mardi 1 juillet 2008

Crash news



Critics of Marxism are keen to point out that lefties have predicted seventeen of the last three recessions. It's a cliché to even say it's a cliché but when the snouts themselves start to get nervous it's another thing altogether. This story hasn't got much exposure in the Anglo-Saxon press but in Holland it's created a bit of a stir. The basiscs are that a top Dutch bank, Fortis, is about to go bust and trying to raise billions of dollars in the US. The bank's 'big in Belgium' and the Belgian papers are full of disaster front pages that say the institution is about to run out of cash.

What's more worrying for savers is that, like a Prime Minister saying 'I fully support the honourable gentleman', "the national oversight commission CFBA felt compelled to issue a statement of reassurance to the desperate savers. “The emergency measure by Fortis is no reason to run to the bank and withdraw your savings”, said a CFBA spokesman.

Which is as good as saying 'Run on the bank. It's everyone for themselves.'. With the European stock markets deeply in the red so far this morning, this isn't proof that Marx got it totally wrong.


Also this, "Bank for International Settlements: annual report The Bank for International Settlements (BIS) says global markets may still be set for severe economic downturn. Last year, when inflation was low and the world economy was still strong and stable, BIS gave a a prescient warning about the growing risks that could bring it all undone. In its latest annual report, released last night in Basel Switzerland, BIS gives a grim and candid assessment. "The facts suggest that the magnitude of problems to be faced could be much greater than many now perceive... while difficult to predict, their interaction does appear to point to a deeper and more protracted global downturn than the consensus view seems to expect," the report says in part. Despite this, it cautions against using rate cuts to bail out the world economy, arguing that loose monetary policy helped create the mess in the first place. Satyajit Das is a risk analyst who tipped the global credit crisis. "It's an extraordinary statement of just how close the world economy is to a total financial meltdown" he said. Associate Professor Dick Bryan, an economist from the University of Sydney, uses the same adjective. "It's a quite extraordinary message," he said. "It's a big statement that the world economy could potentially be facing one of the biggest crises for the last 150 years." "


Again, try not to gloat just keep away from sky-scrapers for the next couple of days.