from the same roots, planted a decade ago, but still not widely understood By Sean Farrell Published: 06 November 2007   With the credit crisis entering a new and possibly more dangerous phase, and Wall Street heads rolling left, right and centre, the question on everyone’s lips – […]

Rent rage in tight housing market

One in four New Zealand tenants suffer from “rent rage” – and the phenomenon is set to grow as more people are shut out of owning their own home. According to a national survey by property website allrealestate.co.nz more than half of the 170 online respondents expressed “anxiety” over their rental predicament, with rising rents […]

Update: National accused of running secret health agenda

12:12PM Thursday September 27, 2007 Tony Ryall The National Party is being accused of running a secret agenda after confirming it will scrap controls on doctors’ fees. Health spokesman Tony Ryall and Party leader John Key launched a discussion document, which made no mention of doctor costs. Mr Ryall insisted he had previously announced that […]

Anger at Nat plan to boost GP fees

Lots of promises, lower tax for the rich, privatazation of healthcare (like in America) yep John Key and nats are finally showing their true colors Public health groups are angry at National Party plans to remove caps on doctors’ fees if it wins next year’s election. National announced yesterday it would scrap the Government’s controls […]

From Prime to Subprime, America’s Home-Mortgage Meltdown Has Just Begun

by Eric Englund Inflation is an immoral tax that leads to immoral values ~ Anonymous South American banker Having been in the credit profession for the past 23 years, I have observed several cycles involving the loosening and then the inevitable tightening of credit-underwriting standards. Of course, the Federal Reserve stands at the epicenter of […]

Borrowers told to lie about wages

  Some people have been advised to lie to buy a house A BBC investigation has found evidence of serious mis-selling in Britain’s sub-prime mortgage market. Industry insiders have described how people have been advised to lie about their incomes to take out loans far bigger than they can afford. Half of all sub-prime mortgages […]

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 […]

Investor panic takes toll on Speirs Group

Palmerston North-based loss-making finance company Speirs Group says its investor roll has plummeted 35% in the past three months, its secured stock funding has reduced and it is grappling with the collapse of its rental car client. Speirs Group, made up of Speirs Finance, Speirs Nutritionals and Spiers Foods, posted a loss of $1.9 million […]

Prepare for prolonged turmoil, says US Treasury Secretary

From The Times September 18, 2007 Suzy Jagger and Gabriel Rozenberg Investors should brace themselves for a prolonged period of market turmoil, Henry Paulson, the US Treasury Secretary, said yesterday as he held emergency meetings with the Chancellor and the French Finance Minister. Mr Paulson flew to London to discuss the financial crisis with Alistair […]

Cullen planned $1 billion in tax cuts

The Government planned to deliver $1 billion in personal tax cuts at the last budget, but shelved the plan due to fears it would fuel inflation, official papers show. The papers, issued under the Official Information Act, show the Government last year considered a package of personal tax cuts that would have equalled the $1 […]

Fed to meet for US rate decision

The Federal Reserve is preparing to meet to decide whether US interest rates should be reduced from 5.25%. Most analysts believe the Fed will cut rates to try and prevent a housing market downturn and the credit crunch from severely denting the economy. By making money cheaper to borrow, people would spend and invest more, […]

Credit crisis: Meltdown!

In the past 100 years, the rollercoaster ride that is the world of high finance has seen some spectacular lows. Sean O’Grady looks back at four episodes that not only came to define their times but also served as lessons for the future Published: 15 September 2007 1907: The Bankers’ Panic Sometimes, all that is necessary […]

Bank of England in dramatic intervention

 Northern Rock forced to seek emergency funding · Savers are assured that their money is secure Ashley Seager Friday September 14, 2007 The Guardian The Bank of England was last night forced to hand emergency funding to one of Britain’s biggest mortgage providers – Northern Rock – as it became the first major financial institution […]

More Mortgage Lenders to Close as Impact of Real Estate Slump Hits

Posted by Bill Bonner on Sep 13th, 2007 The Dow bounced right back – up 180 points Tuesday. Gold soared over US$721. What do you think, dear reader? Both went up…but which is the surer bet? We have our opinion. What bothers us is that it is too obvious. Central banks and financial intermediaries have […]

Economic Crisis: The U.S. Political Leadership Has Failed

by Richard C. Cook Global Research, September 12, 2007 As the 2007 economic collapse picks up speed, it’s time to take a hard look at the performance of the U.S. national political leadership in meeting some of their most fundamental responsibilities. It’s time to face the fact of serious failure over the last quarter century. […]

Soup Kitchen U.S.A.

By Mike Whitney   “Credit booms do not end in inflation as most people believe. Credit booms ARE inflation that end in deflation. This credit boom is not any different.”   Mike Shedlock, “Mish’s Global Economic Trend Analysis”     09/11/07 “ICH” — – The days of the dollar as the world’s “reserve currency” may be drawing to a […]

Is Eating Local the Best Choice?

Those who say eating local is not always the best choice for the planet are forgetting one very important part of the equation: community. Some 30 years ago NASA came up with another BIG idea. Assemble vast solar electric arrays in space and beam the energy to earth. The environmental community did not dismiss NASA’s […]

Is China Dumping the U.S. Dollar?

« U.S. dollars change hands in Beijing, China. (STR/AFP/Getty Images) Is China Dumping the U.S. Dollar? September 10, 2007 | From theTrumpet.com Questions loom whether China is behind recent dollar sales—if it is, America’s way of life is about to change. The only question is how badly and how fast. By Robert Morley The U.S. […]

Nervous US investors start to fear recession

Friday’s news of a buckling United States job market sent stock investors running for the exits, and this week promises to be no less stressful as investors grapple with the increasing possibility of an economic recession. The weekend also gave investors time to reflect on news that US employers cut payrolls by 4000 jobs last […]