Wednesday, Dec 17, 2008
Oh dear what a mess, the bank cannot pay its debt
Daily Telegraph: Fresh credit strains in Europe as Deutsche Bank shocks markets
Deutsche Bank has refused to redeem a bond issue in an unprecedented move that has rattled Europe's credit markets. The news set off a fresh flight from European bank debt. Credit default swaps (CDS) on the iTraxx Financial index measuring stress in the sector saw the biggest jump since the Lehman Brothers crisis. Deutsche Bank, Germany's top lender, said it had chosen not to exercise a "call option" on a subordinated bond worth €1bn (£930bn), breaking an iron-fast code in the credit markets. The bank's share price fell 7pc in Frankfurt, and the default insurance on the company's debt surged. "This has never happened before," said Willem Sels, a credit strategist at Dresdner Kleinwort.
Posted by who stole my pension? @ 08:30 PM (1294 views) Add Comment
11 Comments
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1. bystander said...
.....but it's OK as the currency markets think the powerhouse of the eurozone will keep it all together, and so, just when individual euro zone economies could do with individual monetary policies to stimulate their economies they are stuck with a one size fits all ideal, based on the strength of Germany, and now the cracks in that economy are beginning to surface. Still, plenty of time to bury the pound GB and drag us into the eurocracy before the whole lot implodes under the pressure of being the reserve currency.
2. Eternal Sceptic said...
I suspect in 12 months time tobacco will be the only useful currency around. Gold is a bit big for a loaf of bread(if there is any bread to be had that is.)
Must be time to stockpile food before the riots begin.
3. fjcruiser said...
Euro bubble about to explode. Where do we go from there. End of money ?
4. flintster1994 said...
fjcruiser,
Perhaps the end of fiat currency. Money is a means of exchange. What that new exchange mechanism will be, is open to debate.
5. greytornado said...
There seems to be quite a widespread view, that after the hyperinflation and all fiat currencies have collapsed; the new currencies will be pegged to, (not backed by), the price of gold, to prevent the current problem from ever happening again. Those who bought bullion as a hedge will make some remarkable profit I believe. The problem is the hyperinflation and all the grief that will bring, not to mention the food riots. If a major war doesn't happen; we will be lucky. The Chinese for a start are going to be really pissed off when the trillions of Western currency they hold is only worth so much paper. Perhaps that is why they are planning to increase their holding of gold from some 600 tons to 2,400 tons as has been reported by various sources recently.
6. bellwether said...
can we keep this quiet until we get to parity with £, I'm holding euros right now!
7. Yellerkat said...
Not making the news with anyone else except out old friend AEP.
8. Gordon Brown said...
I will return this country back to its former glory in a few months. No need to buy gold your savings are safe with me.
Gordon Brown
Prime Minister
9. bystander said...
bellwether....I believe HMG want to do just that. Well done for getting into euros early enough, I wish I had, as my savings are now worth, in euro terms 30% less than 2007 and I am getting just over 1.5% interest, while the official rate of inflation is 4.1%. HMG really, really, really don't want savers do they?
10. Currency Expert said...
Since when is 1bn euros equal to 930bn punds?
11. inbreda said...
10. Currency Expert said...
Since when is 1bn euros equal to 930bn punds?
today?
9. bystander said...
Well done for getting into euros early enough, I wish I had, as my savings are now worth, in euro terms 30% less than 2007
I was on the verge of buying in france and going to live there. Now just a pipe dream - I am stuck in the UK. The ability to go has just disappeared. It's depressing, and my mood is only bouyed by fat gordons desperate and pathetic attempts to do *something* and the fact that house prices are heading in the right direction.