itsmeeeeeee

Title
Bankers, politicians warn of worsening crisis

Link
Bankers, politicians warn of worsening crisis | Reuters
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Excerpt

Bankers, politicians warn of worsening crisis
Sat Jan 26, 2008 10:00am EST

By Thomas Atkins and Clara Ferreira-Marques

DAVOS, Switzerland (Reuters) -
World business leaders said on Saturday the worst might yet be to come in a financial crisis driven by continuing fears of bank losses and uncertainty over U.S. emergency stimulus measures.

"It's going to take some time for these things to work their way through the system," Citibank Chairman William Rhodes told Reuters in an interview. "In a nine-inning ballgame, I think we're in the fifth inning."

Bankers listed their ills in public discussions but admitted in private hallway chats that there were few cures for a financial system faced with hundreds of billions of dollars in investments which have turned bad.

"It will be a while before you see a return of normalcy in banking and markets," Merrill Lynch CEO John Thain said.

Troubles in the U.S. housing market were likely to worsen this year, with interest rate cuts and a hefty fiscal stimulus package unlikely to offset downside pressures, he said.

...in one of the most pessimistic public assessments of the short-term U.S. outlook from a senior banker, he told a panel discussion he saw more trouble ahead for the broader economy.

His comments were echoed by Japanese Prime Minister Yasuo Fukuda who said the world economy faced growing downside risks against a backdrop of the U.S. subprime problems and a record rise of oil prices.

Other senior bankers, speaking in Davos under the condition of anonymity, shared Thain's assessment, describing the international banking sector as gripped by uncertainty, fear and distrust that had crippled their ability to lend and threatened to choke off economic growth.

"As we look out into 2008, I think there will continue to be downward pressure on home prices, that will continue to put downward pressure on all mortgage-related securities," Thain said.

"The Fed (rate) cut and the fiscal stimulus package are not going to help declining house prices in the U.S.. That problem is likely to continue."

MORE LOSSES TO COME

World Bank President Robert Zoellick said "Some firms are going to have some big losses (and) I don't think this has fully run its course."

Bert Heemskerk, chief executive of Dutch bank Rabobank, said European banks faced worse losses from the credit crisis.

"Quite a few banks are heavily involved, and in particular if you look at European banks, we have not seen the worst. The news has not been spreading out about the losses that the European banking system has to take," Heemskerk said.

Thain, speaking on a panel with IMF Managing Director Dominique Strauss-Kahn and French Finance Minister Christine Lagarde, said he saw problems in credit markets spreading into the consumer sector, with capital markets not returning to past levels in the short term.

"We have seen a great deal of interest on the part of those who have money around the world in investing in these financial institutions. That is a great vote of confidence in longer-term prospects for U.S. economy."

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Comment:

are you ready for some... M&A? thank goodness there are people around the world just itching to buy our souls!

...and note how NOBODY really thinks this stimulus package is going to do a damn thing.

i love how anyone living on social security doesn't get a dime.

__________________

Sean

The anarchist in me loves this, the multi business owner in me is shivering from the fright. Fuck it! It'd be worth it to watch this place turn back in time.