Credit "Heart Attack" Engulfs China and Korea

Credit "Heart Attack" Engulfs China and Korea

www.thebusiness.co.uk

The global credit crisis has hit Asia with a vengeance ..., triggering a massive flight to safety as investors across the region pull out of risky assets.

Yields on three-month deposits in China and Korea have plummeted to near 1pc in a spectacular fall over recent days, caused by panic withdrawls from money market funds and credit derivatives. ...rumours abound that Asian banks have yet to own up to their share of the expected $400bn to $500bn losses from the US mortgage debacle.

(visit the link for the full news article)



Related AboveTopSecret.com Discussion Threads:
Interbank Covered Bond Trading Halted on Volatility

The credit crunch comes to Asia.

This happened on the same day that the Europeans halted interbank bond trading: Interbank Covered Bond Trading Halted on Volatility

Seems like the global credit crunch is underway including the unwinding of the yen carry trade:

"The whole financial market is in turmoil..."

Mr Redcker said the flight from risk has led to a sudden unwinding of the $1,200bn yen "carry trade" as hedge funds and Japanese investors close risky positions. The yen has snapped back violently from yen118 to yen108 against the dollar since early October, with similar moves against other Anglo-Saxon currencies.

"We're seeing a liquidation of the carry trade.

If the Asian bubble is starting to burst it may be time for the economic meltdown that everybody seems to be talking about.
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www.thebusiness.co.uk
(visit the link for the full news article)

reply to post by Gools


Gools, is it just me, or does this look like the makings for a world wide recession? Perhaps a significant recession at that?

I expected home prices to have dropped far more then they already have, for some of us during these times it will be a great time to jump into the game while every thing is of lower value.

I've been calling for a second great depression since 2004: www.abovetopsecret.com...

In my opinion we'll be lucky to get out of this with a "simple recession".

If you're going to jump into the real estate market looking for bargains, I'd advise you wait until price levels return back to something approaching "normal" (just my non-expert opinion).

Remember where the genesis of this problem (other than peak oil) comes from:


.

edit: graph problems? Click on "open link in new window" just under it and expand to maximum size.

[edit on 11/22/2007 by Gools]

I'm wondering how prices will go in a hyperinflationary scenario. If bread cost $50, what would a house cost?

be wary of the demon stagflation,
en.wikipedia.org...

it can slay the mightiest economy!!

China has quietly ordered banks to freeze their lending through the end of the year, the Wall Street Journal reported on Monday, marking the latest in a series of measures to keep investment from running out of control.

www.cnbc.com...

Talk about a Credit Crunch! Hopefully it won't get that bad here in the US. Although I've heard that loans over 400k are already on the Endangered Species list. Easy Credit addiction is what created this bubble and now the 'dealers' are cutting off the supply. COLD TURKEY!

yet again Gools you point to the economic problems no one wants to speak about.

This is serious, it's going to smash the global economy to bits now.

Here comes the second great depression.

[edit on 25-11-2007 by infinite]

Investors fear new round of turmoil

Investors fear the financial system is moving into new credit turmoil, which could create further losses for financial institutions – and potentially hurt sentiment in the “real” economy.

Credit markets are trading at levels which imply that investors assume that the US is heading for a recession, bank analysts and economists have warned.

www.ft.com...

Thanks Gools for snipping that article. It's shows us all that the current phase of fiat insanity is not confined to the West. Greed is blind.

It's still amazes me how people will still consume like wild animals before a famine in light of all the news that we are going to have a hell of an economic train wreck unless we change habits. I guess addicts always want the hard lesson and the hoarding phase has just started.

Bear Market Reaper Cometh

Ron Paul: Stock Market Will Eventually Collapse Prison Planet

"They think that they can control it but eventually they can't, as powerful as they are eventually the markets are more powerful. The dollar can't be kept in check because eventually it will come unwound," Ron Paul said.

The Texas Congressman cited the repeal of the Insurrection Act as opening the door to a declaration of national emergency and martial law which could be instituted for any number of reasons, including civil disobedience in the event of an economic downturn and a run on the banks. "If in 6 months or a year there is total chaos who knows what they might try to do," said Paul.

International banks get dragged into financial crisis’ black hole europe2020

LEAP/E2020 now estimates that at least one large US financial institution (bank, insurance, investment fund) will file for bankruptcy before February 2008, sparking off bankruptcies among a series of other financial institutions and banks in Europe (in the UK especially), in Asia and in various emerging countries.

The triggering factors for a major financial institution to go bankrupt are now so powerful and warning clues so numerous that, according to our researchers, the probability that it happens within three month now reaches 100%.

Don't count on a Santa Claus rally this year...

[edit on 25-11-2007 by Regenmacher]

reply to post by Regenmacher


...those are some wild 'illustrations' -- I like the 'look' you're giving to the economic scene... this is a big story in the fact that China is dumping U.S. holdings and Japan is already trading on the Iranian Oil Bourse in non-U.S. currencies.

What is the time frame for this? When is this big crash going to happen. I'm not that up with the times on financial issues. It all sounds very confusing to me.

Are we talking about months? Years?