"What matter who's speaking, someone said, what matter who's speaking."
Well, central banks are considered the lenders of last resort, and I suspect they are already stretched beyond their imagination as they support all these American and European banks' reserve requirements.They are already in panic mode, and I include the ECB, which has been supporting European 'money markets' with enormous liquidity offers since August. Their liquidity injections have only been increasing in magnitude since then, and now they are even giving banks money for up to 6 months. Two or three highprofile banking collapses and we could witness a financial cataclysm that people have been predicting for decades.Asset values can still go down much more, and we will then know if the current financial setup can handle such stress.It's only a matter of time I think until 'supranational' Central Banks such as World Bank and BIS will be called in to rescue the financial system, of course using money from the treasuries of different states.The dirty "little" secret is that the financial system is trying to support derivatives with a notional value close or even more than $500 trillion.abbass
Well, central banks are considered the lenders of last resort...On Paul Krugman's blog the Fed was described recently as the "pawnbroker of last resort", because it was lending with risky securities as collateral - effectively buying those securities. Nationalization would make more sense.
" 'The G7 finance officials had a dinner scheduled for Friday night that was to include executives of some of the world's biggest financial companies. The idea: Look at the causes and consequences of the recent financial turmoil. Officials invited to those talks included top executives of Citigroup, Deutsche Bank, Barclays, Credit Suisse, Lehman Brothers and Morgan Stanley.' Instead of having dinner with those that caused the problem and have no idea how to fix it, the powers that be should have instead sat down with the top 20 economic bloggers as to what to do. We have been warning about these problems for years."Read MISH's blog post on the G7 "Plan" they keep droning about.I believe JeanClaude Trichet's latest G7 'communique' on the FX market--exactly the same as the last one in Feb--I believe he called it 'poetic':"It's like a poem: it speaks by itself."I don't know if I should be LOL.abbass