While last week’s assault on optimism was repelled, we don?t expect the same resiliency this week. On Friday, the Fed introduced its oddly uncontroversial stress test methodology called, ?Supervisory Capital Assessment Program?, and stated that most U.S. banks currently are well capitalized. The paper contained two scenarios; a base line and more severe economic downturn. The baseline scenario… (more…)
Developments surrounding the Swine flu continued to grab the spotlight, as the WHO raised the global alert from phase 3 to 4 last night. The renewed concern over the virus reportedly decreased risk appetite, causing global equity markets to decline. While analysts have begun extrapolating how growth and asset prices will be affected, we caution traders to take these reports/theories with a grain… (more…)
How quickly optimism fades in this uncertain environment. Risk appetite had rebounded in yesterday’s US session as comments by Treasury Secretary Geithner strengthened confidence in the banking system, by stating the ?vast majority of banks have more capital than they need?. In addition, Geithner stated that most banks have sufficient reserves and those that lacked adequate reserves, the… (more…)
GM has announced that its June deadline for payment of it?s debt is unrealistic ? in other words ? without government intervention bankruptcy filing is imminent. This doesn?t bode well with the general market sentiment as all GM creditors would feel a tight squeeze ? not to mention the countless suppliers and workers that would be out of a job. Luckily the U.S Government understands this and is… (more…)