Comments on: Crunch! Central banks move to save the planet http://www.crikey.com.au/2007/12/13/crunch-central-banks-move-to-save-the-planet/ now with extra source Sun, 12 Feb 2012 00:58:05 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: rc http://www.crikey.com.au/2007/12/13/crunch-central-banks-move-to-save-the-planet/#comment-7760 rc Thu, 01 Jan 1970 10:00:00 +0000 #comment-7760 Oops - apologies to Merryl Lynch. It was of course the Morgan Stanley crystal ball that was forecasting a fairyland "mild recession". ;-) Oops - apologies to Merryl Lynch. It was of course the Morgan Stanley crystal ball that was forecasting a fairyland “mild recession”. ;-)

]]> By: rc http://www.crikey.com.au/2007/12/13/crunch-central-banks-move-to-save-the-planet/#comment-7761 rc Thu, 01 Jan 1970 10:00:00 +0000 #comment-7761 There are quite a few banks around the world at the moment that are not just suffering "liquidity problems". It's more likely that they are INSOLVENT (read bankrupt) due to the subprime mess. So of course they are not gonna lend to each other! And no-one wants to talk about this publicly cos we don't want to see Northern Rock style runs on banks and mass panic which would hark back to what happened during The Great Depression. In truth there is nothing the Fed, ECB etc can do to solve insolvency problems via monetary policy, even with this unprecendented co-ordination. Batton down the hatches. That "mild recession" Merryl Lynch talked about the other day is gonna turn severely severe, and Australia won't be decoupling. This is THE media story that all news outlets not owned by Rupert should be watching. There are quite a few banks around the world at the moment that are not just suffering “liquidity problems”. It’s more likely that they are INSOLVENT (read bankrupt) due to the subprime mess. So of course they are not gonna lend to each other! And no-one wants to talk about this publicly cos we don’t want to see Northern Rock style runs on banks and mass panic which would hark back to what happened during The Great Depression.

In truth there is nothing the Fed, ECB etc can do to solve insolvency problems via monetary policy, even with this unprecendented co-ordination. Batton down the hatches. That “mild recession” Merryl Lynch talked about the other day is gonna turn severely severe, and Australia won’t be decoupling. This is THE media story that all news outlets not owned by Rupert should be watching.

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