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pkang0202
Joined: 09 Mar 2007
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 Posted: Wed Oct 08, 2008 1:38 am Post subject: What's the deal with Europe's banks? |
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| We all know the US is struggling due to the subprime mortgages, but whats going on with the banks in Europe? |
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Temporary
Joined: 13 Jan 2008
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| Posted: Wed Oct 08, 2008 3:50 am Post subject: |
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You do know that banks borrow from each other right?
Interbank Loans are a big thing.
Thats a pretty self explanetory answer right there. |
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itaewonguy
Joined: 25 Mar 2003
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| Posted: Wed Oct 08, 2008 4:46 am Post subject: |
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Its a huge conspiracy!
rothchilds or rockerfellas etc..
A small group of bankers run it all.. |
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Justin Hale
Joined: 24 Nov 2007
Location: the Straight Talk Express
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| Posted: Wed Oct 08, 2008 10:18 am Post subject: |
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| Banks aren't lending to one another, nor to customers who want credit. Consequently, the entire system is imploding and we've seen a move towards state intervention (but only temporarily; the banks will be independent again and with stricter regulation - states will sell their shares and make a profit when their value returns). European states are generally in a very good position to do this, because their national debt is small in comparison to their GDP. |
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Juregen
Joined: 30 May 2006
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| Posted: Wed Oct 08, 2008 3:33 pm Post subject: Re: What's the deal with Europe's banks? |
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| pkang0202 wrote: |
| We all know the US is struggling due to the subprime mortgages, but whats going on with the banks in Europe? |
You think the Sub-Prime Loan thingy is an American problem only?
There is a financial tool called "Derivatives", and they created "secure" derivatives based on the Sub-Prime Loans.
Too bad the risks were embellished and far greater then anyone expected, with the result that banks aren't getting any money in, and are obliged to fulfill their obligations on those derivatives.
Since the entire world played with these derivatives, and other parts of the economy in the world depend on available liquidity (because that is the core of the problem) everyone is trying to cash in on their "bets" in the hope not to loose any more money.
People and institutions at this moment are HOARDING the CASH, which leads to people really needing cash to sustain everyday operations to topple over, with no real reason as such. |
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pkang0202
Joined: 09 Mar 2007
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| Posted: Wed Oct 08, 2008 3:56 pm Post subject: |
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http://www.guardian.co.uk/business/2008/oct/09/recession.housingmarket
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| Britain's rapidly deflating housing market, the vulnerability of the City and the poor state of the public finances will drive the economy into its first recession in almost two decades next year, the International Monetary Fund warned last night. |
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| It singled out the UK's housing market as a particular source of weakness, warning that it had experienced - together with Ireland and Australia - one of the largest "unexplained" increases in property prices over the past decade. In all three countries, the IMF said, prices were between 20-30% higher last year than could be justified by "fundamentals" such as rising population or higher incomes. |
Its not the banks, but the housing market that is pushing the UK into recession. According to the IMF. |
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tfunk
Joined: 12 Aug 2006
Location: Dublin, Ireland
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| Posted: Wed Oct 08, 2008 5:00 pm Post subject: |
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| About a week ago the Irish government had to bail a major Irish bank out of trouble. |
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Rae
Joined: 10 Oct 2007
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| Posted: Wed Oct 08, 2008 6:01 pm Post subject: |
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| pkang0202 wrote: |
http://www.guardian.co.uk/business/2008/oct/09/recession.housingmarket
Its not the banks, but the housing market that is pushing the UK into recession. According to the IMF. |
Thanks for posting this link. If you have any more, please post. Thanks! |
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Rteacher
Joined: 23 May 2005
Location: Western MA, USA
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seosan08
Joined: 10 Oct 2008
Location: Korea
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| Posted: Sat Oct 11, 2008 12:11 am Post subject: Don't Watch The Market- Watch The LIBOR Rates! |
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Dear Extended Family,
http://jsmineset.com/
Unless the LIBOR rate drops sharply we are facing a planetary financial crisis next week.
For God's sake protect yourself.
Gold and gold related items will be the only true storehouses of wealth. The bailout bill is powerless to reverse what is now happening.
This is a modern day Weimar happening right before our eyes.
Respectfully yours,
Jim Sinclair
******************************************************************************************
LIBOR, other interest rate indexes
By Bankrate.com
The LIBOR is among the most common of benchmark interest rate indexes used to make adjustments to adjustable rate mortgages. This page also lists some other less-common indexes.
http://www.bankrate.com/brm/ratewatch/other-indices.asp |
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seosan08
Joined: 10 Oct 2008
Location: Korea
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| Posted: Sat Oct 11, 2008 12:13 am Post subject: |
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Libor Dollar Rate Jumps to Highest in Year; Credit Stays Frozen
By Anchalee Worrachate and Gavin Finch
http://www.bloomberg.com/apps/news?pid=20601087&sid=aKWhtrBRTbwA&refer=home
Oct. 9 (Bloomberg) -- The cost of borrowing in dollars for three months in London soared to the highest level this year as coordinated interest-rate reductions worldwide failed to revive lending among banks for any longer than a day.
Attempts by policy makers to restore confidence to money markets are being stymied by almost daily crises among financial institutions. Iceland's government took over the nation's biggest lender today to keep the country's banking system working. American International Group Inc., the insurer taken over by the U.S. government, may need $37.8 billion of extra funds, the Federal Reserve Bank of New York said yesterday.
``To see little or no reaction in the fixings is very disappointing and reinforces the fact that Libor is broken and the transmission mechanism from central banks isn't working,'' said Barry Moran, a currency trader in Dublin at Bank of Ireland, the country's second-biggest bank. ``Things are still very stressed and we don't know what's going to fix it.''
The London interbank offered rate, or Libor, for three-month loans rose to 4.75 percent today, the highest level since Dec. 28. The Libor-OIS spread, a measure of cash scarcity, widened to a record. The overnight rate fell to 5.09 percent, still 359 basis points more than the Fed's 1.5 percent target rate...............
http://www.bloomberg.com/apps/news?pid=20601087&sid=aKWhtrBRTbwA&refer=home |
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