The tsunami of bad news keeps coming
The world financial system on the brink of collapse is the warning....
It is interesting that this warning comes from the UK, which after my brief experience living there and see first hand the dire straights of their economy, well, I have maintained that the pound is in really bad shape. They have huge social programs, high taxes and low services for the taxes paid. They have some interesting taxes as well, like the council tax renters pay, the TV tax, yes if you want to watch TV you must pay a TV tax. I think the pound has a ways to fall.
I suspect they'd collapse first.
Yves is reporting that hedge fund margins have been tightened. So hedge funds used to 15% have had margin requirements increase to 35%, forcing them to sell stocks. This would be deleveraging in action.
Lehman, a $270 billion insurance payout required? That's a lot of money....
The TED spread (the difference between the LIBOR interest rate and the three month T-bill) has increased to a record 4.65 today.
With the US dollar rallying I suspect that boost to tourism is going to dry up, expecially with people losing so much.