Asian Markets Take Another Dip
Asian markets continue to tumble on real fears of global recession. Compounded by the already tightly intertwined system of banking and commercial equity positions. Much of these riskier equity positions, unlike US Banks are counted toward their regulatory capital requirements.
This latest Asian market plunge is signalling another dangerous day on Wall Street. How many bullets can the market dodge? If we do get a real free fall what do you do?
By the way don’t overlook the emerging problems in the Middle East with plunging oil prices–the contagion is officially worldwide. This could add complexity of a calamitous sort considering the propensity for violent volatility to unleash during crisis in is this region.
Where is the Bottom?
The Bears have a new game–who can call the bottom? Our current bear market is in the top 5 in history. Where will it finally land in the history books?
How about Another Bubble?
Here comes the tech financing bubble. Henry Blodget of the Silicon Alley Insider reminds us of another bugaboo in or fragile financial markets–technology financing. Many companies finance big-ticket technology infrastructure purchases from their providers, the likes of Cisco, IBM, and others. What happens when these borrowers go out of business? Well we are about to find out. “Bad loans” and write-offs are starting to show up on the financial statements of some of our tech giants.
Rethinking Capitalism
Does this shock to the free market financial system and massive government bailouts give us:
A. Time to rescue capitalism and improve it, or
B. Opportunity to F*** it up beyond recognition?
I am going to place my bets on B. I intend to support this theory by posting moronic band wagon writing I see littered about over the coming weeks.
Solving Financial Crisis at the Source
I have to believe this is the answer. This crisis has to be solved at the source–the American homeowner. This seems to only way to place a floor under housing prices.
No on likes it–banks lose, investors lose, taxpayers lose, but we restart on a firm footing and hopefully learn a valuable lesson.
Many are recommending Fannie Mae open the consumer mortgage credit markets where banks fear to tread. A scenario that was warned by Treasury Secretary Paulson and may have been confirmed on a JP Morgan Chase conference call.
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I am Bill Rice the Managing Editor of MortgageLoan.com. These are my morning notes. If you have comments, feedback, or pointers to something interesting email me or follow me on Twitter.
(photo credit: jacob botter)
About Bill Rice