Don’t be fooled – the worst is still ahead of us.
A prediction that cannot be ignored as we receive the news over Anglo Irish Bank. My favorite bank. Where’s the time of the liquid lunches? 3 Guinness and 1 Irish coffee, chicken wings included. And then strolling back to the office in the IFSC.
Don’t be fooled – banks and other financial institutions are still sinking. We’ve lost AIG (ticker: AIG), Lehman (ticker: LEH), Bear (ticker: BSC), Merrill (ticker: MER), Fannie (ticker FNM), Freddie (ticker: FRE). This week we lost Citigroup (ticker: C) and now it ‘s up to Bank of America (ticker: BAC).
Citi just reported a loss of 8.29 bln USD.
At the end of the day we will end up with one or two ‘super’banks. It’s amazing we don’t hear something about JP Morgan Chase (ticker: JPM). Yet…
Indices tracking the distressed assets fell sharply this week, pointing to further detoriation of the balance sheets of financial institutions
Yesterday the ECB brought down rates with another 50bp to 2%. Since October the reference rate went down with 225%. This is the lowest level in more than 3 years. However, rather than being pro-active and bringing rates below the inflation level, the ECB prefers to sit back and observe how bad things get before cutting again. With 22 members trying to figure out what is happening, we understand this kind of non-action. But we don’t mind: the market will do their job instead.
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