Tuesday 17 February 2009

Another tidal wave is coming

O tempora, o mores.
A drunk/chilling Japanese Minister of Finance has to resign, the Russian oligarchs are vanishing, there is an anti-bonus fever, bankers have to appear in front of politicians (who belies who?), and nobody likes stocks anymore.
Our attention is drawn to Europe where new tidal waves seem to hit banks again. We read this morning that Santander seeks to halt payouts from the Santander Banif Immobiliario FII fund after investors sought to withdraw 80% of the vehicles capital at once. And in the background an Eastern European crisis is brewing for Western European banks.

From Bloomberg:

Banks from Austria, Italy, France, Belgium, Germany and Sweden account for 84 percent of western European bank loans in eastern Europe. The region’s economies are weakening, with the International Monetary Fund already offering aid to Latvia, Hungary, Serbia and Ukraine. Bailouts may be extended to Bulgaria, Romania, Lithuania and Estonia as the global recession derails more banks, according to Capital Economics research…

Result of the turmoil?
The price of gold is soaring.
On a moment that everybody was waiting for a technical correction of the gold price, the events everywhere seem to generate momentum for gold to soar and approaching the magic 1K which attracts as a magnet.
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