Friday, Dec 12, 2008

The safest banks in Europe? Maybe not....

Telegraph: Switzerland may have to print money to stave off deflation

The Swiss National Bank has cut interest rates to 0.5pc and opened the door for emergency stimulus, becoming the first country in Europe to flirt with zero policy rates. The banking sector makes up 20pc of Swiss GDP, leaving the country extremely exposed to the credit crisis. The liabilities of Credit Suisse and UBS are equal to seven times national GDP. This has echoes of the situation in Iceland before the country collapsed, although Swiss banks have a much better mix of assets. "The crucial difference is that the Swiss own half a trillion dollars of external assets. They have a current account surplus of 16pc of GDP. This is their ace in the hole. If push ever comes to shove, the Swiss taxpayers have the money to pay."

Posted by drewster @ 01:10 AM (576 views) Add Comment

8 Comments

1. drewster said...

I've refrained from posting this in the main blog because I know some of you don't like this four-letter word, but here's an interesting piece about g-o-l-d:

Fear triggers gold shortage, drives US treasury yields below zero
The investor search for a safe places to store wealth as the financial crisis shakes faith in the system has caused extraordinary moves in global markets over recent days, driving the yield on 3-month US Treasuries below zero and causing a rush for physical holdings of gold. The gold markets have also been in turmoil. Traders say it has become extremely hard to buy the physical metal in the form of bars or coins. It appears that hedge funds in distress are being forced to cash in profits on gold futures to cover losses elsewhere or to meet redemptions by clients. [That's classic margin-calls and deleveraging - in my opinion the main cause of gold weakness so far.]

But smaller retail investors – and perhaps some big players – are buying bullion in record volumes to store in vaults. The latest data from the World Gold Council shows that demand for coins, bars, and exchange traded funds (ETFs) doubled in the third quarter to 382 tonnes compared to a year earlier. This matches the entire set of gold auctions by the Bank of England between 1999 and 2002.

And for the bears, check out goldpricecrash.com.

Friday, December 12, 2008 01:28AM Report Comment
 

2. str 2007 said...

Thanks for posting that link Drewster.

That's all I need - another Forum of interest. You realise I'll never get any work done now and I'll end up getting thrown out on the street and left to starve. Think of my family and children.

I'll have agood read of the crash website when I get some time.

Friday, December 12, 2008 09:13AM Report Comment
 

3. drewster said...

str, I wouldn't worry about that site. It looks fairly pathetic and poorly maintained to me.

Friday, December 12, 2008 09:56AM Report Comment
 

4. doom&gloom said...

Been reading a few articles on gold backwardation/contango over the past week. Most commentators seem to have a strong bias one way or the other (connection to COMEX/NYMEX board, or WGC affiliated, etc) and there's lots of argument: physical vs paper, supply problems vs position liquidations, 'is backwardation really occuring at all', etc.

Another view from Alphaville which is that the situation is just a result of currency fluctuations
http://ftalphaville.ft.com/blog/2008/12/10/50275/not-to-worry-about-gold-backwardation/?source=rss

Friday, December 12, 2008 10:52AM Report Comment
 

5. drewster said...

Looks like gold is back up to its all-time highs (in GBP) this week.

Friday, December 12, 2008 01:04PM Report Comment
 

6. This comment has been removed as it was found to be in breach of our Blog Policies.

 

7. This comment has been removed as it was found to be in breach of our Blog Policies.

 

8. This comment has been removed as it was found to be in breach of our Blog Policies.

 

Add comment
Username   Admin Password (optional)
Email Address
Comments
  • If you do not have an admin password leave the password field blank.
  • If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Main Blog | Archive | Add Article | Blog Policies