Archive for the ‘Global Financial Crisis’ Category

Flashback: Morgan Stanley Predicts Sovereign Debt Crisis & Hung Parliament

May 8, 2010

This seems appropriate given we now have a Hung Parliament :

Telegraph- Morgan Stanley Fears UK Sovereig Debt Crisis in 2010

“Britain risks becoming the first country in the G10 bloc of major economies to risk capital flight and a full-blown debt crisis over coming months, according to a client note by Morgan Stanley.

The US investment bank said there is a danger Britain’s toxic mix of problems will come to a head as soon as next year, triggered by fears that Westminster may prove unable to restore fiscal credibility.

“Growing fears over a hung parliament would likely weigh on both the currency and gilt yields as it would represent something of a leap into the unknown, and would increase the probability that some of the rating agencies remove the UK’s AAA status,” said the report, written by the bank’s European investment team of Ronan Carr, Teun Draaisma, and Graham Secker.

“In an extreme situation a fiscal crisis could lead to some domestic capital flight, severe pound weakness and a sell-off in UK government bonds. The Bank of England may feel forced to hike rates to shore up confidence in monetary policy and stabilize the currency, threatening the fragile economic recovery,” they said.

Morgan Stanley said that such a chain of events could drive up yields on 10-year UK gilts by 150 basis points. This would raise borrowing costs to well over 5pc – the sort of level now confronting Greece, and far higher than costs for Italy, Mexico, or Brazil.

High-grade debt from companies such as BP, GSK, or Tesco might command a lower risk premium than UK sovereign debt, once an unthinkable state of affairs. …”

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Morgan Stanley Fears UK Sovereign Debt Crisis in 2010

December 1, 2009

Telegraph – UK Sovereign Debt Crisis in 2010

“Britain risks becoming the first country in the G10 bloc of major economies to risk capital flight and a full-blown debt crisis over coming months, according to a client note by Morgan Stanley.

The US investment bank said there is a danger Britain’s toxic mix of problems will come to a head as soon as next year, triggered by fears that Westminster may prove unable to restore fiscal credibility.

“Growing fears over a hung parliament would likely weigh on both the currency and gilt yields as it would represent something of a leap into the unknown, and would increase the probability that some of the rating agencies remove the UK’s AAA status,” said the report, written by the bank’s European investment team of Ronan Carr, Teun Draaisma, and Graham Secker.

“In an extreme situation a fiscal crisis could lead to some domestic capital flight, severe pound weakness and a sell-off in UK government bonds. The Bank of England may feel forced to hike rates to shore up confidence in monetary policy and stabilize the currency, threatening the fragile economic recovery,” they said.

Morgan Stanley said that such a chain of events could drive up yields on 10-year UK gilts by 150 basis points. This would raise borrowing costs to well over 5pc – the sort of level now confronting Greece, and far higher than costs for Italy, Mexico, or Brazil.

High-grade debt from companies such as BP, GSK, or Tesco might command a lower risk premium than UK sovereign debt, once an unthinkable state of affairs.

A spike in bond yields would greatly complicate the task of funding Britain’s budget deficit, expected to be the worst of the OECD group next year at 13.3pc of GDP.

Investors have been fretting privately for some time that the Bank might have to raise rates before it is ready — risking a double-dip recession, and an incipient compound-debt spiral – but this the first time a major global investment house has issued such a stark warning.

No G10 country has seen its ability to provide emergency stimulus seriously constrained by outside forces since the credit crisis began. It is unclear how markets would respond if they began to question the efficacy of state power.

Morgan Stanley said sterling may fall a further 10pc in trade-weighted terms. This would complete the steepest slide in the pound since the industrial revolution, exceeding the 30pc drop from peak to trough after Britain was driven off the Gold Standard in cataclysmic circumstances in 1931.

UK equities would perform reasonably well. Some 65pc of earnings from FTSE companies come from overseas, so they would enjoy a currency windfall gain.

While the report – “Tougher Times in 2010” – is not linked to the Dubai debacle, it is a reminder that countries merely bought time during the crisis by resorting to fiscal stimulus and shunting private losses onto public books. The rescues – though necessary – have not resolved the underlying debt problem. They have storied up a second set of difficulties by degrading sovereign debt across much of the world.

Morgan Stanley said Britain’s travails are one of three “surprises” to expect in 2010. The other two are a dollar rebound, and strong performance by pharmaceutical stocks.

David Buik, from BGC Partners, said Britain is in particularly bad shape because the tax-take is highly leveraged to the global economic cycle: financial services provided 27pc of revenue in the boom, but has since collapsed.

The UK failed to put aside money in the fat years to offset this time-honoured fiscal cycle. It ran a budget deficit of 3pc of GPD at the peak of the boom when prudent countries such as Finland and even Spain were running a surplus of over 2pc.

“We need to raise VAT to 20pc and make seriously dramatic cuts in services that go beyond anything that Alistair Darling or David Cameron are talking about. Nobody seems to have the courage to face up to this,” said Mr Buik.

The report coincided with news that Britain is now officially the only G20 country still to be in recession. Canada reported that its economy grew by 0.1pc in the third quarter. Britain, by contrast, shrank by 0.3pc, the latest estimates show.”

Red Alert – the Second Wave of the Financial Tsunami

November 23, 2009

Second Wave of Financial Tsunami ?


Since the last quarter of 2008, unrelenting currency warfare has been waged by the key global economies and while this competition thus far has been non-antagonistic, it will soon be antagonistic because the inherent differences are irreconcilable. The consequences to the global economy will be devastating and for the ordinary people, massive unemployment and social unrest are assured.

The policy-makers of these countries faced with the total collapse of the international financial architecture have concluded that the solution, the only solution is quantitative easing (i.e. massive injection of liquidity) to salvage the “too big to fail” banks and reflate their depressed economies. This is best reflected in Bernanke’s candid remark that, “the US government has a technology, called the printing press (or today, its electronic equivalent), that allows it to produce as many US dollars as it wishes at essentially no cost”.

This is the crux of the problem!

The Irreconcilable Differences

Some two decades ago, it was decided by the global financial elites that the framework for the global economy shall consist of:

1) A global derivative-based financial system, controlled by the US Federal Reserve Bank and its associate global banks in the developed countries.

2) The re-location from the West to the East in the production of goods, principally to China and India to “feed” the developed economies.

The entire system was built on a simple principle, that of a FED-controlled global reserve currency which will be the engine for growth for the global economy. It is essentially an imperialist economic principle.

Once we grasp this fundamental truth, Bernanke’s boast that the “US can produce as many US dollars as it wishes at no cost” takes on a different dimension.

I have talked to so many economists and when asked what is the crux of the present financial problem, they all respond in unison, “it is the global imbalances… the West consumes too much while the East saves too much and consumes not enough”. This is exemplified by the huge US trade deficits on the one part and China’s massive surpluses on the other.

Incredible wisdom and almost everyone echoes this mantra. The recent concluded APEC Summit was no different. This mantra was repeated as well as the call for freer trade between trading nations.

This is a grand hoax. All the current leaders on the world’s stage are corrupted to the rotten core and as such have no interest to call a spade a spade and expose the inherent contradictions within the existing financial system.

The call for a multi-polar world is meaningless when the entire global financial system is based on the unipolar US dollar reserve currency. This is the inherent contradiction within the present system and the problems associated with it cannot be resolved by another global reserve currency based on the IMF’s Special Drawing Rights as advocated by some countries. It was stillborn, the very moment it was conceived!

The leaders of China, Japan and the oil producing countries of the Middle East are all cursing and pissing about the current situation, but they don’t have the courage of their convictions to spell it out to their countrymen that they have been conned by the financial spin masters from the Fed acting on the instructions from Goldman Sachs.

Tell me which leader would dare admit that they have exchanged the nation’s wealth for toilet papers?

Rothschild’s Control of Central Banks

November 3, 2009

Rothschild’s Control of Central Banks

The Rich have Stolen the Economy

October 17, 2009

Bloomberg – Geithner aides eraned millions working for banks, hedge funds

The Rich have stolen the economy

Max Keiser – Is the crisis over?

October 17, 2009

“JP Morgan, Goldman Sachs et al…all engaging in accounting fraud…”

Bank of England

October 14, 2009

Another article from the UK Column which explains the situation regarding The Bank of England……quite nicely:

Bank of England, Sterling and Government Treason

While we are here, it’s probably worth putting this one up aswell : exactly who are the Bank of England’s customers? No-one seems to know.

Some snippets:

“So if we add this all together, we have a nationally owned institution which has the monopoly in the production of the national currency, and has independent control of the country’s monetary policy in the hands of a Court of Directors who serve the private banking system as they have since the Bank was established.

Think about it – private banking control of our currency and monetary policy, fully independent of government. When Gordon Brown signed away government oversight of the Bank, he committed Treason on a scale not seen in Britain since the Heath government took us into what would become the EU.

Since 1998 we have seen the Bank rapidly inflate the money supply, while at the same time relaxing regulation on how banks could lend. No longer were banks required to have cash in reserve for loans they made. Instead the vast majority of currency entering the economy did so as a result of commercial banks entering some numbers into a ledger – money out of thin air, literally.

Working for the private bankers, the Bank of England set things up to maximise the returns for their banking colleagues’ speculative activities, in the full knowledge that as a nationalised institution, it would be the UK taxpayer who was carrying all the risk, and not, as would have been the case before 1946, the shareholders.

The Court of Directors is working for the Anglo/Dutch/Saudi empire – the still-alive-and-kicking hidden hand behind the British Empire of the Victorian age. So it’s no surprise that the solution they provide to today’s manufactured monetary financial collapse is to print more money. Their aim is to destroy the last vestiges of British sovereignty; for a hyper-inflated and hyper-devalued Sterling to be replaced by a single, global, currency, under a single world fascist government.”

Goldman Sachs- Financial Terrorists?

October 14, 2009

This is brilliant – a debate with Max Keiser on Goldman Sachs:

As an aside,  many may be aware that the Federal Reserve Bank in the USA was a private outfit, but how many people know that the FED and the Bank of England report to the Bank of International Settlements in Switzerland – “another highly corrupt institution ..thriving in the darkness of non-accountability and non-transparency”. I certainly didn’t until I saw this.

Recedentia: Legatum sounds the retreat

October 14, 2009

Nice article from the UK Column.

Recedentia: Legatum sounds the retreat

One of the few articles that mentions the repeal of the Glass Steagal Act in 1999 as a major cause in this financial crisis. They knew exactly what they were doing and the consequences, since this was originally  brought in after the Great Depression, to prevent it happening again!

Another source  that mentions the Repeal of the Glass Steagal Act is the Centre for Research on Globalisation,  and a lecture by  Michel Chossudovsky.

The 1999 Financial Services Modernisation Act was pushed though by Phil Gram in the last year of Clinton administration. There was a key role for Larry Sommers chief economist at World Bank, appointed secretary of treasury. Today he is advisor to Obama at the White House. So, some of the people who were the cause of today’s crisis have been brought in to provide the solution!

The Glass Steagall Act was repealed by the 1999 financial services modernisation act. The Glass Steagall Act was a reform policy of banking /financial sectors to stop fraud and speculation in the market which lead to the 1929 crash. It separated the commercial banks from the merchant banks / stock brokerage companies. i.e. to keep the speculators away from the commercial banks…. Commercial banks which lend money to the real economy.

The Financial Services and Modernisation Act allowed the merging of these financial institutions – merging of commercial banks and stock brokerage firms e.g. Chase Manhatten Bank to JP Morgan chase

Money transferred to hedge funds escapes regulation… offshore. The system encourages money laundering , & money escapes taxation. Financial institutions are doing this on a very large scale. Black money/dirty money (eg drug trade). Narcotics economy is massive , serving powerful interests. Columbia & Afganisthan: War and economic interests merging. There has been a 35-fold increase in narcotics production in Afghanisthan since it was invaded.

Derivatives & Bailouts : Wealth Transfer Systems

October 14, 2009

A video from Max Keiser “On the Edge”….