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F. T. : "...most Chaotic Times In The Credit Markets Seen Since The Great Depression."

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http://www.ft.com/cms/s/0/b04f0652-ebe7-11...00779fd2ac.html

Hedge funds spark fixed income stress
By Michael Mackenzie in New York
Published: March 7 2008 02:00 | Last updated: March 7 2008 02:00
Fears over the health of the financial system intensified yesterday as forced selling and margin calls at hedge funds sparked acute stress in many areas of the fixed income markets.
Equity investors also reacted to the strains, with the bear market in US bank stocks entering new territory. The S&P 500 financial index fell to its lowest level since May 2003 after sliding more than 30 per cent from last year's peak.
In the fixed income sphere, stress is most acute in the mortgage, corporate, municipal bond and interest rate swap areas. Credit default swap spreads for banks, including Citigroup, JP Morgan, Bank of America and Wachovia reached record wide levels. Meanwhile, broad measures of investment grade default risk hit record wides in the US, Europe and Japan.
Tom di Galoma, head of Treasury trading at Jefferies & Co, said: "There is an extreme lack of liquidity and markets are being moved by liquidation fears and margin calls. Funds are being tapped on the shoulder and it seems there is no margin for slippage when it comes to a margin call from the banks."
In a sign that risk managers at banks are calling the shots, Lehman Brothers announced it had suspended two equity traders after discovering "issues" with some of their trades.
This followed a statement from Carlyle Group on Wednesday that its mortgage bond fund had missed margin calls and had received a notice of default.
Forced selling is hitting the US mortgage market particularly hard, as investors are unable to discern when home prices will stop falling and foreclosure rates will ease.
In turn, swap spreads, which are a measure of the difference between Treasury and money market collateral and seen as a barometer of bank counterparty risk, scaled new territory.
The two-year spread reached a record peak of 111 basis points, eclipsing a brief rise above 100bp in December when year-end funding pressures were paramount.
Analysts are increasingly calling for a Federal bailout of the mortgage market in order to stem the rout that has rippled across markets and now threatens the broader economy.
A steeper Treasury yield curve, which over time boosts net interest margin for banks, is not helping ease concerns.
William O'Donnell, strategist at UBS, said: "It seems it is time for the Congress to put a floor under markets that are not directly responding to the actions of the Fed.
"The US taxpayer's wallet, and not just rate cuts, is what's needed to restore order during the
most chaotic times in the credit markets seen since the Great Depression."

It just keeps getting worse each day. And not in little increments either. The market is somewhat calloused by now so catastophic news is just more bad news that no one can do anything about anyway.

The latest from No. 10 is rumours that Brown is calling in a large group of financiers to run the treasury instead of politicians.

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It just keeps getting worse each day. And not in little increments either. The market is somewhat calloused by now so catastophic news is just more bad news that no one can do anything about anyway.

The latest from No. 10 is rumours that Brown is calling in a large group of financiers to run the treasury instead of politicians.

Someone should deliver a catering pack of tranquilizers to No 10. Or send Margaret Hodge round with a nice cup of tea and a chocolate biscuit.

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There was another article in the FT todayabout ''Jingle Mail''.That is mortgagees handing back keys in the US,which is predicted to be the end game for 15 million US households.No wonder the Case Schiller is predicted to reach -17% YOY by November from its present -9%.I didn't realise things were that bad over there.

Edited by crashmonitor

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The latest from No. 10 is rumours that Brown is calling in a large group of financiers to run the treasury instead of politicians.

Financiers will wisely stay away from Gordon's "Jonah Effect"

No10 recently announced with gusto the arrival of ex Goldman Sachs Jennifer Moses to help out with Gordon 2.0 project, and "spice up" politics

Within days Ms Moses' husband's hedge fund (Peleton) went bust. Today she has pulled out over what No. 10 was today describing as a "domestic situation"

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The latest from No. 10 is rumours that Brown is calling in a large group of financiers to run the treasury instead of politicians.

I hope that's a joke!

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We're all right. Stability. 48 consecutive quarters of debt-fuelled growth. Low public sector borrowing requirement. Healthy trade surplus. Strong currency.

When they triumphantly entered Downing Street in 1997, after an exile lasting 18 years, the people sung with joy ... 'things can only get better'.

Now, 11 years on, the song is the same but the words are slightly different 'Can things get any better'

Truly New Labour have led us to a land of milk and honey, A tightly integrated, cosmopolitan, cafe society with full employment, little or no crime and full taxation.

Why don't people on here give credit where it's due? New Labour do. Give credit that is.

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Somebody tell Ruth Kelly that talking with a breathless gap between every third word, with heavy emphasis put on the first syllable of some words, in a deliberately slow, strangled way ... makes her sound like a moron. It does not get the message across. It makes me want to throw a brick at the television.

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Guest vicmac64

This thing is going to escalate very quickly now - we are starting to see real distress signs in the markets.

One thing I am sure of - all the greed driven participants in the banks, governments and markets responsible for this diabolical and wholly avoidable mess should be stripped of all their assets accumulated over the past 5 years.

Why should they benefit and savers and pensioners lose out?????? because of their irresponsible and downright reckless handling of our currency and economy.

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There was another article in the FT todayabout ''Jingle Mail''.That is mortgagees handing back keys in the US,which is predicted to be the end game for 15 million US households.No wonder the Case Schiller is predicted to reach -17% YOY by November from its present -9%.I didn't realise things were that bad over there.

Just love the new quotations we are getting first CREDIT CRUNCH and now JINGLE MAIL when REPO's hand back their keys. I wander do they get the T-Shirt "I have been CRUNCHED" :lol::lol:

Looks like the PROPERTY MYTH has been BUSTED

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Somebody tell Ruth Kelly that talking with a breathless gap between every third word, with heavy emphasis put on the first syllable of some words, in a deliberately slow, strangled way ... makes her sound like a moron. It does not get the message across. It makes me want to throw a brick at the television.

I read that they go in for a lot of whipping and BDSM related stuff in Opus Dei? I imagine you would utter breathless cries between every crack of the whip on your bot would you not?

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We're all right. Stability. 48 consecutive quarters of debt-fuelled growth. Low public sector borrowing requirement. Healthy trade surplus. Strong currency.

When they triumphantly entered Downing Street in 1997, after an exile lasting 18 years, the people sung with joy ... 'things can only get better'.

Now, 11 years on, the song is the same but the words are slightly different 'Can things get any better'

Truly New Labour have led us to a land of milk and honey, A tightly integrated, cosmopolitan, cafe society with full employment, little or no crime and full taxation.

Why don't people on here give credit where it's due? New Labour do. Give credit that is.

Now go and wash your hands :D

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Somebody tell Ruth Kelly that talking with a breathless gap between every third word, with heavy emphasis put on the first syllable of some words, in a deliberately slow, strangled way ... makes her sound like a moron. It does not get the message across. It makes me want to throw a brick at the television.

:lol: You'll feel far more satisfied if you throw the brick at her.

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  • 293 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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