Bad news in banking was the real story in the same day at the markets surge on positive economic data. Federal Reserve new capital requirements, totally defunct Congress leaving for recess with no extension of the payroll tax cut or unemployment benefits, and the IMF warning on world economy were a combination of news stories via the Drudge Report with major impact for the banking industry. The surge in stocks were followed by Monday's routing of bank stocks due to uncertainty in Europe. The commonality of all these issues for the banks is uncertainty. The new capital requirements will place additional strain on Bank of America. The bank has taken a beating in stock price, foreclosure practices, and consumer satisfaction to question the viability of the bank to survive the ongoing challenges. Second, a tax increase and unemployment benefits ending for many Americans in lieu of a deadweight Congress will be a tipping point for consumers who were able to keep up payments on … [Read more...]
Banks face uncertain times in lieu capital liquidity requirements, Congressional inaction, and IMF warning
Britain Stands at Forefront as Eurozone Slips Toward Collapse
Britain scrambles as the debt crisis worsens in Europe. Britain is one of ten countries that does not use the Euro for monetary currency exchange, but the demise of the Euro would have insurmountable impacts on Britain and the Island Kingdom. Britain's fortunes are not easily decoupled from mainland Europe. History has seen aggressors of rival powers being the insurmountable threat, but this modern-day threat is economic as the collapse of the Euro would bring a harsh backlash to Britain. A debt contagion crisis to cripple government finances, 40% of British trade is with the Eurozone region, Foreign offices being overran by British citizens with no money and involved in civil disturbances, and a domestic banking system exposure in lieu of a European collapse. The unthinkable has become the thinkable in a potential total collapse of the Euro with global ramifications unimaginable as bank failures and civil unrest will be unprecedented in the history of humanity. Britain has stepped … [Read more...]
