Definitive proof that the Bank of England saw the financial crisis coming

Looking back in our archives this Christmas I came across a rather important article which I had half forgotten about. It dates from 2006, when the credit crisis was a mere apple in the financial system’s eye and the City was enjoying one of its biggest booms in history. The article, which can be found here, reveals that the Bank of England knew precisely what risk was posed by the dangerous build-up of debt which was brewing in the economy.

More strikingly, its Financial Stability Report from 2006 was as far as I can tell the first major institutional missive explicitly warning about the dangerous funding gap building up in the British banking system.

Read moreDefinitive proof that the Bank of England saw the financial crisis coming

Peter Schiff: US Dollar is on the verge of collapse; This is hyperinflation; This is Zimbabwe (12/17/2008)

Peter Schiff: “I am a 100% convinced that anybody who has their wealth in US Dollars will be just as broke as the people who had their money with Madoff.”

(All 6 parts are a must-see.)

Part 1 of 6

Source: YouTube

Read morePeter Schiff: US Dollar is on the verge of collapse; This is hyperinflation; This is Zimbabwe (12/17/2008)

Peter Schiff on CNBC: The government is pouring gasoline on a fire that it set (12/29/08)

“We are in the process of creating another Great Depression.” (Peter Schiff)

Part 1

Source: YouTube

Part 2

Source: YouTube

Peter Schiff: Our economy is broken and there is nothing the government can do to fix it

As recession fears cause the nation to embrace greater state control of the economy and unimaginable federal deficits, one searches in vain for debate worthy of the moment. Where there should be an historic clash of ideas, there is only blind resignation and an amorphous queasiness that we are simply sweeping the slouching beast under the rug.

With faith in the free markets now taking a back seat to fear and expediency, nearly the entire political spectrum agrees that the federal government must spend whatever amount is necessary to stabilize the housing market, bail out financial firms, liquefy the credit markets, create jobs and make the recession as shallow and brief as possible. The few who maintain free-market views have been largely marginalized.

Taking the theories of economist John Maynard Keynes as gospel, our most highly respected contemporary economists imagine a complex world in which economics at the personal, corporate and municipal levels are governed by laws far different from those in effect at the national level.

Read morePeter Schiff: Our economy is broken and there is nothing the government can do to fix it

Olmert: Airstrikes, blockade merely first stage in Gaza

A column of Israeli armored vehicles is deployed in a farmer's field Tuesday near the Gaza border.
A column of Israeli armored vehicles is deployed in a farmer’s field Tuesday near the Gaza border.

GAZA CITY (CNN) — Israel’s fourth day of attacks in Gaza sent the Palestinian death toll to more than 375 as the Jewish state’s prime minister warned Tuesday that the air offensive marked only the beginning, according to officials.

“We are currently at the first stage of the operation,” Prime Minister Ehud Olmert told President Shimon Peres during a morning briefing, officials said.

Related article: World rallies around Palestinians amid Gaza offensive

A girl in Caracas, Venezuela, holds a sign reading, “No more massacre in Gaza” at Israel’s embassy Monday.

Olmert’s summation came a day after Defense Minister Ehud Barak told Israel’s parliament that the campaign launched Saturday marked an “all-out war” against Hamas, the Islamic militant group that rules Gaza.

Read moreOlmert: Airstrikes, blockade merely first stage in Gaza

Japan’s Economy May Shrink 12.1% This Quarter, Barclays Says

Vehicles bound for export wait in a lot in Yokohama City, Japan on Oct. 27, 2008. Photographer: Haruyoshi Yamaguchi/Bloomberg News

Dec. 30 (Bloomberg) — Japan’s economy will probably shrink at an annual 12.1 percent pace this quarter, the sharpest drop since 1974, as exports collapse, Barclays Capital said.

Gross domestic product in the three months ending tomorrow will fall at almost three times the 4.1 percent rate previously predicted, said Kyohei Morita, chief Japan economist at Barclays in Tokyo, after reports last week showed industrial production and exports posted the biggest declines on record in November.

“Given the speed and the length of the contraction, this recession could be the most severe in the postwar era,” Morita said. “We expect negative growth will continue for a fifth straight quarter to the April-June period of 2009.”

Read moreJapan’s Economy May Shrink 12.1% This Quarter, Barclays Says

Treasury to Buy $5 Billion GMAC Stake, Expand GM Loan

Bailing out zombies with taxpayers’ money. But you can trust the government with your money.

“An open, competitive, and liberalized financial market can effectively allocate scarce resources in a manner that promotes stability and prosperity far better than governmental intervention,” Paulson said 21 months ago.

Treasury Secretary Henry Paulson declared that the current turmoil in markets and financial institutions ultimately will “make things better.” (September 15, 2008)

As you see Henry Paulson is a real ‘expert’ you can believe in.

A GMAC Real Estate sign, attached to a sign advertising 0% down financing, is posted in the front yard of a home in Norcross, Georgia, on Sept. 12, 2007. Photographer: Chris Rank/ Bloomberg News

Dec. 29 (Bloomberg) — The U.S. Treasury committed $6 billion to support GMAC LLC, the financing arm of General Motors Corp., the latest step in the government’s widening effort to keep the largest U.S. automaker out of bankruptcy.

Treasury said it will purchase a $5 billion stake in GMAC, and lend $1 billion to GM so the automaker can participate in a rights offering at GMAC to support the lender’s reorganization as a bank holding company. The loan is in addition to $13.4 billion the Treasury agreed earlier this month to lend to GM and Chrysler LLC.

The fresh capital from the Treasury’s $700 billion Troubled Asset Relief Program will enable GMAC to expand lending to car buyers, which in turn may help save GM. The company’s U.S. sales plunged 22 percent this year through November after GMAC — which financed about 35 percent of GM’s retail customers last year — ran short on cash and limited loans to people with only the best credit. The Treasury stepped in after Congress failed to pass an auto industry bailout earlier this month.

Read moreTreasury to Buy $5 Billion GMAC Stake, Expand GM Loan

It’s war to the end, Israel tells Hamas

Smoke billows from a site in Gaza today following more Israeli air strikes. Picture: AFP/Getty Images

ISRAEL today warned the people of Gaza that its attacks which have so far killed more than 300 were a “war to the bitter end”.

The statement from defence minister Ehud Barak came as jets obliterated symbols of Hamas power on the third day of its overwhelming assault.

They hit a house next to the Hamas premier’s home, devastated a security compound and flattened a five-storey building at a university closely linked to the Islamic group.

Related articles:
Six months of secret planning – then Israel moves against Hamas (The Guardian)
Two Israeli armored divisions stand by outside Gaza (DEBKAfile)
Mideast papers on Gaza (BBC News)
Gaza: where civilians become targets (The Guardian)
Aid reaching Gaza, but U.N. says it’s not enough (CNN)
White House blames Hamas for violence (msnbc)

Israel Moves Tanks Toward Gaza as Hamas Rockets Hit (Bloomberg)
Protests erupt in the Arab world against airstrikes (The Times)
Israel seals off Gaza periphery to journalists (Reuters)

Meanwhile there were reports that the Israeli navy had begun bombarding the area from the sea.

The death toll rose to 315, including seven children under the age of 15.

Read moreIt’s war to the end, Israel tells Hamas