Rolf Englund IntCom internetional
En ettåring som ingen firar
Ett år har gått sedan den globala kreditkrisen blossade upp, snabbt och häftigt. Och krismolnen hänger fortfarande tunga över finansmarknad och världsekonomi.
How the world changed one day last summer.
It can be tricky trying to pin down the beginning or end of world events. When asked about the impact of the French Revolution nearly two centuries later, Zhou Enlai replied: "It is too soon to tell."
Still, the birth of the credit crunch—the child of a burst bubble in housing—can be traced to a Thursday last summer, a day when many Wall Street executives, bankers, and government officials were enjoying their vacations.
On August 9, 2007, it became clear that fear had paralyzed the world's credit markets.
In 1989, Mrs. Thatcher went to Paris for the G-7 conference. President Francois Mitterrand had decided to use the summit to showcase the bicentenaire of the French Revolution.
A year since the credit crunch burst upon an unsuspecting world, the big questions remain unanswered.
The central banks' measures to return the money markets to normality by injecting massive amounts of liquidity have been at least partially successful.
Moreover, even if the liquidity crisis may be past its worst, the housing crisis has only just begun.
We are all Keynesians again
ON AUGUST 9th 2007, after an alarming leap in interbank interest rates, the European Central Bank signalled its readiness to provide the banking system with the liquidity it suddenly lacked.
The financial system was not as robust as most regulators thought.
The reason for saving a big financial institution that gets into trouble is the economic havoc its failure can cause. The historically minded need no reminding of the Great Depression—least of all Ben Bernanke, the Fed’s chairman, an expert on the subject. It seems plausible that, even if the risk of catastrophe is slight, no chances should be taken.
The idea of giving central banks independence was that they would take decisions from which politicians would shrink. The central banks’ credibility depends on being prepared to do two unpopular things:
It is almost exactly a year since the European Central Bank was forced to inject €95bn into the eurozone banking system, bringing home what many had suspected – that the fallout from the US subprime mortgage crisis in the US was causing serious pain to global financial markets.
Cramer Day is upon us.
The Federal Reserve was “asleep” and that there was “Armageddon” in the fixed income markets. It was possibly the most entertaining five minutes of financial television ever broadcast.
Those who do not work in a Wall Street trading room and have not watched the excerpt repeatedly over the past year, can watch it on YouTube (search for Cramer, Bernanke and Burnett) where it is a popular view.
He implicitly took a strong stance on the issue of “moral hazard” – the theory that insurance, particularly when offered for free by governments, will encourage excessive risk-taking, and so bailouts should be avoided.
He was angered by the way “my people” – friends in Wall Street – were hurting, that the Fed had “no idea” how bad things were, and that Ben Bernanke was “behaving like an academic”.
Bloomberg is reporting Banks' Subprime Losses Top $500 Billion on Writedowns.
it is going to be increasingly difficult for banks and brokers to raise the capital required to support the expected losses.
Credit crunch a year on: The losers
8 who saw the crisis coming... and 8 who didn't