From the category archives:

finance

AIG and DZ Bank: Dumb and Dumber

16 March 2009

To date, in their efforts to make the Global Financial Crisis (GFC) even more disastrous than it already is, the US Government has pumped an extraordinary $170 billion into the American International Group (AIG), the humbled and humiliated insurance giant. AIG’s biggest problems arose from entering into enormous credit default swap (CDS) transactions. The reason [...]

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How Big Are Australian Banks?

4 March 2009

There is no doubt that the big four Australian banks have navigated the global financial crisis better than many banks around the world, particularly in the US and UK. However, there seems to be a pervasive tendency in Australia to overstate the success of the Australian banks. A couple of weeks ago, Michael Duffy wrote [...]

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Time for States to Give Up Borrowing?

24 February 2009

It hasn’t been a very good few months for the Australian State Treasury Corporations. While the ongoing global financial crisis (GFC) has been challenging for everyone dealing in the financial markets, conditions really got difficult for the States when banks began issuing bonds with Commonwealth Government guarantees back in December 2008. Things got worse last [...]

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The Amazing Shrinking Banks

31 January 2009

Last year, I wrote quite a few posts on the subject of the credit crunch, aka the GFC (“Global Financial Crisis”) or GD2 (“Great Depression 2″). Whatever you want to call it, it has been unfolding for almost two years, and does not show any signs of letting up yet. The hardest hit to date [...]

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Volkswagen: The Biggest Company in the World?

11 November 2008

One of the more peculiar stories of late in these times of turbulent financial markets is how, briefly, Volkswagen became the biggest company in the world. In the process, hedge funds around the world suffered losses estimated at over US$35 billion. Over the last few years, Porsche has been building a stake in Volkswagen. By [...]

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Australia and the Global Financial Crisis

25 October 2008

Over the last few months I have written a lot about the global financial crisis. My posts have focused on specific events as news has broken, ranging from a programming bug by Moody’s to the enormous US bailout plan and Government guarantees from Ireland to Australia. Here I will instead take a broader perspective and [...]

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Australian Bank Guarantee on Wholesale Debt

24 October 2008

In a post earlier this week, I wrote The Government was right to step in with the guarantee and it has doubtless provided some stability for a financial system that remains jittery, but the sooner the details are sorted out, the better. The main outstanding question I was referring to was how the guarantee would [...]

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Banks Covered by the Australian Government Guarantee

24 October 2008

Following the shenanigans in parliament earlier this week, the Government has modified their original 12 October media release about the Government guarantee for banks. In the process they no longer list the local and foreign banks covered by the guarantee, so with the help of Google’s cache* I am republishing the original list here. The [...]

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Market Capitulation

24 October 2008

Apparently the sky is falling, at least that is what stock markets around the world are suggesting. The Japanese stock market fell 9.6% today, the Korean market fell 10.6% and while the Australian market “only” fell by 2.6%, the Australian dollar is now down below US$0.65. European markets are already down 6-8%. There were dramatic [...]

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Update on the Guarantee of Australian Banks

22 October 2008

Treasury Secretary, Ken Henry, appeared before a Senate Estimates Committee today to provide some clarity on the nature of the consultation between the Government, Treasury and the Reserve Bank prior to the 12 October announcement that the Government would provide guarantees for all Australian banks. This followed yesterday’s article in The Australian which claimed that [...]

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