Saturday, October 4, 2008

George Soros

I wanted to mention this gentleman for a while. He's best well known as the man who broke the Bank of England. His Quantum fund was behind the huge short selling of British Pound on the 16th September 1992, that brought it onto its knees.

Other than that instead of me repeating information that is already out there, definitely check out wikipedia article or much better the numerous books he wrote. In short, Soros is a philantroper, phylosopher and a successfull fund investor.

What I like about this guy are his thoughtfull insides into current issues. He's also a man who is not scared to stand up for the right thing he believes into. Soros also acknowledges that he can be wrong and doesn't make an issue of it but accepts the world as it is, that it is full of biased opinions.

Check out some of his interviews available online:

Friday, October 3, 2008

Rescue Bill passed!

I was just reading an article about Alternative solutions to the currently discussed $700 rescue bill when I checked the news to find the House has passed it. http://biz.yahoo.com/ap/081003/financial_meltdown.html

As I was reading I started to be more convinced that the bill isn't a fair solution and may have many implementation problems. I think Nouriel Roubini's quote summs up nicely, the feelings of so many people who opposed this bill:

It is pathetic that Congress did not consult any of the many professional economists that have presented – many on the Monitor Finance blog forum – alternative plans that were more fair and efficient. This is again a case of privatising the gains and socialising the losses; a bail-out and socialism for the rich, the well-connected and Wall Street. And it is a scandal that even Congressional Democrats have fallen for this treasury scam that does little to help millions of distressed, debt-saddled home-owners."

or maybe "yes" after all???

Friday 3rd October 2008 - the House of Representatives of United States Congress is to vote on an ammended version of the $700bn rescue package.

The ammended version still consists of a $700bn made available to the Secretary of Treasury for buying out the troubled Mortgage backed Securities, however the package now also includes $100bn worth of tax breaks and increased government's guarantee on savings from $100,000 to $250,000.



Only on monday the initial version of the rescue package has been declined by the House however later this week a slightly changed version of it has passed the Senate and now needs final approval by the House. Check out how the Senate and House of Representatives work - http://en.wikipedia.org/wiki/Concurrent_majority

It is now 6:30 Greenwich time and the House should be voting soon on the "Emergency Economic Stabilization Act of 2008", the expectations are very high and markets have been extremely volatile this week. FTSE-100 incrased by over 2% in the last trading hours and the Dow Jones is up by 2.80%

An open letter to the congressed endorsed by over 200 economists pointed out the pitfalls of the current rescue plans [see: http://freakonomics.blogs.nytimes.com/2008/09/23/economists-on-the-bailout/]

I am doubtfull the rescue package will pass, however there is a lot at stake for some high-profile characters and only a couple votes are needed to shift the cards around...

Tuesday, September 30, 2008

So no approval, hmm...

Rescue package didn't gain congressional backing. There was always the possibility of this happening, the rescue package of $700b announced on 19th September has failed to get approval by lawmakers. The effect was a fall of UK's FTSE 100 index by 3% before recovering to rise to 0.3% by later morning hours. Biggest losers was the banking sector in the UK, with HBOS down 10% and Royal Bank of Scotland 10% lower. Relevant articles can be found on http://news.bbc.co.uk/1/hi/business/7643441.stm and http://biz.yahoo.com/ap/080930/wall_street.html.

  • Dow Jones fell on Monday 29th by 6.98% (777.68 points) one of the largest one day drops ever
  • In the UK, FTSE 100 fell by 3% early morning but recovered quickly. Hopes in Europe are still strong on getting a rescue package approved soon.