The Credit Crunch - What's next?

[terryw]

Reported in todays Daily Telegraph:

UK banks have in the last 12 months up to 30th June 2008 made more profit than in the previous year.

So much for the banks being in crisis!!

[Monkey]

Northern Rock didn't

[terryw]

I used to work for Northern Rock - senior management were a load of cowboys.

[post-op lover]

(terryw @ Aug. 11 2008,18:14) Reported in todays Daily Telegraph:

UK banks have in the last 12 months up to 30th June 2008 made more profit than in the previous year.

So much for the banks being in crisis!!

Reported in today's LadyboyForums: UK Newspapers have a weird way of reporting financial results.

Seriously, reporting the last 12 months means that this includes several months of last year. Then, to compare the two years means only that they're comparing a few months, rather than the whole year.

Don't worry, though, American reporters are imbeciles, too.

POL

[pacman]

(terryw @ Aug. 11 2008,20:14) So much for the banks being in crisis!!

Hi Terry, it all sounds good, right?

Here's a tip, don't go celebrating too soon, the next 12 months threaten to be historically bad...

We should all watch how it unfolds - and trust me, I am praying it is nowhere as bad as some analysts are suggesting.

We are in the rare position of watching a world superpower lose everything, over the next year or so, the US economy is going to be damaged on an unprecedented scale.

The problem doesn't just stop with America, virtually every banking institution on earth is going to be hurt by the fallout, & it gives me absolutely no pleasure to think about it.

[terryw]

I dont claim to be an expert on the US banking industry - however I did work in the UK banking industry for nearly 20 years.

The situation on this side of the Atlantic is that nearly all of our banks are fundamentally sound. Most are still making a profit despite already writing off huge amounts of bad debts.

The era of easy credit is over and banks are returning to the more sensible lending conditions that existed when I first worked in the industry.

Not all of us are living in a doom and gloom world. Most people and governments will adjust to live within their means and reduce their level of indebtedness.

The USA will remain the only economic superpower for the forseable future and many of these analysts will be eating their words.

[jaymee]

I don't think hyperinflation is going to be all that likely since the USA has the substantial clout to force weaker hands along in the commoditization of its currency. I'm sure China for instance is not all that willing to buy so much US treasuries but have been compelled to do otherwise.

Its a mug's game anyways to predict the geopolitical ramifications of central bank policies. I'm quite uncertain of where its going.

Fundamentally, the base/industrial metals like copper or steel have decade low inventories which may exert price spirals over the longer term but I agree with with short to medium term corrections based on demand destruction due to slowing economies. For e.g. Shipbuilding stocks are getting sold down recently.

Technically, the commodities correction is quite healthy - for gold for e.g. correction of 15%-25% is normal. Also, the correction restores a more steady uptrend for a longer term bull run e.g. oil is now backing away from its parabolic upswing.

All in all, I doubt the picture is going to be all that bad? Not so rosy though  in the US or probably the Eurozone as well but Asia should do fine. I find it a pain anyways to buy US stocks since every purchase has to be hedged with gold.

Stagflation as I mentioned is the most likely but there's always things to buy I guess Its quite likely the dividend yield stock which has been quite underestimated in these past eras of huge capital gain would likely gain more popularity. Plus we could invest and profit from inflation as well.

P.S does anyone read City Boy's blog from the london paper?

[Tomcat]

UK
utilities up 17.2% food up 12.2% motoring up 5.7% over the last year
and so on it goes..it looks like were going back to the days when your money in the bank is in reality.... shrinking.

time to shop around again for the best deal, i didnt realise it was that bad until i read an in depth report this morning. Its hard enough getting the stuff in the bank in the first place let alone fret about the rate im getting...grrrrrrr

[azza33]

Just learn to enjoy shorting the markets...

It can bring good returns very quickly

[kathylc]

They can say what they want to say on the news about housing slump etc etc, but in the pan handle of Florida / Alabama it sure is not affected one bit, nor is it in most of Alabama. Even with the initial high gas prices and ther reports of foks not going on vacations sure has not affected the region either. Beaches and hotels / motels are as packed now as they have ever been previously, maybe even more so.

I deal with a credit union and they still have tons of money top play with and lend and they pay better interest rates on savings etc than the big banks do. They also have lower interest rates on loans too, and do have a better track record of folks NOT fullfilling their load obligations than most banks do, possibly due to a smaller customer base they deal with overall. Oh and I just filled up at $3.30 a gal and its cheaper again today from what I just paid($3.28 today from what I seen)

[jimslim]

Sweet home Alabama , where the skies are so blue

[azza33]

Funny thing about downturns, if you live in an area that ok and you are employed and not at risk of losing your job....

Everything just seems so rosy and unaffected....


I work for a bank and can assure you life has changed very much - even here in OZ where banks are still making big profit!!
I lend money, and quite simply the rules have changed significantly over the past 12 months.

The interesting things to watch for the credit crunch is the flow on effects...

We're only watching round 1 at the moment.... stay tuned!

[donnnnnny]

bottom line is we are all poorer on paper. and thats what it all is paper get pissed and spend it all before the cunts get it off you

[jimslim]

Words of wisdom

And another plus point is, we no longer have to listen to bar room bores telling us how much their house is worth this week