The banks, the stockmarket and the government had jobs to do. They each screwed up those jobs. Thinking that they screwed up those jobs, therefore, is not pessimism, it's realism. Pessimism would be if you thought they were also going to come round and sleep with your wife.
Older_Wiser
· 10 months ago
Brits are right to be worried. Over here, banks want more govt welfare for their "toxic assets" (read: credit default swaps) and what they want this time won't even begin to address the vastness of the toxicity they own because they've infected the world with it. The language Bernanke and Kohn use is interesting--"illiquid investments"--they can't quite say the banks are full of junk that will never again have value.
Jan. 14 (Bloomberg) -- The Federal Reserve’s top two officials urged a new effort to address the toxic assets held by financial companies, warning that they threaten to prevent banks from resuming lending to households and companies.
Chairman Ben S. Bernanke and Vice Chairman Donald Kohn said in separate remarks yesterday that the illiquid investments raise questions about the “underlying value” of banks and may hinder “private investment and new lending.” They called for the government to remove or insure the assets.
The goal is to prevent the type of economic stagnation that plagued Japan in the 1990s, when banks weighed down with bad loans were unable to lend. President-elect Barack Obama has a window of opportunity to oversee a comprehensive bank restructuring plan after taking office next week.
“Banks are insolvent now,” said Paul Miller, a bank analyst at Friedman Billings Ramsey & Co. in Arlington, Virginia, who estimates that financial institutions need an additional $1 trillion to $1.2 trillion in new help. “Until you address this shortfall, banks will continue to be credit hoarders and destroyers as they shrink their balance sheets.” More at bloomberg.com
labrat
· 10 months ago
UK is a complete mess. The British would much rather have Merkel than Brown. After all Merkel has guided the German economy masterfully and they are easily in the strongest position to weather the recession having budget surpluses, trade surpluses, a stable housing market and a relatively more stable banking system.
Indigo
· 10 months ago
Ah, Shakespeare! But wait, this is only Act IV. The backstabbing and staged sword fights are in Act V. It'll be fun and there'll be lots of dead and wounded on stage before the curtain falls. Exit: center stage trapdoor!
James Guglielmino
· 10 months ago
What's your problem with Angela Merkel? Anyone who could give us that marvelous moment when shrub rubbed her shoulders, can't be all bad. Gug
nanotube
· 10 months ago
Anyone who reads the news lately is probably pessimistic, so the study should account for exposure to news about the economic crisis, or normalized the scores to pessimism about the world economy as a whole. I wouldn't be surprised if someone in London or New York was more informed that inhabitants in rural Sudan, or even rural USA. Whether more exposure to news makes someone really accurately 'informed' or just creates a self-fulfilling prophecy is another question...
All Comments
Jan. 14 (Bloomberg) -- The Federal Reserve’s top two officials urged a new effort to address the toxic assets held by financial companies, warning that they threaten to prevent banks from resuming lending to households and companies.
Chairman Ben S. Bernanke and Vice Chairman Donald Kohn said in separate remarks yesterday that the illiquid investments raise questions about the “underlying value” of banks and may hinder “private investment and new lending.” They called for the government to remove or insure the assets.
The goal is to prevent the type of economic stagnation that plagued Japan in the 1990s, when banks weighed down with bad loans were unable to lend. President-elect Barack Obama has a window of opportunity to oversee a comprehensive bank restructuring plan after taking office next week.
“Banks are insolvent now,” said Paul Miller, a bank analyst at Friedman Billings Ramsey & Co. in Arlington, Virginia, who estimates that financial institutions need an additional $1 trillion to $1.2 trillion in new help. “Until you address this shortfall, banks will continue to be credit hoarders and destroyers as they shrink their balance sheets.” More at bloomberg.com
Gug