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!
The Bank of England calls for worldwide co-ordination on interest rates
The Bank of England has this weekend repeated calls for worldwide co-ordination on interest rates in an attempt to refloat and replenish the worldwide economy. While there have been a number of local rescue packages and rescue deals it looks as though this is not enough to help the worldwide economy recover in the short term. Just a short a few weeks ago we saw a concerted effort by the various ce...Read More
Alitalia airline moves one step closer to collapse
Despite the fact that investors were waiting in the wings for the go-ahead it seems as though a dispute with Unions has scuppered the final chance of saving the stricken airline Alitalia. It seems crazy that the Unions would rather reject the rescue package and see the airline go to the wall than agree to structured job loses and at least employment for some of the airlines employees. So what ne...Read More
Kraft Foods disappoints with results
Last night saw US food giant Kraft Foods announce disappointing third-quarter results which many had hoped would be the springboard for a takeover of Cadbury. All eyes are on the US market this afternoon to see how investors react to the disappointing news because a reduction in the share price of Kraft Foods would directly affect the company's ability to afford the £10 billion plus acquisition o...Read More
Rate rise hint from BoE deputy governor
The deputy governor of the Bank of England (BoE) has said he voted in favour of a rate rise earlier this month because he was "not convinced" current rates were sufficient for long-term sustainability among certain variables.In a speech at the University of Surrey, John Gieve said not acting on instability was a bigger issue than bringing about a slowdown.Mr Gieve said he voted for the rate rise e...Read More
Bank of England set to widen funding window
In a move which is set to attract a large amount of scepticism it has been revealed that the Bank of England is set to widen its funding window for distressed banks and allow them access to more funding than ever before. In a move to the US style 'discount window', banks will be able to access cheaper funds more frequently in order to keep money markets moving.