Beurskrach 2009 - Stock Market Crash, economic downturn and the World Economy

"Many People on Wall Street Knew" Bernie Was a Crook, Madoff Author Says

trendsbridge@gmail.com (TrendsBridge) — Thu, 13 Aug 2009 07:09:00 +0000

"Many People on Wall Street Knew" Bernie Was a Crook, Madoff Author Says

GE Q2 profit falls, scales down industrial outlook

trendsbridge@gmail.com (TrendsBridge) — Sat, 18 Jul 2009 13:32:00 +0000

GE Q2 profit falls, scales down industrial outlook
General Electric's 2Q profit tumbles 49 pct on finance unit struggles, weak demand for goods

General Electric Co.'s second-quarter profit was sliced nearly in half, the company said Friday, as the recession drove down earnings at its finance unit and smothered demand for its wide-ranging industrial goods.
Although earnings beat Wall Street forecasts by a penny, GE's revenue fell $3 billion short of expectations, helping push down shares 6 percent. Quarterly sales fell across its divisions, from health care to broadcasting, suggesting that the recession is still sapping demand for goods and services.

That appeared to be troubling news for the nation's economic health since GE's businesses touch nearly all facets of the economy and investors were hoping sales would show flashes of strength.

The Fairfield, Conn.-based company is also retreating from a more optimistic outlook for its industrial businesses that make everything from microwaves to wind turbines. It's now saying those divisions could break even rather than show a profit this year.

GE 's second-quarter net income totaled $2.6 billion, or 24 cents per share, after paying preferred dividends. That fell 49 percent from $5.1 billion, or 51 cents per share, a year earlier. Revenue declined 17 percent to $39.1 billion.

Analysts polled by Thomson Reuters expected GE to earn 23 cents per share on revenue of $42.16 billion.

The first half of 2009 has been a difficult one for GE, one of the world's largest companies. It cut its dividend sharply to preserve cash, lost its vaunted Triple-A credit rating, and saw its share price plummet on fears that things could get worse for its lending unit.

GE Capital, which lends money on everything from credit cards to commercial real estate, posted a modest profit of $590 million in the second quarter. But those results were 80 percent lower than a year earlier, further proof that GE Capital is struggling with losses on bad loans. GE boosted reserves for loan losses to $6.6 billion during the quarter.

Still, GE Capital "remains on track to be profitable for the full year," Jeff Immelt, GE's chief executive, said.

GE Capital has tried to compensate for its weaknesses by scaling back its reliance on riskier debt and lowering costs through steps like cutting staff. It has also been helped by tax credits that helped it dodge a loss during the first three months of the year.

But GE Capital's second-quarter earnings show that the unit continues to face serious challenges. For example, GE's real estate unit, which owns office buildings and makes loans for commercial properties, posted a $237 million loss compared with $484 million in profits a year earlier.

"We are still very cautious about the real estate outlook," said Keith Sherin, GE's chief financial officer.

The company plans to give a detailed review of GE Capital later this month, the second time this year it will open its books as it tries to convince investors that there are no big losses lurking.

As GE Capital founders, the company has looked to its industrial divisions for stability. But those businesses, which make products like home appliances, train locomotives, diagnostic equipment for hospitals and jet engines, have also struggled during the recession.

GE said Friday that its industrial units should just break even this year. Previously, the company had said earnings could reach $5 billion. Read Article... http://finance.yahoo.com/news/GE-Q2-profit-falls-scales-apf-2602881202.html?x=0&sec=topStories&pos=3&asset=&ccode=

Comment Trendsbridge: Of all the troubling signs the Economy is not back on track and the crisis is not over yet this is one of the worst.

Optimism fading

trendsbridge@gmail.com (TrendsBridge) — Tue, 07 Jul 2009 08:50:00 +0000

Optimism fading
(01:53) Report

Jul 2 - The Dow closed lower for the third consecutive week as larger-than-expected job cuts added to signs a U.S. economic recovery could be sluggish.
Conway Gittens reports.

Cycle of rising unemployment, foreclosures and bankruptcies raising economic stress

trendsbridge@gmail.com (TrendsBridge) — Tue, 07 Jul 2009 08:44:00 +0000

AP analysis: Economic stress up in much of nation
Cycle of rising unemployment, foreclosures and bankruptcies raising economic stress

(Source AP) California, Michigan and South Carolina suffered the most financial pain in May as unemployment, home foreclosures and bankruptcies rose, according to The Associated Press' monthly analysis of economic stress in more than 3,100 U.S. counties.

The latest results of the AP's Economic Stress Index show the worst financial crisis since the 1930s causing lingering damage even as other signs suggest the recession is winding down.
The average county's Stress score, fueled by worsening unemployment, foreclosures and bankruptcies, rose to 10 in May, from 9.7 in April.

In May 2008, the average Stress score was 6.2. The pain was lower then because the economy was still expanding. In fact, the second quarter of 2008 was the last time the economy grew.

The AP calculates a score from 1 to 100 based on each county's unemployment, foreclosure and bankruptcy rates. The higher the score, the higher the economic stress.

Under a rough rule of thumb, a county is considered stressed when its score zooms past 11. In May, 36 percent of the counties scored 11 or higher, up from 34 percent in April. But the latest reading was slightly better than February and March, when nearly 40 percent of counties were at or above that threshold.

Federal Reserve Chairman Ben Bernanke and many other economists predict the recession will end later this year. Even if it does, unemployment, foreclosures and bankruptcies are likely to keep climbing and cause further harm in many communities, economists predicted.

"The pain will linger well after the recession is over, making for a subdued economic recovery," said Richard Yamarone, economist at Argus Research.

Many economists say the recession eased from April to June and that the economy might start growing again as soon as the current July-to-September quarter.

Among states, California, Michigan and South Carolina showed the most economic stress in May, with their counties' scores averaging 16, 15.9 and 15, respectively, the AP analysis shows.
California has been battered by the housing bust, and Michigan has absorbed the brunt of the auto industry crisis.
"And South Carolina is a little bit of everything," said Sean Snaith, economics professor at the University of Central Florida. "Manufacturing and construction jobs have been hard hit in the state."
One common thread running through all three states is heavy jobs losses. Rising unemployment, in turn, is escalating foreclosures and bankruptcies.
The rising economic stress comes as California, saddled with a whopping $24.3 billion budget deficit, and other states are scrambling to cope with fiscal crises. Read More...
http://finance.yahoo.com/news/AP-analysis-Economic-stress-apf-2726778711.html?x=0&sec=topStories&pos=4&asset=&ccode=

"Extraordinarily Evil": Judge Brings 150-Year Hammer Down on Madoff

trendsbridge@gmail.com (TrendsBridge) — Tue, 30 Jun 2009 06:43:00 +0000

"Extraordinarily Evil": Judge Brings 150-Year Hammer Down on Madoff

In sentencing Bernie Madoff to the maximum 150-year prison term Monday, U.S. District Judge Denny Chin cited the "extraordinarily evil" nature of his crimes.

"Here the message must be sent that...this kind of manipulation of the system is not just a bloodless crime that takes place on paper, but one instead that takes a staggering toll," Judge Chin said.

The ruling provided some solace to Madoff's victims who cheered the sentencing. Several Madoff investors spoke at the hearing and "without exception, attacked Madoff as an unfeeling, horrible, relentless pursuer of their money and souls," says Allan Dodds Frank, a veteran journalist and DailyBeast.com correspondent.

In the accompanying video, Frank recounts the "intensity" of the courtroom, how Madoff "pretty impassively" reacted to the sentence, and how quickly he moved when facing his victims. "If you blinked, you missed it," he says.

A specialist in white-collar crime, Frank said the 150-year sentence almost certainly means Madoff isn't going to any "country club" prison, although that's up the Bureau of Prisons to ultimately decide.

"A sentence of more than 30 years generally means you go to high security if not a super-maximum," Frank says. "150 years? It's hard to say he doesn't go to one of those facilities. They are not a picnic. Even medium-security Federal prison, you're still in with a lot of dangerous people."

Asia Currencies Head for Best Quarter Since 2004, Led by Rupiah

trendsbridge@gmail.com (TrendsBridge) — Tue, 30 Jun 2009 05:00:00 +0000

Asia Currencies Head for Best Quarter Since 2004, Led by Rupiah

June 30 (Bloomberg) -- Asian currencies headed for their biggest quarterly gain since 2004, led by Indonesia’s rupiah and South Korea’s won, as optimism the global economic slump is easing fueled demand for emerging-market assets.

The rupiah extended a quarterly winning streak that started in April 2008 on optimism President Susilo Bambang Yudhoyono will win re-election next month and introduce policies to support growth in Southeast Asia’s largest economy. The won gained as the Kospi Index of equities headed for its best quarter in two years. Crude and palm oil prices rose, boosting the outlook for commodity exporters including Malaysia.

“Most countries are moving along with a refreshing recovery trend that should be good for markets,” said Yeo Chin Tiong, head of treasury at OSK Investmnent Bank Bhd. in Kuala Lumpur. “The economies are chugging along, not fantastic, but stock and currency markets are trading on feel-good sentiment.”

The rupiah strengthened 0.6 percent to 10,210 per dollar as of 9 a.m. in Jakarta, taking its three-month rally to 14.6 percent, according to data compiled by Bloomberg. The won rose 0.5 percent 1,279.60 for an 8.1 percent gain since March 31. The ringgit added 3.5 percent in the quarter to 3.5220, and Taiwan’s dollar climbed 3.3 percent to NT$32.857.

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the 10 most-active regional currencies, rose almost 2.8 percent this quarter, the most since 2004. Investors ploughed a net $17.8 billion this year into eight Asian stock markets outside Japan, according Bloomberg data. The MSCI Asia Pacific index of regional stocks rallied 29 percent since the end of March.

Korean Confidence

The dollar weakened 0.2 percent to 95.89 yen and fell for a fourth day against the euro to $1.4115 as investors sought higher-yielding assets. The ICE’s Dollar Index, which tracks the currency against its six major rivals, declined 6.7 percent this quarter as demand for higher yields erodes the dollar’s safe- haven appeal.

The won was poised for its biggest quarterly gain in four years as local manufacturers turned less bearish in their business outlook.

An index measuring expectations for July advanced to 78 from 76 in June, based on a survey of 1,445 producers. The index reached 44 in January, the lowest since the series began in 1991. A score of less than 100 means pessimists outnumber optimists.

“Confidence numbers have picked up certainly, but they’re not yet being matched by real activity,” said Patrick Bennett, Hong Kong-based currency strategist at Societe Generale SA. “Some of the confidence priced into equities is prone to be unwound.”

Commodity Prices

The ringgit strengthened by the most in almost three weeks as stocks rallied and commodity prices extended gains, brightening the outlook for exports.

Higher prices for palm and crude oil, which together account for 10 percent of Malaysia’s exports, may help bring an end to a seven-month drop in overseas sales. Prime Minister Najib Razak may unveil incentives to attract funds from abroad when he opens a two-day investment conference in Kuala Lumpur today, according to a report from HwangDBS Vickers Research Sdn. yesterday. Read Article... http://www.bloomberg.com/apps/news?pid=20601087&sid=aW.mLODOHEXI

The End of a Rally for Asian Stocks?

trendsbridge@gmail.com (TrendsBridge) — Sun, 28 Jun 2009 13:05:00 +0000

The End of a Rally for Asian Stocks?
6/27/2009

The eight-month sprint for this sector is due for a pause or even a little backtracking. Barron's Leslie Norton reports.

Facebook, Twitter and peers for sale - privately

trendsbridge@gmail.com (TrendsBridge) — Sun, 28 Jun 2009 07:03:00 +0000

Facebook, Twitter and peers for sale - privately
No acquisition, no IPO, no problem: Private exchanges springing up to combat lack of liquidity

NEW YORK (AP) -- Scott Painter makes his living betting on startup companies, having played a role in launching 29 of them over the years. But with the bad economy choking initial public offerings and acquisitions, Painter is now backing an idea that makes it easier for insiders like him to sell shares in their companies even before they go public.

SharesPost, which was founded by Painter's business partner, Greg Brogger, launched publicly in June. Through SharesPost's Web site, Painter is trying to sell shares in several companies he helped found, including car pricing startup TrueCar.com. He also wants to buy shares in companies that are far from an IPO, like short-messaging site Twitter and business-networking site LinkedIn.

SharesPost is one of a few private stock exchanges that are emerging to fight what venture capitalists call a liquidity crisis. These exchanges give stakeholders an alternative way to trade their shares in hot startups like Facebook for cold, hard cash -- without having to wait years for an IPO.

Employees at startup employees often put in long hours but get salaries that can be 20 percent less than their peers at public companies. In return, they get stock or options that they hope will be a path to sports cars and summer homes after their company goes public or is bought out.

Given this, services like SharesPost could help startup workers get some cash while awaiting a distant IPO that might never even get off the ground. Most people won't be in on the action, though, since these exchanges are only open to a small pool of buyers.

And it's not clear how much -- or how little -- stock has changed hands through them. In its short life, Santa Monica, Calif.-based SharesPost said it has executed one $25,000 transaction, while another service, New York-based SecondMarket, said it has completed about 40 transactions in the past year worth about $150 million.
Still, if they manage to thrive, these exchanges could help the economy. By selling shares on a private exchange, an investor can free up funds to put into other startups. And institutional investors could use these services to broaden their holdings to include fast-growing companies that have yet to go public.

The methods of these private exchanges vary. SharesPost uses an online bulletin board to introduce buyers and sellers. SecondMarket links the parties and lets companies set up their own mini-markets that they control, while Redwood City, Calif.-based XChange is rolling out an online system that will allow buyers and sellers to connect and directly trade shares for cash.

All are open just to institutional investors -- organizations like venture capital firms or pension funds that manage at least $100 million in assets -- and individual accredited investors. That category includes people with a net worth of at least $1 million, or salary of at least $200,000 for the last two years.

The concept is not entirely new. Nyppex, formed in 1998, facilitates private-company stock trades, and a few companies with similar offerings emerged during the last economic downturn but failed to gather much steam. Among the problems: Determining a fair price for a private company's stock is tough without much public information.

This time, however, employees and investors are more aggressively looking for a way to get a return on their dedication and funding. More than a dozen companies have priced IPOs in the U.S. this year, down from 35 in the first half of 2008, according to research firm Renaissance Capital. In the same period of dot-com-crazy 2000, there were 219 IPOs in the U.S.
Read more... http://finance.yahoo.com/news/Facebook-Twitter-and-peers-apf-3349628532.html?x=0&sec=topStories&pos=main&asset=&ccode=

Madoff ruined lives, victims say. Madoff ordered to forfeit over $170 billion

trendsbridge@gmail.com (TrendsBridge) — Sat, 27 Jun 2009 07:29:00 +0000

Madoff ordered to forfeit over $170 billion
NY prosecutors: Judge orders disgraced financier Bernard Madoff to forfeit over $170 billion

NEW YORK (AP) -- Disgraced financier Bernard Madoff must forfeit $170 billion, a federal judge ordered Friday.

U.S. District Judge Denny Chin entered a preliminary order of forfeiture, and Acting U.S. Attorney Lev Dassin released a copy of the order Friday night. Madoff was ordered to give up his interests in all property, including real estate, investments, cars and boats.

According to earlier court documents, prosecutors reserved the right to pursue more than $170 billion in criminal forfeiture. That represents the total amount of money that could be connected to the fraud, not the amount stolen or lost.

The government also settled claims against Madoff's wife, according to Friday's order. Under the arrangement, the government obtained Ruth Madoff's interest in all property, including more than $80 million of property to which she had claimed was hers, prosecutors said.

The order makes it clear, though, that nothing precludes other departments or entities from seeking to recover additional funds.

A call to Madoff's lawyer, Ira Sorkin, after hours Friday was not immediately returned.

In his own court filing in March, Sorkin said the government's forfeiture demand of $177 billion was "grossly overstated -- and misleading -- even for a case of this magnitude."
The agreements strip the Madoffs of all their interest in properties belonging to them, including homes in Manhattan, Montauk, and Palm Beach, Fla., worth a total of nearly $22 million. The Madoff's must also forfeit all insured or salable personal property contained in the homes.

Other seized assets include accounts at Cohmad Securities Corp., valued at almost $50 million, and at Wachovia Bank, valued at just over $13 million, and tens of millions of dollars in loans extended by Madoff to family, employees and friends.
The judge's order also authorized the U.S. Marshals Service to sell the Manhattan co-op, properties in Montauk and Palm Beach and certain cars and boats.

Madoff, 71, is due to be sentenced Monday after pleading guilty in March to charges that his exclusive investment advisory business was actually a massive Ponzi scheme.
Federal prosecutors want Madoff to be sentenced to 150 years in prison for orchestrating perhaps the largest financial swindle in history.

Madoff's lawyer has said his client should serve only 12 years.
"The sheer scale of the fraud calls for severe punishment," the prosecutors wrote in response to a defense motion seeking lighter punishment.
Federal sentencing guidelines allow for the 150-year term, prosecutors said. Any lesser sentence, they added, should still be long enough to send a forceful message and "assure that Madoff will remain in prison for life."
The government's papers quoted from letters to U.S. District Judge Denny Chin written by victims of the scheme who are suffering severe hardships.

Madoff "ruined lives," one letter said. "He deserves no mercy."

At the time of Madoff's arrest, fictitious account statements showed thousands of clients had $65 billion. But investigators say he never traded securities, and instead used money from new investors to pay returns to existing clients.
Prosecutors said Friday that the total losses, which span decades, haven't been calculated. But 1,341 accounts opened since December 1995 alone suffered loses of $13.2 billion, they said.
Sorkin argued in court papers last week for a 12-year term. He said his client deserved credit for his voluntary surrender, full acceptance of responsibility and meaningful cooperation efforts.
"We seek neither mercy nor sympathy," Sorkin wrote. But he urged the judge to "set aside the emotion and hysteria attendant to this case" as he determines the sentence.

Bernanke vs. Buffett: Who's Right on the Economy?

trendsbridge@gmail.com (TrendsBridge) — Fri, 26 Jun 2009 11:09:00 +0000

Bernanke vs. Buffett: Who's Right on the Economy?

Deflation fears spread in Japan after consumer prices fall at record pace

trendsbridge@gmail.com (TrendsBridge) — Fri, 26 Jun 2009 11:02:00 +0000

Record fall in Japan prices fuel deflation fears
Deflation fears spread in Japan after consumer prices fall at record pace

TOKYO (AP) -- Deflation is clawing its way back in Japan, and that's not good news for an economy trying to recover from its worst recession since World War II.

Japan's key consumer price index tumbled at a record pace in May, the government said Friday. The core nationwide CPI, which excludes volatile fresh food prices, fell 1.1 percent from the previous year in the third straight month of decline.

The result marked the biggest fall since the government began releasing comparable data in 1971.

Japan appears to be "heading for another lengthy period of deflation," said Richard Jerram, chief economist at Macquarie Securities in Tokyo.

Lower prices may seem like a good thing, but deflation can hamper growth by depressing company profits and causing consumers to postpone purchases, leading to production and wage cuts. It can also increase debt burdens.

The drop in underlying prices is "set to be persistent" and can lead to various problems for companies and individuals because interest rates will "be too high for prevailing economic conditions," Jerram said in a note to clients.

Japan underwent a destabilizing bout of deflation during the 1990s, and again earlier this decade, when the world's second-largest economy struggled to escape from a real estate and banking crisis.

After the results, Japan's finance minister Kaoru Yosano expressed concerns about a significant slowdown in demand.
"We continue to monitor price movements, and need to carefully implement economic management to avoid...a deflationary spiral," Yosano said at a news conference, according to Kyodo news agency.
With crude oil prices down dramatically from record highs a year earlier, energy and transportation prices fell sharply in May. Fuel, light and water charges were down 3 percent, and private transportation costs tumbled 9.2 percent.
But analysts point to the 0.5 percent decline in so-called "core-core CPI," which excludes food and energy, as a more troubling sign of weakness in underlying prices.
Prices for household durables fell 4.9 percent, and those for clothing slipped 0.5 percent.
The core CPI for Tokyo dropped 1.3 percent in June, suggesting that prices nationwide are headed further south. Prices in the nation's capital are considered a leading barometer of price trends across Japan.
"This is consistent with media reports that large supermarkets are marking such goods down as households turn increasingly defensive amid severe employment and income conditions," said Kyohei Morita, chief economist at Barclays Capital in Tokyo.
Japan's central bank predicts that prices will keep falling for at least two years. In its latest economic outlook report in May, it forecast core CPI to drop 1.5 percent this fiscal year ending March 2010 and another 1 percent the following year.

The Challenge of Regulating Derivatives

trendsbridge@gmail.com (TrendsBridge) — Fri, 26 Jun 2009 09:05:00 +0000

High & Low Finance
The Challenge of Regulating Derivatives
By FLOYD NORRIS Published: June 26, 2009
The derivatives industry has started a public relations campaign arguing that it is helpful to businesses, especially smaller ones.
http://www.nytimes.com/2009/06/26/business/26norris.html

New jobless claims rise unexpectedly to 627K

trendsbridge@gmail.com (TrendsBridge) — Thu, 25 Jun 2009 13:41:00 +0000

New jobless claims rise unexpectedly to 627K
New jobless claims jump unexpectedly to 627,000; continuing claims rise to 6.74 million

WASHINGTON (AP) -- The number of Americans filing new jobless claims jumped unexpectedly last week, and the total unemployment benefit rolls rose to more than 6.7 million.
The Labor Department data released Thursday show jobs remain scarce even as the economy shows some signs of recovering from the longest recession since World War II.

The department said initial claims for jobless benefits rose last week by 15,000 to a seasonally adjusted 627,000. Economists expected a drop to 600,000, according to Thomson Reuters.
Several states reported more claims than expected from teachers, cafeteria workers and other school employees, a department analyst said.
The number of people continuing to receive unemployment insurance rose by 29,000 to 6.74 million, slightly above analysts' estimates of 6.7 million.
The four-week average of claims, which smooths out fluctuations, was largely unchanged, at 616,750.
Economists expect the number of initial unemployment insurance claims, which reflects the level of layoffs, to slowly decline over the coming months as the economy bottoms out.

Stocks open lower after rise in jobless claims
Stocks open lower after surprise increase in last week's jobless claims

NEW YORK (AP) -- An unexpected rise in jobless claims is causing investors to sell again.
The government says new jobless claims rose by 15,000 to 627,000 last week. The market had been expecting a decline. Unemployment affects many drivers of the economy -- most importantly, consumer spending.

Uncertainty about when the economy will turn around, and how fast it will grow when it finally does, have weighed on the market this month. The Dow Jones industrial average remains up 26.8 percent from its 12-year low hit on March 9, but is down about 5.7 percent from a June 12 high.

In the first few minutes of trading, the Dow is down 19 to 8,280. The Standard & Poor's 500 index is down 2 to 898, while the Nasdaq composite index is down 8 to 1,783.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
http://finance.yahoo.com/news/Stocks-open-lower-after-rise-apf-15617326.html?x=1&sec=topStories&pos=1&asset=&ccode=

ECB Lends Record $622 Billion in Bid to Ease Crisis

trendsbridge@gmail.com (TrendsBridge) — Thu, 25 Jun 2009 07:49:00 +0000

ECB Lends Record $622 Billion in Bid to Ease Crisis

(Source WallStreet Journal) FRANKFURT -- The European Central Bank pumped a record €442 billion ($622 billion) into euro-zone money markets Wednesday in its first-ever offer of one-year funds as it battles the Continent's recession.
Euro-zone banks borrowed the one-year funds, the largest amount the central bank has ever dispersed in a single shot, at the ECB's current key rate of 1%. Much of the total likely substituted for amounts banks had been borrowing from the ECB for shorter periods, so the net stimulus to the economy is less than it appears at first sight.
The novelty lies more in the length of time over which the ECB is prepared to offer unlimited funding, reflecting a desire to bring longer-term money-market interest rates down. Although the risk premium that banks charge each other for funds has fallen since the dramatic days of September, it still appears big enough to strain the economy.

The ECB's move signals the central bank remains committed to bolstering the euro-zone economy even as policy makers world-wide discuss how best to unwind the welter of monetary and fiscal stimulus pumped into the global economy over the course of the crisis. The ECB believes the 16-nation euro-zone economy will start growing again by the middle of 2010.

The ECB said in May that it would begin offering banks funds for one year. Before Wednesday, the longest period banks could borrow from the central bank was six months.

Fears of big bank problems return

trendsbridge@gmail.com (TrendsBridge) — Thu, 25 Jun 2009 07:33:00 +0000

Fears of big bank problems return
A key market measure of credit risk is deteriorating again, as investors fret over the side effects of giant federal bailouts for the nation's largest banks.

NEW YORK (Fortune) -- Betting against the banks is back in fashion.

A key market measure of the health of the biggest global financial institutions has deteriorated this month, after showing sharp improvement in April and May.

The price of betting that big banks will default on their debt -- made via derivatives known as credit default swaps -- has risen 17% in June, according to data from New York-based Credit Derivatives Research.

The uptick in wagers against banks such as Bank of America (BAC, Fortune 500), Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500) comes as the spring's scorching stock market rally peters out and doubts about the health of the global economy and the banking sector re-emerge.

The blue-chip S&P 500 has dropped 6% over the past two weeks, with half of that loss coming this week. The KBW Bank index has slid 20% since hitting a recent high May 11.

Some selling is no doubt inevitable after a strong rally. But a World Bank report Monday that predicted the global economy will shrink 2.9% this year "touched a raw nerve," said Mauro Guillen, director of the Lauder Institute at the University of Pennsylvania's Wharton School.

"We have been too optimistic for too long, and we still haven't done the dirty work of fixing the financial system," he said.

Guillen said the U.S. will have to take action to restore the credit system before the economy can resume expanding in earnest.

That will mean actually implementing plans such as the one the government proposed this spring to attract private sector buyers of troubled bank assets, Guillen said. Regulators shelved one such program earlier this month.

Guillen also advocates pushing financial regulatory reform program through Congress.
But Robert Claassen, chair of the derivatives and structured products practice at international law firm Paul Hastings, said he senses the momentum for sweeping change has ebbed in recent weeks.
"There's a lot less public outrage right now," he said.
Guillen shares that view, and said it bodes ill for the long anticipated economic rebound. He notes that the economy must start growing again before unemployment -- rapidly approaching 10% -- comes down to a more moderate level.
"We have reached this period of apathy, and there's a real danger that the economy will languish with the underlying problems unaddressed," he said.

Fear of failure replaced by fear of weak earnings. Read on...
http://money.cnn.com/2009/06/24/news/companies/banks.bets.fortune/index.htm?postversion=2009062404

OECD Week: Where next for the world economy?

trendsbridge@gmail.com (TrendsBridge) — Wed, 24 Jun 2009 09:53:00 +0000

OECD Week: Where next for the world economy?

Debate at the OECD Forum and the forecasts and analysis in the latest edition of the OECD’s twice-yearly Economic Outlook will set the tone for recommendations and decisions at the OECD’s annual ministerial meeting.
Restoring stability, confidence and sustainable growth is the priority. The OECD is working with governments and international organisations to cut short the crisis and lay the foundations of a stronger, cleaner and fairer global economy.

OECD sees strongest outlook since 2007
The Organisation for Economic Co-operation and Development has revised its World Economic Outlook upwards for the first time in two years, as its latest review concludes that the global economic slide is nearing a bottom.
In its report, published on Wednesday, the OECD revised its growth forecast for 2009 to a decline of 4.1 per cent, down from a contraction of 4.3 per cent. It said that in 2010, it expects very modest growth where earlier it expected none.
Weak recovery in sight but damage from crisis likely to be long-lasting, says OECD
http://www.oecd.org/document/41/0,3343,en_2649_34109_43123241_1_1_1_37443,00.html

The OECD Forum on 23-24 June, and the OECD ministerial meeting on 24-25 June mark the annual high point in the Organisation’s calendar. Ministers from governments from around the world, as well as leading representatives of business, labour, NGOs, academia and the media, will thrash out ideas and seek solutions to global problems.
>> Read this Key Information brochure to find out more about the issues that will be debated.

The forecasts in the Economic Outlook, to be published at 10:30 on 24 June, and discussions at the Forum will feed directly into the ministerial meeting which will be chaired by Korean Prime Minister Han Seung-soo

Joaquín Almunia, EU Commissioner, on next steps in the crisis

OECD Annual Report 2009 Download http://www.oecd.org/dataoecd/38/39/43125523.pdf

22-Jun-2009
This Annual Report highlights some of the OECD's achievements in 2009 and describes how it is helping its member countries respond to new challenges ahead.
Also available:

* Rapport annuel de l'OCDE : 2009 , pdf, (French)

'Mogelijk 18.000 bedrijven in zwaar weer'

trendsbridge@gmail.com (TrendsBridge) — Wed, 24 Jun 2009 08:36:00 +0000

'Mogelijk 18.000 bedrijven in zwaar weer'

(Bron: de Telegraaf, DFT) ROTTERDAM (AFN) - Ongeveer 18.000 Nederlandse bedrijven zitten mogelijk in financiële problemen. Dit concludeert accountancy- en adviesbureau Deloitte op basis van onderzoek onder een doorsnee van het Nederlandse bedrijfsleven.
Voor de helft van de bedrijven hangt het voortbestaan van de onderneming het komende halfjaar af van toegang tot krediet. Maar van deze groep geeft bijna de helft aan dat het moeilijk wordt om nieuwe financiering rond te krijgen. Een derde van de ondernemingen verwacht de komende tijd tegen de grenzen van de afspraken met financiers aan te lopen. Deloitte noemt het opvallend dat van deze bedrijven 37 procent de situatie niet heeft besproken met de banken.

“Niets doen is geen optie”, stelt Oscar Snijders van Deloitte. “Bedrijven moeten met de banken om de tafel. Om het proces van het krijgen van krediet soepeler te laten verlopen, moeten bedrijven volledig en tijdig transparantie tonen.”

Barron's Editor Michael Santoli speaks about the slump in trading during the summer.

trendsbridge@gmail.com (TrendsBridge) — Tue, 23 Jun 2009 19:01:00 +0000

Eerie Calm of Summer Trading
6/22/2009
Barron's Editor Michael Santoli speaks about the slump in trading during the summer.

Forget About Iran, Canada a Bigger Risk to Oil Market, Energy Trader Says

trendsbridge@gmail.com (TrendsBridge) — Tue, 23 Jun 2009 18:56:00 +0000

Forget About Iran, Canada a Bigger Risk to Oil Market, Energy Trader Says

The eyes of the world are fixed on the election protests in Iran. Yet, while unrest reigns in one of the world’s largest oil producers, crude prices have actually fallen below $70 a barrel. Stephen Schork, editor of The Schork Report, says that’s because traders have already priced in the risk.

Get this: The big risk to prices, Schork says, comes from our friendly neighbors to the north. Canada is America’s biggest supplier of oil - most of it coming from tar sands. The problem, according to Schork, is that the Obama administration has taken “a rather belligerent stance” toward that supply because it’s not environmentally friendly. If the administration increased taxes on Canadian oil it “could be displaced...that will have an uplift to prices,” he goes on to say.

And, don’t forget the risk south of the border. Maturing oil fields, drug cartels and political instability in Mexico have the potential to drive up prices. If the U.S. doesn’t pay more attention to these risk factors, investment will continue to dry up and leave us paying more at the pump, Schork warns.

So while everyone is focused on geopolitical “hot-spots” like Iran, Nigeria and Venezuela, the real risk to crude prices may be much closer to home.

Sarkozy: niet bezuinigen, wel lenen

trendsbridge@gmail.com (TrendsBridge) — Tue, 23 Jun 2009 08:19:00 +0000

Sarkozy: niet bezuinigen, wel lenen

(Bron, De Telegraaf, DFT) PARIJS (AFN) - De Franse president Nicolas Sarkozy gaat op grote schaal geld lenen om met strategische investeringen de economische crisis te lijf te gaan. Hij zei dat maandag in een gezamenlijke bijeenkomst van de beide Kamers van het parlement. Bezuinigingen en belastingverhoging werken volgens Sarkozy averechts.
De omvang van de nieuwe staatsleningen wordt pas bekend als de regering haar nieuwe prioriteiten heeft gesteld. Sarkozy weet nog niet of hij het geld gaat lenen van het Franse volk of op de financiële markten.

Het Franse financieringstekort dreigt op te lopen naar meer dan 7 procent dit jaar en volgend jaar. Dat is meer dan twee keer de limiet die de Europese Unie daaraan stelt. Sarkozy heeft meermalen de vloer aangeveegd met wat hij noemde het “Angelsaksische kapitalisme”. Hij wil vasthouden aan de Franse traditie om flink te investeren in het publieke domein en aan relatief ruime sociale uitgaven. http://www.telegraaf.nl/dft/nieuws_dft/4224149/__Sarkozy__niet_bezuinigen__wel_lenen__.html?p=30,1

The Financial Crisis: Charting a Global Recovery

trendsbridge@gmail.com (TrendsBridge) — Tue, 23 Jun 2009 08:04:00 +0000

The Financial Crisis: Charting a Global Recovery

June 22, 2009—New World Bank analysis of the global economy paints an unprecedented picture: global output falling by 2.9 percent and world trade by nearly 10 percent; accompanied by plummeting private capital flows, likely to decline from $707 billion in 2008 to an anticipated $363 billion in 2009.

As the world enters what appears to be an era of markedly slower economic growth, the World Bank’s annual Global Development Finance (GDF) report, released today, updates the outlook for the global economy, and explores the broad approach that will be necessary to chart a worldwide recovery.

“Extraordinary measures by governments around the world have helped save the global financial system from complete collapse, but the economic recession in the real sectors persists,” said the World Bank’s Justin Lin, Chief Economist and Senior Vice President, Development Economics. “To break the cycle, we need bold policy measures, including restoration of domestic lending and global capital flows.”

Lin was speaking at the Annual Bank Conference on Development Economics, underway in Seoul, where experts have gathered to discuss the financial crisis. He emphasized the key role that developing countries—the engine of future global growth—can play in the global recovery, as well as the grave development emergency posed by the impact of the crisis on poor, vulnerable countries.

Deepening global recession

As capital became increasingly hard to come by, and uncertainty soared about future demand, there was a sharp decline in production of manufactured goods, and in global trade in these goods. The level of industrial production in rich countries has dropped by 15 percent since August 2008, and that in developing countries, excluding China, by 10 percent. Read news... Permanent URL for this page: http://go.worldbank.org/XNOU707YR0

Juniraming CPB: Historische krimp Nederlandse economie

trendsbridge@gmail.com (TrendsBridge) — Mon, 22 Jun 2009 10:35:00 +0000

Juniraming CPB: Historische krimp Nederlandse economie

http://www.cpb.nl/nl/news/2009_18.html
De Nederlandse economie krimpt dit jaar naar verwachting met 4¾%. Voor volgend jaar is een afname van het BBP voorzien van ½%. Met name de uitvoer krijgt dit jaar rake klappen, omdat de relevante wereldhandel in de raming met een niet eerder vertoonde 15¼% terugvalt. Maar ook consumenten geven beduidend minder uit dan vorig jaar. De scherp terugvallende productie gaat onherroepelijk gepaard met een fors oplopende werkloosheid. Deze komt volgens de huidige prognose uit op gemiddeld 5½% in 2009 en stijgt volgend jaar snel verder tot 9½%. De overheid schrijft dit en komend jaar dieprode cijfers, met begrotingstekorten van respectievelijk 4,1 en 6,7% BBP.

Dit zijn de belangrijkste ramingen uit de 'Koninginne-MEV' die jaarlijks in juni verschijnt als input voor de begrotingsvoorbereiding van het kabinet. De toelichting op deze ramingen is vandaag gepubliceerd in het juninummer van de CPB Nieuwsbrief. Het Centraal Planbureau (CPB) presenteert hierin prognoses voor de Nederlandse economie in de jaren 2009 en 2010. Andere artikelen in deze CPB Nieuwsbrief gaan vooral over de Europese Unie, zoals over de Lissabondoelstellingen, de voordelen van de interne markt en het belang van de 'oude' lidstaten bij de welvaart van de nieuwe lidstaten in Midden- en Oost-Europa.

Zware mondiale recessie
Sinds maart is de onrust op de financiële markten, ontstaan na het faillissement van de Amerikaanse investeringsbank Lehman Brothers, afgenomen dankzij de uitzonderlijke maatregelen van centrale banken en regeringen. Marktpartijen houden niet langer rekening met een totale ineenstorting van het financiële systeem. Van een normalisering is echter nog geen sprake. Veel deelmarkten functioneren nog steeds nauwelijks, schattingen van geleden bankverliezen zijn recentelijk weer opwaarts herzien en de daling van de huizenprijzen in de Verenigde Staten en veel eurolanden duurt voort.
Bekeken over het gehele jaar zal 2009 de sterkste productiedaling sinds de Grote Depressie van de jaren dertig laten zien. In het eurogebied daalt het BBP naar verwachting met maar liefst 5%. Door het expansieve macro-economische beleid en de veronderstelde verbetering op de financiële markten is de BBP-daling in het eurogebied in 2010 veel beperkter - naar verwachting ½%. De recessie drukt de inflatie. Werkloosheid en overheidstekorten zullen volgend jaar nog geen keer ten goede ondergaan. De wereldhandel zal in 2010 weer groeien, maar slechts minimaal.

Onzekerheden blijven groot
De onrust op financiële markten is verminderd, maar een volledige normalisering tijdens de projectieperiode is zeker niet gegarandeerd. Gezien de precaire situatie zijn nieuwe problemen in de financiële sector een reële mogelijkheid. Bovendien zijn veel bedrijven en gezinnen in moeilijkheden geraakt door de diepe recessie en de scherpere kredietvoorwaarden. De kredietcrisis en de wereldwijde recessie zouden dan ook langer kunnen aanhouden dan in de gepresenteerde projectie is voorzien. Ook bestaat het risico van dalende prijzen en lonen (deflatie) als gevolg van de zeer diepe recessie. Daar tegenover staat dat de forse overheidsmaatregelen effectiever kunnen zijn dan is voorzien, zodat het economisch herstel wat sterker kan zijn.

Recordkrimp Nederlandse economie
Al sinds het tweede kwartaal van 2008 krimpt de Nederlandse economie op kwartaalbasis. Naar verwachting ligt het dieptepunt, in termen van groei, in de eerste helft van 2009. Daarna trekt de economie geleidelijk weer aan, maar per saldo krimpt de economie zowel dit als volgend jaar. Dit jaar bedraagt de geraamde krimp 4¾%. Volgend jaar is de afname van het productievolume, met ½%, geringer.
Ervaringen van landen die eerder met een bankencrisis te maken hebben gehad laten zien dat het verschil tussen piek en dal gemiddeld 9% is, en dat het bijna twee jaar duurt om het dal te bereiken. Daarmee vergeleken vallen de gevolgen van de crisis volgens de huidige prognose nog mee. Echter, zonder kredietcrisis zou de Nederlandse economie na 2008 waarschijnlijk 'normaal' zijn doorgegroeid, zodat het BBP in 2010 ten opzichte van de oude trend ongeveer 10% lager is. Hoewel er grote variatie is tussen landen, is gemiddeld genomen een substantieel deel van deze misgelopen groei structureel, dat wil zeggen langdurig en misschien zelfs permanent. Dat is het geval wanneer bijvoorbeeld de werkloosheid blijvend hoger uitkomt en investeringen in kapitaal en innovatie zich minder gunstig ontwikkelen. Lees Bericht...

CPB Nieuwsbrief 2009/2, juni 2009

Deze Nieuwsbrief bevat de volgende artikelen:

De interne markt: Europa's hoop in crisisdagen
Lissabon 2010: EU is goed onderweg, maar we zijn er nog niet
Historische krimp Nederlandse economie
Investeringen en strategische belangen
Arbeidsmarkt voor ouderen functioneert slecht
Recente publicaties.
Midden- en Oost-Europa telt mee - ook in tijden van crisis

Download de Nieuwsbrief in PDF-format.

De nieuwe ramingen kunnen worden gedownload als spreadsheetbestanden op de downloadsectie van deze site.

De volledige CPB Nieuwsbrief 2009/2, het artikel 'Historische krimp Nederlandse economie' en de kerngegevenstabel uit de CPB Nieuwsbrief 2009/2 zijn alle (gratis) beschikbaar als aparte PDF-bestanden op de website van het CPB (www.cpb.nl).

Is the recession over?

trendsbridge@gmail.com (TrendsBridge) — Mon, 22 Jun 2009 09:42:00 +0000

Is the recession over?
Some experts point to stabilization in the housing and job markets as signs the recession has ended. Others continue to see weeds - not green shoots.

NEW YORK (CNNMoney.com) -- The recession began in December 2007. Did it end sometime this spring?

It's a provocative question that's tough to answer. It's tempting to say the recession is over when that seems to be what the stock market is telling us.

But Wall Street hardly has a perfect track record: There were numerous bear market rallies during the Great Depression, for example.

Stocks also enjoyed a nice run last spring after Bear Stearns almost imploded, even though the collapses of Fannie Mae (FNM, Fortune 500), Freddie Mac (FRE, Fortune 500), Lehman Brothers and AIG (AIG, Fortune 500) were still yet to come.

"With all due respect to Mr. Market, it is highly fallible as a forward looking barometer," said David Rosenberg, chief economist & strategist at Gluskin Sheff + Associates, a Toronto-based wealth management firm.
The bear case: 'Less bad' does not equal good

The jump in stocks also poses another chicken-versus-egg question: Is the market rallying because people think the recession is over or do people think the recession is over because the stock market is rallying?

If it's the latter, that's not necessarily great news. Rosenberg said he thinks it's "beyond bizarre" to say the recession is over. The economy may have pulled out of the free fall that took place from September through February, he said, but that shouldn't be confused with a bottom.
http://money.cnn.com/2009/06/19/markets/thebuzz/index.htm?postversion=2009062008

Treasury Department Issues Emergency Recall Of All US Dollars

trendsbridge@gmail.com (TrendsBridge) — Mon, 22 Jun 2009 08:23:00 +0000

Treasury Department Issues Emergency Recall Of All US Dollars

Treasury Department Issues Emergency Recall Of All US Dollars

Nieuwe Europese bankenregels schieten tekort

trendsbridge@gmail.com (TrendsBridge) — Mon, 22 Jun 2009 03:06:00 +0000

'Nieuwe Europese bankenregels schieten tekort'

(Bron De Telegraaf, DFT)
BRUSSEL (AFN) - De Europese regeringsleiders trekken de teugels voor de financiële sector aan. Om een herhaling van de financiële crisis te voorkomen, moeten banken en verzekeraars zich vanaf volgend jaar onderwerpen aan strengere regels en strikter toezicht. Hoogleraar economie Sylvester Eijffinger is echter niet onder de indruk.
“Dit kan niet werken”, waarschuwde Eijffinger vrijdag vanaf een congres in Milaan, waar hij de nieuwe regels bediscussieerde met kopstukken uit de Europese financiële sector. “Men heeft de oren teveel laten hangen naar de politiek. Maar monetair toezicht is heel complex. Het is een vak apart, daar hebben politici maar weinig verstand van.”

Na lang onderhandelen werden de regeringsleiders van de EU het vrijdag eens over de nieuwe toezichtsstructuren voor de Europese financiële sector. Die zijn voor een groot deel gebaseerd op de aanbevelingen van de commissie van wijzen onder leiding van de Fransman Jacques de Larosière, waarin ook de Nederlandse ex-minister Onno Ruding zitting had.

Wensen
“Die commissie heeft teveel geluisterd naar de wensen van de Duitsers en de Britten, die waren tegen het overhevelen van verantwoordelijkheden naar Europees niveau. Er is te weinig lef getoond”, aldus Eijffinger. Eerder gaf Ruding zelf al toe dat de aanbeveling om een echte Europese toezichthouder in te stellen in politiek opzicht nog een brug te ver was.

Nationale toezichthouders moeten volgens de nieuwe regels in een aparte commissie gaan samenwerken bij het toezicht op banken en verzekeraars die in verschillende landen actief zijn. Daarnaast moeten twee andere commissies ervoor gaan zorgen dat het toezicht in de EU-lidstaten beter wordt en dat de regels in heel Europa worden gestandaardiseerd. Zie artikel...
http://www.telegraaf.nl/dft/nieuws_dft/4206802/___Nieuwe_Europese_bankenregels_schieten_tekort___.html?p=14,1