Tag Archive for banks

Banks, Financial Crisis and Capitalism

I was reading recently an article regarding the imminent bankrupcy of the emerging markets (especially the ones from Eastern Europe). The author said in his investment blog that banks are now forcing up the interest rates in those countries. The increase in the interest rates would lead to a wave of personal bankrupcies in those markets, allowing the foreign investors to buy the local assets (especially the real estate assets from those emerging markets) very cheap. The scenario would be unfolding as we speak, whilst the peak of the crisis in the Eastewrn Europe should arrive somewhere in the middle of 2010.
The fallacies of this story are many. I will not enter into the details of the cosnpiration theory which seems to hide behind this pessimistic approach to the Eastern Europe economies. I will also not discuss here the fact that it is hard for the big banks to cooperate among them. Or the bank cooperating with the big investment funds, their competitors, would be a highly unlike – ier scenario. I will just mention the recent lessons that Dubai and Greece, two sovereign countries, whose recent developments are linked tot tourism and real estate investmentst, taught us. Read more

Banks Coming Back To Profit

bank-of-americaBanks will be in the S&P’s 500 spotlight this week as they release their quarterly earnings one by one. The question of the various analysts is whether the surviving financial institutions will repeat the performance of the first quarter, when they surprisingly posted profits. Read more

IMF Reccomends Stronger Measures to Fight the Global Financial Crisis (2)

We come back to the IMF handbook published on April 2009, called “Global Financial Stability Report”. This time, we make refference to its reccomendations.

But before this, a new estimation of the IMF on the global write downs of assets. In January 2009 IMF estiamted the bad assets writing off to around $2.7 billion in the US only. In this latest report, the estimations included also other mature market-originated assets, which could increase the total write offs to around $4 billion. In other words, $4 billion of the US economy has been wiped off by the financial crisis (or will be, total until the end of 2010). Scary, isn’t it? Read more