IMF warns of world systemic meltdown

[HarryBosch]

IMF warns of world financial system ‘meltdown’

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3181004/IMF-warns-of-world-financial-system-meltdown—Financial-crisis.html

The International Monetary Fund has warned that the world financial system stands on the “brink of systemic meltdown”, despite international efforts to bring the crisis to an end.

Dominique Strauss-Kahn, the IMF’s managing director, made the comments after talks with US President George W Bush and other leading finance minister in Washington as they tried to find a solution to the global financial turmoil, which has seen stock markets around the world plunge on fears of recession.

He said: “Intensifying solvency concerns about a number of the largest US-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown.”

The IMF also warned global equities could plunge by a further 20 per cent in the coming days unless governments deliver concrete action to address the crisis.

At the meeting of finance ministers from the Group of Seven leading world economies, including the UK and US, world leaders pledged to part-nationalise swathes of the global banking system as part of a drastic international plan to halt the panic gripping financial markets and prevent the crisis from descending into a global depression.

Finance ministers from the Group of Seven leading world economies, including the UK and US, said they stood ready to pump public money into banks in order to prevent them from collapse.

The agreement came as Chancellor Alistair Darling admitted that the UK was facing “turbulence the like of which we have never seen” after markets ended their worst week in history, with shares having fallen by more than a fifth on all leading stock exchanges.

The G7 presented a five-point “Plan of Action” to arrest the turmoil, including, most significantly a promise to “ensure that our banks…can raise capital from public and well as private sources, in sufficient amounts to re-establish confidence and permit them to continue lending to households and businesses.”

It leaves the G7 – which also includes Japan, France, Italy and Canada – open to start buying bank shares with taxpayers’ cash.

US Treasury Sectretary Hank Paulson said he was preparing to use the American $700bn bail-out scheme to fund buying troubled banks’ shares. It mirrors Gordon Brown’s £50 billion bail-out of Britain’s struggling institutions unveiled earlier this week.

With investors gripped by panic, the FTSE 100 has fallen by 21 per cent this week, and yesterday alone suffered a drop of 8.9 per cent – the third biggest in history.

Despite assurances from President George W Bush, shares in Wall Street fell for an eighth successive day on Friday, while the pound and the euro slumped against other currencies.

The agreement produced last night by finance ministers in Washington is thought to represent a last-ditch attempt for governments to prevent the financial crisis from worsening yet further next week. Some experts fear that unless it succeeds in boosting confidence the financial system may collapse entirely, threatening a worse economic slump than was experienced in the 1930s.

The G7 statement, which was among the most eagerly awaited in recent history, said: “[We agree] today that the current situation calls for urgent and exceptional action.”

Mr Paulson described the G7 statement as “an aggressive action plan to address the turmoil in global financial markets and the stresses on our financial institutions.”

Among the five pledges was a promise to protect savers’ deposits when banks collapse.

It came after Mr Darling and Bank of England Governor Mervyn King pledged to do everything in their power to prevent economic catastrophe. On a frenzied day in financial centres across the world, Mr Darling urged his fellow ministers to “step up to the mark and do something”

Fears will remain about whether the plan is enough to arrest the decline in shares, since the UK plan did not prevent further falls in equities. However, the plan is as far-ranging and dramatic as many, including Mr Darling, had hoped.

Around $4,600 billion has been wiped off the value of shares worldwide this week – more than one and a half times the total amount of cash generated by the UK economy last year.

Experts said yesterday that confidence was unlikely to return to markets until they were convinced that all major economies would take similar forthright steps to rescue the global banking systems.

On a frenzied day in financial exchanges throughout the world:

– The FTSE 100 dropped beneath the talismanic 4,000 mark for the first time since 2003, dropping 381.74 points to 3932.06. Money markets remained frozen.

– The pound dropped to its weakest level in five years, slumping below $1.70 against the dollar. By last night it was down almost a cent and a half to $1.69485.

– Oil prices dropped beneath the $80 a barrel mark for the first time in a year.

– President George W Bush pledged to end the vicious cycle of “uncertainty and fear” but offered no new remedies for the problem. Presidential candidate Barack Obama urged G7 ministers to do something to end the turmoil.

– The Icelandic Prime Minister admitted domestic customers will get priority over British savers as the country’s banks are wound up. It also emerged that the International Monetary Fund has sent emissaries to Iceland, and may arrange a bail- out package within days – the first IMF rescue of a major economy since Britain in the 1970s.

As he went into the G7 meeting, held alongside the annual IMF meetings in the US capital this weekend, Mr Darling said the world stood on a dangerous tipping point.

“We like everybody else have been affected by turbulence the like of which we have never seen,” he said. “We need to strengthen the financial system,” he said. “If international co-operation is to mean anything it means governments need to move on from talking about a general approach and actually doing something to resolve the problems that we face.”

With the financial turmoil worsening by the day, fears are growing for the health of the wider economy. Most economists now believe the UK is already in recession, and the International Monetary Fund this week slashed its forecasts for British economic growth by more than any other advanced economy. With businesses unable to get finance, there are now fears the UK could suffer a depression that lasts not for months but for years, with rising unemployment and falling profits.

Mr King said: “Central banks will work together as we demonstrated this week, to ensure sufficient short term liquidity is provided to stabilise banking systems. But it is also vital that governments work together to ensure their banking systems are recapitalised to enable them to lend to finance spending in the real economy.”

[Arraya]

File this under “Oh, now they tell us”

[Arraya]

File this under “Oh, now they tell us”

[Arraya]

File this under “Oh, now they tell us”

[Arraya]

File this under “Oh, now they tell us”

[Arraya]

File this under “Oh, now they tell us”

[HarryBosch]

Thanks arraya 🙂 – I needed a good laugh.

[HarryBosch]

Thanks arraya 🙂 – I needed a good laugh.

[HarryBosch]

Thanks arraya 🙂 – I needed a good laugh.

[HarryBosch]

Thanks arraya 🙂 – I needed a good laugh.

[HarryBosch]

Thanks arraya 🙂 – I needed a good laugh.

[Arraya]

This guy has called this train wreck every step of the way.

http://theautomaticearth.blogspot.com/

I don’t know guys, I smell fish around here. The Fannie and Freddie swaps auction on Monday returned 90+ cents on the dollar, and the same auction for Lehman on Friday lost 90+ cents on the dollar.

So I ask myself: who’s doing the buying? Now, it was clear from the get-go that Paulson et al were in on picking the Fan&Fred party music; who else overpays 800% or more on toilet paper? That’s just got to be someone playing with other people’s money. That doesn’t just smell like fish, that is a all-out glib bald mackerel. Insert Hank the Hammer pic.

A more realistic valuation came in the Lehman “settlement” [sic]. 8.5 cents on the buck. Ya-bleeding-bleeping Hoo!

Nah, want to know what I think? I think the banks and funds bought back their own swaps in that one. You know, save face, and all that. Besides, who cares anymore? They buy it back, and Monday morning Paulson offers to get it off their sheets, at the same 800% overpay, with your money. Dead Stinky Fish. Glib and salty.

Henry got another little sideshow set up as well. Forget about the $700 billion Roman Dictatorship Proclamation. Now, Fannie and Freddie, on top of that fully loaded chewed-up tobacco spit-ball on the Constitution, are forced to buy up half a trillion dollars worth of mortgage toilet paper over the next year, and that amount could grow beyond infinity.

Don’t bother checking for your wallet; you gave it away last week, remember?

Now I see otherwise sane people claim that these auctions confirmed some sort of value for the swaps, and I just ain’t getting that. Don’t they understand how rigged the game is by now? Karl, wake up!

Yes, I agree, the paper needs to be exposed. But that doesn’t offer any hope; it will mean the end of banking as we know it. Which in turn will signal the end of society as we know it. The whole economic system is gone, it’s sleeping with the fishes.

$5 trillion vanished from the stock markets in one week, and I bet you, there’ll still be folks talking about (hyper-)inflation. Who needs logic anymore to make sense of the world around us? When faith can do it?

If nobody’s left who can afford to make an offer on your home, it’s worth nothing. The markets work, just not the way we’d like.

And if nobody offers anything for casino toilet paper, then that isn’t worth dick-all either. And since any value we assign to people these days, and the environment, and food, and drinking water, all is calculated as all other commodities, in a market that is dying, none of it all has any value left.

You now cost more to maintain than you deliver in productivity.

You have been written off.

And so have your kids.

The markets do work.

[Arraya]

This guy has called this train wreck every step of the way.

http://theautomaticearth.blogspot.com/

I don’t know guys, I smell fish around here. The Fannie and Freddie swaps auction on Monday returned 90+ cents on the dollar, and the same auction for Lehman on Friday lost 90+ cents on the dollar.

So I ask myself: who’s doing the buying? Now, it was clear from the get-go that Paulson et al were in on picking the Fan&Fred party music; who else overpays 800% or more on toilet paper? That’s just got to be someone playing with other people’s money. That doesn’t just smell like fish, that is a all-out glib bald mackerel. Insert Hank the Hammer pic.

A more realistic valuation came in the Lehman “settlement” [sic]. 8.5 cents on the buck. Ya-bleeding-bleeping Hoo!

Nah, want to know what I think? I think the banks and funds bought back their own swaps in that one. You know, save face, and all that. Besides, who cares anymore? They buy it back, and Monday morning Paulson offers to get it off their sheets, at the same 800% overpay, with your money. Dead Stinky Fish. Glib and salty.

Henry got another little sideshow set up as well. Forget about the $700 billion Roman Dictatorship Proclamation. Now, Fannie and Freddie, on top of that fully loaded chewed-up tobacco spit-ball on the Constitution, are forced to buy up half a trillion dollars worth of mortgage toilet paper over the next year, and that amount could grow beyond infinity.

Don’t bother checking for your wallet; you gave it away last week, remember?

Now I see otherwise sane people claim that these auctions confirmed some sort of value for the swaps, and I just ain’t getting that. Don’t they understand how rigged the game is by now? Karl, wake up!

Yes, I agree, the paper needs to be exposed. But that doesn’t offer any hope; it will mean the end of banking as we know it. Which in turn will signal the end of society as we know it. The whole economic system is gone, it’s sleeping with the fishes.

$5 trillion vanished from the stock markets in one week, and I bet you, there’ll still be folks talking about (hyper-)inflation. Who needs logic anymore to make sense of the world around us? When faith can do it?

If nobody’s left who can afford to make an offer on your home, it’s worth nothing. The markets work, just not the way we’d like.

And if nobody offers anything for casino toilet paper, then that isn’t worth dick-all either. And since any value we assign to people these days, and the environment, and food, and drinking water, all is calculated as all other commodities, in a market that is dying, none of it all has any value left.

You now cost more to maintain than you deliver in productivity.

You have been written off.

And so have your kids.

The markets do work.

[Arraya]

This guy has called this train wreck every step of the way.

http://theautomaticearth.blogspot.com/

I don’t know guys, I smell fish around here. The Fannie and Freddie swaps auction on Monday returned 90+ cents on the dollar, and the same auction for Lehman on Friday lost 90+ cents on the dollar.

So I ask myself: who’s doing the buying? Now, it was clear from the get-go that Paulson et al were in on picking the Fan&Fred party music; who else overpays 800% or more on toilet paper? That’s just got to be someone playing with other people’s money. That doesn’t just smell like fish, that is a all-out glib bald mackerel. Insert Hank the Hammer pic.

A more realistic valuation came in the Lehman “settlement” [sic]. 8.5 cents on the buck. Ya-bleeding-bleeping Hoo!

Nah, want to know what I think? I think the banks and funds bought back their own swaps in that one. You know, save face, and all that. Besides, who cares anymore? They buy it back, and Monday morning Paulson offers to get it off their sheets, at the same 800% overpay, with your money. Dead Stinky Fish. Glib and salty.

Henry got another little sideshow set up as well. Forget about the $700 billion Roman Dictatorship Proclamation. Now, Fannie and Freddie, on top of that fully loaded chewed-up tobacco spit-ball on the Constitution, are forced to buy up half a trillion dollars worth of mortgage toilet paper over the next year, and that amount could grow beyond infinity.

Don’t bother checking for your wallet; you gave it away last week, remember?

Now I see otherwise sane people claim that these auctions confirmed some sort of value for the swaps, and I just ain’t getting that. Don’t they understand how rigged the game is by now? Karl, wake up!

Yes, I agree, the paper needs to be exposed. But that doesn’t offer any hope; it will mean the end of banking as we know it. Which in turn will signal the end of society as we know it. The whole economic system is gone, it’s sleeping with the fishes.

$5 trillion vanished from the stock markets in one week, and I bet you, there’ll still be folks talking about (hyper-)inflation. Who needs logic anymore to make sense of the world around us? When faith can do it?

If nobody’s left who can afford to make an offer on your home, it’s worth nothing. The markets work, just not the way we’d like.

And if nobody offers anything for casino toilet paper, then that isn’t worth dick-all either. And since any value we assign to people these days, and the environment, and food, and drinking water, all is calculated as all other commodities, in a market that is dying, none of it all has any value left.

You now cost more to maintain than you deliver in productivity.

You have been written off.

And so have your kids.

The markets do work.

[Arraya]

This guy has called this train wreck every step of the way.

http://theautomaticearth.blogspot.com/

I don’t know guys, I smell fish around here. The Fannie and Freddie swaps auction on Monday returned 90+ cents on the dollar, and the same auction for Lehman on Friday lost 90+ cents on the dollar.

So I ask myself: who’s doing the buying? Now, it was clear from the get-go that Paulson et al were in on picking the Fan&Fred party music; who else overpays 800% or more on toilet paper? That’s just got to be someone playing with other people’s money. That doesn’t just smell like fish, that is a all-out glib bald mackerel. Insert Hank the Hammer pic.

A more realistic valuation came in the Lehman “settlement” [sic]. 8.5 cents on the buck. Ya-bleeding-bleeping Hoo!

Nah, want to know what I think? I think the banks and funds bought back their own swaps in that one. You know, save face, and all that. Besides, who cares anymore? They buy it back, and Monday morning Paulson offers to get it off their sheets, at the same 800% overpay, with your money. Dead Stinky Fish. Glib and salty.

Henry got another little sideshow set up as well. Forget about the $700 billion Roman Dictatorship Proclamation. Now, Fannie and Freddie, on top of that fully loaded chewed-up tobacco spit-ball on the Constitution, are forced to buy up half a trillion dollars worth of mortgage toilet paper over the next year, and that amount could grow beyond infinity.

Don’t bother checking for your wallet; you gave it away last week, remember?

Now I see otherwise sane people claim that these auctions confirmed some sort of value for the swaps, and I just ain’t getting that. Don’t they understand how rigged the game is by now? Karl, wake up!

Yes, I agree, the paper needs to be exposed. But that doesn’t offer any hope; it will mean the end of banking as we know it. Which in turn will signal the end of society as we know it. The whole economic system is gone, it’s sleeping with the fishes.

$5 trillion vanished from the stock markets in one week, and I bet you, there’ll still be folks talking about (hyper-)inflation. Who needs logic anymore to make sense of the world around us? When faith can do it?

If nobody’s left who can afford to make an offer on your home, it’s worth nothing. The markets work, just not the way we’d like.

And if nobody offers anything for casino toilet paper, then that isn’t worth dick-all either. And since any value we assign to people these days, and the environment, and food, and drinking water, all is calculated as all other commodities, in a market that is dying, none of it all has any value left.

You now cost more to maintain than you deliver in productivity.

You have been written off.

And so have your kids.

The markets do work.

[Author]

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