Reactions to story from The Wall Street Journal

Reactions / posts that link to this article

  • Photo of CondeNastPortfolio

    The Crisis Goes Global

    http://www.portfolio.com/views/blogs/market-movers/2008/10/0...
    57 days ago in Finance Blog - Market Movers by Felix Salmon - Portfolio.com · Authority: 744

    Europe's woes are clearly the key driver for the big slump in global stock markets today: the credit crunch has moved decisively across the Atlantic, and has engulfed the other great home of leverage. But the biggest losers of all are the BRICs: Brazil's down 15% today, Russia's off 19%. This is what a global crisis looks like: no one has decoupled, nowhere is safe. We're long past the point at which a global coordinated rate cut -- the dropping of vast amounts of money from helicopters -- will help things. Central bank liquidity injections are powerless in the face of serious worries about the solvency of the global financial system. In order to restore trust, what's needed is massive bank recapitalizations. The TARP can, in theory, do that, if it pays much more than market rates for toxic securities. The problem is that the mechanism is far from transparent -- and also that the TARP might not be big enough. Let's say that Treasury pays 50% over the odds for distressed debt: that means that the effective recapitalization from the TARP would come to only one third of the fund, or about $230 billion. That's less than the write-downs banks have already taken; it's not the overwhelming force that the markets want to see. Given the pain involved in getting TARP through Congress, I can't imagine that anybody has any appetite for yet another massive bailout bill, even if such a thing is desperately needed. At the very least, we're going to have to wait for the arrival of a new administration, in January. Which means the next three months could be extremely gruesome indeed. If there's any hope at all, I think it might come from the European Central Bank. There hasn't been a lot of leadership up until now out of Frankfurt and Brussels; maybe it's time for the Eurocrats to step up.Related Links Let Boehner Write It, or Have the Fed Go Solo Split Decision in Europe Incentives for Inflation

  • Photo of malissi

    Europe Under-Regulated Too?

    http://www.reason.com/blog/show/129302.html
    57 days ago in Hit & Run - Reason Magazine · Authority: 2,102

    As European stock markets tank, the Irish government guarantees bank deposits, the Benelux countries nationalize Fortis bank, Germany bails out Hypo Real Estate Holdings, and Denmark also guarantees bank deposits and dismally so forth, the question

  • Photo of TradingGoddess

    Monday Market Meltdown - Global Edition

    http://tradinggoddess.blogspot.com/2008/10/monday-market-mel...
    57 days ago in Trading Goddess Stock Blog! · Authority: 95

    Total market carnage! That's what we're waking up to today. We may be finally getting into oversold territory but the waves of panic are coming from across the globe and it's going to be hard to fight this tide. On the way down on Friday, at 1:47 we

  • Author unknown

    Stocks Tank Ovenight; US Futures Down Sharply

    http://www.nakedcapitalism.com/2008/10/stocks-tank-ovenight-...
    57 days ago in naked capitalism · Authority: 1,776

    So much for the idea that the bailout bill would produce a relief rally. Overseas equity markets are taking a beating. No word yet on how the credit markets are faring. Investors are finally waking up to the notion that it isn't just the US financial