(Off-topic) Banks' banker warns of downturn
From The Age:Along with a couple of Albert Edwards' posts:
THE risk of a 1930s-style economic slump has been heightened by "euphoric" markets tapping cheap global credit, one of the world's pre-eminent financial institutions has said.
In its annual report, the Bank for International Settlements noted that the conditions that led to the Great Depression of the 1930s and the Asian crises in the 1990s reflected the current environment....
May 8, 2008
This Week’s Advice: Canned Food, Guns and a Ham Radio
And more timely still, two days before Fannie Mae and Freddie Mac were put into conservatorship leading the parade of Lehman, AIG, Merrill Lynch, WaMu, et al:
September 5, 2008
Where was I? BIS? From City AM:
Investors should brace themselves for more episodes of volatility in global markets which could complicate the tightening of monetary policy, according to a warning from the influential head of the world’s top central banking body.
Claudio Borio, the head of the monetary and economic department at the Bank for International Settlements (BIS), said markets and the economy are “sailing in uncharted waters” and that it is “unrealistic to expect no further market ructions”.
Stocks last month fell sharply across the world in a correction after an extended period of historically low volatility across markets which had unnerved investors.Also at City AM:
The trigger for the moves came at the start of February as wage data in the US showed a marked increase in pay, prompting fears inflation could rise faster than expected and force the Federal Reserve to tighten monetary policy faster to stop spiralling price rises.
Speaking ahead of the Basel-based body’s quarterly review, published today, Borio said that “some volatility is healthy” after the “insidious… illusion of permanent calm”.
Borio described the stock market slide, which saw US stock indices lose more than 10 per cent from peak to trough, as a “bolt from the blue” which was exacerbated by exchange-traded products and automated investment strategies as well as exotic new derivatives of volatility indices in ways reminiscent of the 1987 stock market crash....MORE
Central bank bosses are warning about the next global crash