Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Credit Crisis Phase II - The Economic Crunch

News_Letter / Credit Crisis 2008 Sep 09, 2008 - 12:03 PM GMT

By: NewsLetter

News_Letter September 6th , 2008 Issue #23 Vol. 2

Dear Subscriber,

The credit crisis having manifested itself most evidently during the past 12 months through the continuing tightening in the availability of credit to all sectors of the economy despite government and central bank actions of pumping hundreds of billions of dollars if not more than $1 trillion into the financial system so as to prevent a chain reaction of bank failures as the worlds big banks continue to announce ever larger bad debt provisions each and every quarter.


The Market Oracle Newsletter
September 6th , 2008            Issue #23 Vol. 2

Commodities Currencies Economics Housing Market Interest Rates Education Personal Finance Stocks / Financials Best Analysis

Credit Crisis Phase II - The Economic Crunch


Dear Subscriber,

The credit crisis having manifested itself most evidently during the past 12 months through the continuing tightening in the availability of credit to all sectors of the economy despite government and central bank actions of pumping hundreds of billions of dollars if not more than $1 trillion into the financial system so as to prevent a chain reaction of bank failures as the worlds big banks continue to announce ever larger bad debt provisions each and every quarter.

The latest economic data now confirms that the the credit crisis is having a serious impact on the major western economies all of whom are now fast tipping into recession, with the momentum of economic contraction feeding in on itself as the chain reaction of contraction in one sector impacts on to the next sector and so on cycling back around as every sector of the economy follows the financial and housing sectors into recession.

The expected tendency would be to expect the first sector to be hit hardest to be the first to recover, therefore an end to the crisis will be first seen within the financial sector, the core problems of which relate initially to the US housing market backed derivatives that magnified exposure to the market by in some cases as much as 30X the amount risked. Whilst the world enjoyed a credit boom this brought huge profitability to the banks, however derivatives being an over the counter market, i.e. without any regulated market place, the mark to market methodology deployed to boost valuations hence profits were akin to plucking figures out of thin air. This started to come to a head 12 months ago when the big banks suddenly both a) stopped trading the assets between themselves due to the dubious valuations and b) were not prepared to risk further lending to other institutions where the risks were now un quantifiable as to whether they would be repaid or not, hence the interbank credit freeze and the delveraging of the estimated $500 trillion (BIS) global derivatives market began

The US housing market is far from bottoming, my existing forecast suggests that the US housing market will not bottom until late 2010, for at least another 2 years, therefore the position of the big banks will continue to deteriorate and so will the state of the economies which will lag any bottom in the housing markets, hence this suggests at least the next 2 years will be economically tough and on par with what could be termed as a soft depression, depressions tend to be highly deflationary which is what we have been witnessing as asset prices contract literally across the board from housing to stocks and finally to commodities.

INO Frree Trading Seminars TV

The following articles continue to expand on the impact of the credit crisis on the worlds economies and asset prices as politicians such as Britain's Chancellor of the Exchequer Alistair Darling " Economic times are arguably the worst they've been in 60 years… I think it's going to be more profound and long-lasting than people thought " prepare the populous for a recession.

Nadeem Walayat,
Editor of The Market Oracle

In This Issue
  1. Forces Driving the Credit Crunch
  2. Continuing Credit Crisis About to Get a Lot Worse
  3. Credit Crisis Shock Wave Hitting US Economy, Bonds and Stocks
  4. US Treasury Bull Market Continues as Risks of Deflationary Crash Grow
  5. US Unemployment Soars as Jobs Decline for 8th Consecutive Month
  6. Stocks Bear Market Trend Resumption Alert!
  7. Real US Interest Rates Are Too High
  8. Once in 100 Years Credit Crisis, World Heads for Deflationary Collapse
  9. Credit Crunch Cancer Metastasizing
  10. Credit Crisis Set to Intensify as Economies Begin to Crumble
1. Forces Driving the Credit Crunch

By: Money_and_Markets

The credit crunch. We all know it's here, and that it's impacting virtually every corner of the financial markets. But a lot of investors don't really understand how a crunch really works ... why it's so insidious ... and why the Feds' efforts to ease the logjam have been largely ineffective.

Read Article

2. Continuing Credit Crisis About to Get a Lot Worse

By: John_Mauldin

We are entering the next stage of the credit crisis, and one which is potentially more troubling than what we have seen over the past year, absent some policy reactions by the central banks and governments world wide. The crisis was started by an intense run-up in leverage by financial institutions and investors world wide, investing in increasingly risky assets such as subprime mortgages and then the realization that leverage could hurt.

Read Article

3. Credit Crisis Shock Wave Hitting US Economy, Bonds and Stocks

By: Jim_Willie_CB

Something big this way comes. Events will center upon the arch-nemesis of gold, the US Treasury Bond. Market interference is too huge, for bonds, for bank stocks, for the entire financial sector. Banking system structures are too broken. The pillars of the US Economy are all in deep trouble, with profound deficits and insolvency the rule of the day. See the USGovt federal deficit (growing fast), the trade deficit (chronically large), the housing negative equity (worsening gradually), and insolvent banks (worse each quarter, despite the denials).

Read Article

4. US Treasury Bull Market Continues as Risks of Deflationary Crash Grow

By: Mike_Shedlock

The US Treasury Bull market is still intact after 27 years.

30 Year Long Bond 1990-Present

Read Article

5. US Unemployment Soars as Jobs Decline for 8th Consecutive Month

By: Mike_Shedlock

Before taking a look at the monthly jobs data, let's take a look at weekly claims. The US Department of Labor is reporting Initial Unemployment Insurance Claims continue to rise.

Read Article

6. Stocks Bear Market Trend Resumption Alert!

By: Hans_Wagner

If you want to learn to invest, one of the best ways is to follow the trend. Following the trend is a proven way to beat the market and grow your stock portfolio. Basic technical analysis provides the tools to identify and follow the trends of the market as determined by the S&P 500.

Read Article

7. Real US Interest Rates Are Too High

By: Mike_Shedlock

I am going to make a shocking statement. Here it is: Real interest rates are high. Before stating the basis for such a seemingly wild claim it is important to define some terms. In this case "real" means inflation adjusted.

Of course this means we have to agree on the meaning of the word "inflation". For this discussion I am going to waver from my usual stance that "Inflation is an increase in money supply and credit" to something mainstream.

Read Article

8. Once in 100 Years Credit Crisis, World Heads for Deflationary Collapse

By: Dr_William_R_Swagell

The credit crunch of the past year has not followed the path of recent economically debilitating episodes characterized by a temporary freezing up of liquidity - 1982, 1989, 1997-8 come to mind. This crisis is different - a once or twice in a century event deeply rooted in fears of insolvency of major financial institutions.

Read Article

9. Credit Crunch Cancer Metastasizing

By: Money_and_Markets

Martin Weiss writes: First, the subprime mess clobbered subprime lenders like Countrywide Financial.

Then, the cancer spread to America's largest banks that invested heavily in risky mortgage-backed securities.

Read Article

10. Credit Crisis Set to Intensify as Economies Begin to Crumble

By: Prieur_du_Plessis

The gyrations of financial markets ahead of the Labor Day weekend tested the patience of bulls and bears alike. As big swings took place in thinly-traded markets, I was reminded of Albert Schweitzer's words: “As we acquire more knowledge, things do not become more comprehensible but more mysterious.”

Read Article

For more indepth analysis on the financial markets make sure to visit the Market Oracle on a regular basis.

Subscription

You're receiving this Email because you've registered with our website.

How to Subscribe

Click here to register and get our FREE Newsletter

Forward a Message to Someone [FORWARD]

To update your preferences and access the Newsletter archive [PREFERENCES]

How to Unsubscribe - [UNSUBSCRIBE]

 

About: The Market Oracle Newsletter


The Market Oracle is a FREE Financial Markets Forecasting & Analysis Newsletter and online publication.
(c) 2005-2008 MarketOracle.co.uk (Market Oracle Ltd) - The Market Oracle asserts copyright on all articles authored by our editorial team. Any and all information provided within this newsletter is for general information purposes only and Market Oracle do not warrant the accuracy, timeliness or suitability of any information provided in this newsletter. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We recommend that independent professional advice is obtained before you make any investment or trading decisions. ( Market Oracle Ltd , Registered in England and Wales, Company no 6387055. Registered office: 226 Darnall Road, Sheffield S9 5AN , UK )

Terms of Use | Privacy Policy

Copyright 2008 MarketOracle.co.uk

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules