FRIDAY, OCTOBER 10, 2008
Gordon's "Falklands Moment"
He has invoked Anti-Terror laws against Icelandic Fundamentalists banks rather than normal bankruptcy procedures. He threatened to freeze the assets of other Icelandic owned companies, without any legal basis. Is he going to arrest Father Christmas at Hamley's if Iceland doesn't pay local councils for their losses?
Last night in a BBC interview, during which he smiled randomly like an over-medicated hypermaniac, he told Nick Robinson that "everything was being done" and that "I have to restore confidence in the banking system". Bonkers - bank stocks collapsed on the open this morning. "I" is the Prime Mentalist...Judgement Day : Lehman's CDS Auction Today
If you think it is bad now, imagine what it will be like if the reckoning for Lehman's Credit Default Swaps goes bad today. Many market players think this is the reason banks are hoarding cash, because no one really knows if these derivatives will settle without serious mishap.
Lehman's bonds are trading at 13c on the dollar - and there is $128 billion in bonds outstanding. The banking system is looking at booking a $100 billion hit today. There are an estimated 350 counterparties and nearly 2000 related securities.
Guido thinks that Greenspan could have been right on this, the risk has been distributed, it will hurt, hopefully only just wounds rather than causing major fatalities. If it goes smoothly we could be looking at a monster relief rally... but it is still a bear market...
Friday, 10 October 2008
Best comment of the day from Talwin:
"I notice over the past day or two some commentators wondering if by chance the current economic disasters might not turn out to be Brown's Falklands moment.
D'you know I think they're right. With Brown as Galtieri."
He is telling the people of Swindon that he has brought down oil prices"We’ve had some success in getting it down." Nothing to do with global recession reducing demand.
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