Credit crisis worse than LTCM

NEW YORK, Nov 9 (Reuters) - The credit crisis gripping the U.S. is now worse than the crisis of confidence following the collapse of Long-Term Capital Management in 1998 and recession risks are growing, said Jack Malvey, chief global fixed income strategist at Lehman Brothers.

"This is the deepest correction we've ever seen in structured finance," Malvey said in an interview on Friday. "This is now worse than Long-Term Capital. This is so dispersed, so interlocked and the relationships among the various entities are not as evident. This is a painful lesson in financial engineering."


OUCH!


Via Reuters

Technical glitch throws FTSE into confusion

Opps ... some might have a long night ...


The result is quite interesting


I can imagine the face of the trading floors...

House prices to 'cool not fall'

So they say. We'll see next year, I'll bet on a big drop in next years. Do you remember the 90s ... It looks very likely that it's gonna be worse.

Via BBC

Brockwell Park Fireworks this friday

Lambeth Fireworks 2007

Lambeth FireworksFriday 2 November, 7.30pm
At Clapham Common, Brockwell Park and Streatham Common.
Free Admission

More info

Ready for Credit Crunch Act II ?

From FT Alphaville

Low interest rate are to blame

We also find that banks which are less-well monitored and disciplined (i.e., subject to more moral hazard) not only take on more risk but they especially take it when interest rates are low. Low rates therefore imply excessive risk-taking. When rates are low not only do these banks take on more risk, but loan spreads are further reduced at these banks despite the higher ex-post realisation of credit risk.

The impact of short-term interest rates on risk-taking: hard evidence

Renting cheaper than buying in 2006

Private rents in 2006 were two-thirds the cost of a 100% mortgage on a two- or three-bedroom house, for a young household on average incomes.

BBC


Thanks to, vonric