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Monetary System
More on HBOS
The Lex column in Yesterday's FT highlights what many market players are thinking about the company's £4 billion ($8 billion) rights issue: the economic outlook in the UK is worse than feared."The main potential explanation for the apparent…
HBOS to raise new capital
As I predicted on Saturday, HBOS has got caught up in the global mortgage meltdown. Bloomberg reports:HBOS Plc, the U.K.'s biggest mortgage lender, will sell 4 billion pounds ($8 billion) of shares to bolster capital depleted by asset…
Another massive write-down: Deutsche Bank
Deutsche Bank released earnings that showed a loss for the first time in five years as they wrote down $4.2 billion in equity as a result of the global credit crisis. While Deutsche Bank has got off well because of reduced exposure to…
Santander: US, Spanish and UK mortgage exposure
If you are looking for companies that have yet to write down massive amounts of losses in this global credit meltdown, look no further than Banco Santander. The Spanish Bank holds a major position in the Spanish mortgage and construction…
Where’s HBOS?
Looking through old e-mails, I read an article from the FT in 2006 that surfaced claiming that HBOS (Halifax Bank of Scotland)were poised and ready to go offer loans for 125% of value. That's right, HBOS thought it a good idea to cover 95%…
Liquidity trap of a different sort
As the Fed Funds rate gets close to zero, pundits have been worrying about a pending liquidity trap. While I think these worries are well placed because the Fed is running out of bullets, I am more concerned about inflation right now.…
RBS takes an enormous hit
RBS, the second largest British bank behind HSBC, has finally come clean on the credit crisis. The price? An enormous $24 billion in new capital needed. This is a huge story because this does not even begin to discount the credit problems…
Finding a bottom
As the writedowns at global financial institutions near $300 billion in capital lost as a result of the sub-prime crisis, the question as to when we reach a bottom is ever more urgent. Market history tells us that the severity of the bust…
We need humility
Today, as I write this blog entry, the U.S. Economy is in crisis. We have a massive consumer and mortgage debt problem. Gasoline and food prices are going through the roof. The U.S. dollar is plunging. People are losing their jobs and…
Panic Time at the Fed
Steve Hanke, a libertarian economist who writes for Forbes, argues that the Fed is panicked about the economy in a piece that came out today. He believes they have lowered the Fed Funds interest rate to where inflation is now a problem.…