Are we poised is to see the third leg of the credit crunch crisis?
After the initial credit crunch hit the US and began to spread around the world there was a period when many observers believed concerns had been overdone and the markets and economies around the world would return to "normal". However, we then saw a second leg which impacted upon the worldwide financial sector, stock markets, government budgets and other vital elements of "everyday life". However, there are growing concerns that we could be poised to see the third leg of the credit crunch hit the worldwide economy!
Earlier this week we saw concerns appear regarding the Greek economy, which has struggled due to the downturn, with a massive increase in the Greek government budget deficit. There is also the ongoing situation in Dubai which, despite government claims that it is "under control", still has some way to go before it is totally resolved. As a consequence, there is growing fear in the money markets that more governments around the world will struggle to raise funds needed to see them through the short to medium term, a time when the worldwide economy and local economies should start to turn the corner.
The danger is that if economies are starved of potential financial investment in the short term we could see a sharp U-turn and a further lurch downwards. This could literally push the worldwide economy into a depression, never mind a recession!
UK recovery at risk because of reduced credit
The International Monetary Fund (IMF) has again stepped in to kick the UK economy when it is down. The association believes that the UK, more than any other developed country in the world, is at risk over the next few years from reduced levels of credit for both consumers and businesses. It is estimated there will be a shortfall of £280 billion this year between required loans and liquidity avail...Read More
Why should UK consumers suffer quantitative easing?
As the Bank of England sits on the verge of introducing one of the more radical economic policies available, i.e. quantitative easing, there are serious concerns that again UK consumers are set to foot the bill of the "mismanagement of the economy". In effect the imminent arrival of quantitative easing will see the Bank of England investing billions upon billions of pounds to acquire assets from t...Read More
Mervyn King rocks the government's boat
In this evening's Mansion house speech Mervyn King has rocked the UK government boat by suggesting that the Bank of England needs increased powers to control and regulate the UK financial sector. In a rerun of what is happening in the US, Mervyn King believes the Bank of England needs to regain the power it lost some time ago when the Financial Services Authority (FSA) was introduced to the mix. T...Read More
FSA censors two traders from Dresdner
The FSA (Financial Services Authority) has today censored two traders from Dresdner bank in relation to a Barclays bank bond issue back in 2007. It would appear that the traders in question had initially caught wind of the bond issue, which was to be on more favourable terms than existing Barclays bonds. As a consequence they are alleged to have approached various investors to "sound them out" abo...Read More
Moss Bros Rings Warning Bells For The High Street
The latest high street retailer to sound the warning bells for the UK economy is suit company Moss Bros, reporting a fall of 1.5% in like for like sales over the last 19 weeks. The company expect this situation to deteriorate further with forecasts of a near 4% drop in like for like sales for the full year. While many observers of the UK economy have been expecting a sudden fall in the UK econom...Read More