Dear SAP Banking community members,
As you know, the Financial System is in a historical moment, the 2008 crash with the Lehman Brothers collapse as the most visible event, has triggered the deepest recession since the Great Depression of 1929.
At the same time, governments all over the world have jumped to the rescue of the main local and international Banks with initiatives like The Emergency Economic Stabilization Act of 2008 in the USA, or the United Kingdom bank rescue package plan, amongst others similar in many countries.
Simplifying, a huge amount of liquidity has been dropped in the system with the hope of stabilizing it and recovering “trust” and economic activity.
But solvency and liquidity are very different concepts. More than two years after the crash, what are the results of the rescue and stimulus plans?
Two Euro-zone countries (Ireland and Greece) have been rescued already and two more (Portugal and Spain) are moving into the dangerous area.
http://ftalphaville.ft.com/blog/2011/01/06/450981/president-trichet-are-you-watching/
The rating levels of US bonds are starting to be under discussion
http://www.cnbc.com/id/40641123
with a direct impact in the long term sustainable growth
http://www.bloomberg.com/news/2011-01-05/pimco-s-gross-says-investors-should-fear-mindless-u-s-deficit-spending.html
And what for me is the most clear indication that the liquidity and rescue packages have delayed the problem but solve nothing, without strong economic activity, oil prices have reached pre-crisis prices.
http://www.bbc.co.uk/news/business-11917152
In my opinion, we’ve transferred the solvency difficulties of the Financial System to the public system, but the lack of trust in the economy remains, and trust is in the foundation of the Capitalist system.
Some economists are warning that those dangers (and others) are nesting “another crisis”.
http://baselinescenario.com/2010/12/30/why-cant-europe-avoid-another-crisis-why-cant-the-u-s/
In my opinion they’re wrong. It is not another crisis, it is the same.
The only real way of recovering the trust is information, disclosure…
Liquidity as sex can be very pleasant but it does not last, love as solvency can be difficult to achieve but it does.
By the way, a funny film.
http://www.imdb.com/title/tt0105912/
Kindest Regards.
Ferran.
As you know, the Financial System is in a historical moment, the 2008 crash with the Lehman Brothers collapse as the most visible event, has triggered the deepest recession since the Great Depression of 1929.
At the same time, governments all over the world have jumped to the rescue of the main local and international Banks with initiatives like The Emergency Economic Stabilization Act of 2008 in the USA, or the United Kingdom bank rescue package plan, amongst others similar in many countries.
Simplifying, a huge amount of liquidity has been dropped in the system with the hope of stabilizing it and recovering “trust” and economic activity.
But solvency and liquidity are very different concepts. More than two years after the crash, what are the results of the rescue and stimulus plans?
Two Euro-zone countries (Ireland and Greece) have been rescued already and two more (Portugal and Spain) are moving into the dangerous area.
http://ftalphaville.ft.com/blog/2011/01/06/450981/president-trichet-are-you-watching/
The rating levels of US bonds are starting to be under discussion
http://www.cnbc.com/id/40641123
with a direct impact in the long term sustainable growth
http://www.bloomberg.com/news/2011-01-05/pimco-s-gross-says-investors-should-fear-mindless-u-s-deficit-spending.html
And what for me is the most clear indication that the liquidity and rescue packages have delayed the problem but solve nothing, without strong economic activity, oil prices have reached pre-crisis prices.
http://www.bbc.co.uk/news/business-11917152
In my opinion, we’ve transferred the solvency difficulties of the Financial System to the public system, but the lack of trust in the economy remains, and trust is in the foundation of the Capitalist system.
Some economists are warning that those dangers (and others) are nesting “another crisis”.
http://baselinescenario.com/2010/12/30/why-cant-europe-avoid-another-crisis-why-cant-the-u-s/
In my opinion they’re wrong. It is not another crisis, it is the same.
The only real way of recovering the trust is information, disclosure…
Liquidity as sex can be very pleasant but it does not last, love as solvency can be difficult to achieve but it does.
By the way, a funny film.
http://www.imdb.com/title/tt0105912/
Kindest Regards.
Ferran.
No comments:
Post a Comment