Although market developments are moving quickly, I am going reiterate that the Watchdogs fundamental outlook for the second half of 2008 is playing out. The core scenario envisaged the collapse of a major US financial institution in H208. If you count Fannie Mae and Freddie Mac in that category (or, for that matter, IndyMac, which… [Read more]
Using the word ‘unprecedented’ too often risks diluting its significance. But with the US government’s rescue of government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, we are once again in unprecedented territory, following on from the Federal Reserve’s aggressive intra-meeting rate cuts, the opening of new Fed lending facilities, and the last-ditch rescue of… [Read more]
At the moment, the view of financial stocks is playing out. Remember the monthly chart we ran recently of AIG, which we said looked ‘awful’. Yesterday the price dropped to below US$24.00, despite the bounce in the Dow Jones index. This is not a good sign, and we continue to see the stock falling to… [Read more]