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  • Here comes the second wave of massive losses for banks in Europe and the U.S.?

    Banks in Europe and the United States will survive the second wave of massive losses from the credit crisis in the next few months, some of them can reach the position to fight for survival with limited access to additional funding, a report shows the credit agency Standard and Poor’s, cited from the Guardian.

    After six months in search of ways of securing the necessary financing banks will be forced to announce losses of billions of British pounds from the disposal of assets after the economic outlook for Western economies deteriorate further. In particular, the Agency expects deepening decline in U.S. housing market, which provoked the credit crisis last summer.
    The price of housing in some states has fallen by up to 50 percent, the effect has spread to markets worldwide. Housing in Britain have become cheaper by between 10 and 12 percent by next year and expect more falls.

    The report says that the estimated 250 billion dollar losses from the credit crisis, estimated at the beginning of the year, now has been increased to 378 billion dollars, and may be increased and to 500 billion dollars by the continuing decline in house price U.S..

    Recent drop in Lehman Brothers has further aggravated the situation since the bank was one of the major players who bought mortgage problem, which in some cases have lost over 80 percent of its value. Furthermore Lehman had a property worth 33 billion dollars a forced sale may affect even more the real estate market.

    Although state funds from countries such as Kuwait and China have managed to play a major role for banks like Barclays and Citigroup with a large capital injection, the report says they are not willing to invest more, while disruption of Western stock markets is not over. Korean state fund withdrew at the last moment of a deal to save Lehman, which led to its end.

    Without access to additional capital to offset losses from the real estate market in the U.S. and growing losses from the fall in house price in Britain, banks may prove very difficult situation of financial difficulties.

    “The financial industry attracted a huge amount of capital last year to offset losses, the report says. “Current market conditions, however, are less favorable and financial institutions waiting for them next wave of left with even fewer opportunities to raise fresh capital.”

    “The second half of 2008 may prove the most difficult test for the former global financial sector”, commented the company.

    Two more banks liquidate in U.S. Negative growth in Spain of the GDP decrease in mortgage loans Bank of America buys Merrill Lynch for 50 billion dollars Threat of forced sales over the papers of leading Spanish companies It is expected that 1.2 million homes in Britain can cost less than their mortgage 122.8 billion may not be enough to save AIG from bankruptcy Real estate funds in Asia has 10 billion dollars unused capital White House advises banks to open credit Investors in properties no longer sees Central and Eastern Europe as an area protected by crisis G7 draw everything necessary to unfreeze money and credit markets Provide up to 30 percent decline in the value of business properties in the U.S. The U.S. Federal Reserve provide 800 billion dollars to encourage lending The crisis of capital markets in the U.S. continues France is in recession, reported second quarter economic downturn, worse market conditions of employment and real estate Investors hover over the remains of sale for 1 billion pounds of UK Russian billionaire lost 230 billion dollars since the beginning of the crisis Fears of recession continued pessimism returned to Wall Street Volkswagen briefly became the biggest company in the world by market capitalization Sale of assets and shares of Fortis for 4 billion dollars is stopped The market for office areas in Europe asks for tenants HSBC - a conservative approach for the salvation of the crisis Bankruptcy of Iceland, IMF helps the country Strabag ready to buy Russian construction companies Significant growth of exchanges in Europe The price of oil continues to fall Investment and investitions in Russian business and market General Motors and Chrysler want help from the government for its merger UK interest rates at low levels for the past 57 years Most indexes in Europe decreased due to the bankruptcy of Washington Mutual U.S. automotive manufacturers can benefit from financial Rescue Plan Stock exchanges in Russia with great growth today United States stopped short selling of financial shares The meeting of G-20: The world has turned to a new economic order The crisis threatens the entire automotive industry Exchanges in Asia registered the most serious sessions in its history Executive Director of Internet company Yahoo is leaving his post Asian indexes increased up to today’s session Oil leaps to 5 percent, gold also rose up Car manufacturers in China seek government assistance Massive Israeli air raids on Gaza Sell the most expensive apartment in New York for 60 million dollars Indexes in the U.S. went to increase. Sales of new homes in the U.S. with unexpected rise in September U.S. market shares and Election LTCM confused as their marketing strategy relies on the lack of such “great” events. The price of oil went down again Possible regulation of markets for raw materials in U.S.
    Sunday, September 21st, 2008 at 21:42
    Tags: assets, banks, credit crisis, economic, financing banks, funds, house price, housing, market, mortgage, Real Estate
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