These are my links for September 24th:
- FT.com / Comment & analysis / Comment - European banking on borrowed time - This one is scary
Sit down before reading it
- Prem Sikka: Accounting for the auditors in a financial meltdown | Comment is free | guardian.co.uk - Audit opinions are akin to financial mirages. In recent weeks, within a short period of receiving clean bills of health Bear Stearns, Carlyle Capital Corporation and Thornburg Mortgage hit the financial buffers, closely followed by Lehman Brothers.
Time and time again it has been shown that the basic audit model is faulty. Private sector auditors cannot be independent of the companies that they audit.
- David Blanchflower: The time for inaction is over. We have to cut rates, and cut them now | Comment is free | The Guardian - He's right
Anything but significant cuts virtually guarantees mayhem
- FT.com / In depth - Buffett to take $5bn stake in Goldman - Maybe he'll bring some sense to the show
Certainly Buffett is one of the few to show he actually understands business fundamentals
That's the problem with bankers: they've never run a real business
- Washington Wire - WSJ.com : Democrats Poke McCain With Bermuda Ad - Will McCain's support for tax havens come back and bite him?
- Measuring the value of assets in markets that are no longer active - This should be a best seller!
- Taxpayers lose freepost for returns and bills - This is petty.
I call it a mistake.
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Richard,
The FT article regarding the future of continental banking is indeed important. When (note, not “if”) the financial contagion hits the financial firms there will indeed be mass hysteria in the street. A big reason is of the course the cradle-to-graver’s here in Europe turn to the state as the first, second, and always choice to shield them from reality. The various governments will over-reach (per as usual under governmentalism). One can see the preliminary ground-work being laid by both Chancellor Merkel and the German Minister for the Economy in their respective comments of the past few days.
Now, the important part, how to profit from this coming storm. It is a given to short the dollar (once the noxious bailout passes there will undoubtedly be a pop but buyer’s remorse will set in fast and furious). The euro should be long but in the short-term with the nimbleness to quickly reverse and short the euro in the coming months (once the madness contagion starts). The issue would be looking for a currency to long. One instinctively thinks about the Swiss Franc, but lots of banks there.