Covenants may become THE story in 2009
Bankers’ Covenants .....You will only find three references to it on the BBC news website archive and it is not a phrase that normally sets the pulses racing, but I suggest that we will be hearing much more about bankers covenants in the coming weeks and months - so bear with the technical stuff - this really does matter!
read more...»
Bankers and the Blame Game
The BBC Today programme today covered an interview between Robert Peston and John Varley, CEO of Barclays on the extent to which the banking industry should accept responsibility for the financial crisis and the collapse in lending. This clip includes a section of the interview - the full version will be on Panorama - but the real value is the follow up discussion between Evan Davis and Professor John Kay in which John makes a telling point about the nature of banking risk. The kinds of bank loans that most of us need - to finance a home improvement, or a student loan or an extended overdraft to tide us over unemployment or a period of difficulty were not the types of risk-taking by banks that got us into this trouble in the first place - excessive leverage built on securitisation is the root cause of the crisis.
Evan Davis used to be taught at Oxford by John Kay - it was a delight to hear their conversation on radio this morning as I headed into the final furlong of the Christmas shopping - but the streets of my own home town were strangely quiet even by 11am when I headed home. Was it the same where you live?
John has a new book coming out next month which promises to be timely and enlightening - the title is The Long and the Short of it: A Guide to Finance and Investment for Normally Intelligent People Who Aren’t in the Industry - and it is available for pre-order now on Amazon.
B2BB - Back to Banking Basics
I have read much on the complex causes of the Banking Crisis but rarely have I heard an explanation as clear and compelling as that offered by Guy Ashton Head of Global Equity Research at Deutsche Bank at the school’s Stock Broking Society tonight.
read more...»Causes of the Crunch
What links the following?
China
The liquidity bubble
Search for yield
Sub-prime lending
Leverage
Originate and distribute
Alan Greenspan
The Democrats
The Republicans
Regulators
Credit rating agencies
Financial Services Authority
Greedy bankers
Consumers/housebuyers
Margaret Thatcher
Moral hazard
Gordon Brown
Mark-to-market accounting
Basel 2
Estate agents
According to Sean Farrell and Sean O’Grady from the Independent, they have all contributed in one way or another to the credit crunch. Here is the link to what is an excellent background article for students.
Anguished of Edinburgh
The BBC’ Business Editor Robert Peston offered a rapid fire tutorial in the credit crunch in his address to the Edinburgh Book Festival today. Some people have perhaps unfairly labelled him as “Pessimistic Peston”, the man who first revealed the state of the liquidity crisis at the Northern Rock in early September 2007. But he delivered an engaging and witty talk to a large group of the well heeled of Edinburgh who clearly have weighty financial issues on their minds.
read more...»Most Popular Topic Tags on the Economics Blog
recession, demand, economics, price, unemployment, prices, inflation, investment, costs, profit, downturn, supply, trade, debt, employment, confidence, euro, gdp, competition, capacity, risk, production, china, oil, incentives, exports, expectations, housing, pay, manufacturing, sterling, food, profits, property, mortgage, tutor2u, globalisation, banks, revision, slowdown, borrowing, usa, retailers, emissions, deflation, airlines, innovation, dollar, supermarkets, entrepreneur, efficiency, monopsony, elasticity, aqa, welfare, consumption, economist, productivity, keynes, saving, google, wealth, opec, depression, moodle, depreciation, jobs, competitiveness, credit crunch, economic cycle, cars, tim harford, externalities, stocks, infrastructure, environmental, strategy, carbon, vle, monopoly, subsidy, evaluation, eu, management, losses, protectionism, inequality, spare capacity, environment, poverty, bank of england, budget deficit, construction, behavioural, wages, macroeconomics, carbon trading, steel, commodities, output gap, skills, japan, oligopoly, imports, currencies, bbc, stagflation, contestable, agflation, cpi, farming, newsnight, choices, regulation, survey, taxes, government failure, itunes, minimum wage, lse, climate change, paul mason, population, intervention, keynes society, aviation, amazon, fiscal stimulus, single market, pricing, dan ariely, cartel, nationalisation, pollution, eton college, interest rates, shareholder, london, rationality, redundancies, market failure, rpi, mpc, shipping, behavioural economics, germany, robert peston, india, rsa, reputation, currency, quantitative easing, facebook, income elasticity, current account, stakeholders, brazil, coffee, savings, microsoft, monetary policy, crowding out, barriers to entry, collapse, multiplier effect, suppliers, economies of scale, price discrimination, uk economy, development, quiz, apple, surplus, taxation, labour market, tesco, free, scrappage, behaviour, tragedy of the commons, opportunity cost, open source, vat, smoking, cost of living, poverty trap, merger, growth, speculation, edinburgh, discrimination, ownership, cost benefit analysis, northern rock, global, ireland, supply chain, oecd, shareholders, scarcity, balance of payments, petrol, liquidity, duopoly, etonomics, iphone, trade deficit, starbucks, happiness, budget, human capital, subsidies, capital, immigration, eurozone, takeover, ecb, paradox of thrift, exploitation, advertising, wiki, public sector, utility, wants, labour force survey, peter day, tax, brand, blog, poland, iceland, foreign exchange, recovery, indirect tax, european union, robert frank, roger bootle, ocr economics, heathrow, hbos, hotels, freight, creative destruction, federal reserve, kaletsky, price war, information failure, spain, crude oil, transport, government borrowing, gini coefficient, sony, leverage, migrants, us economy, animal spirits, fishing, stephanie flanders, waste, information, milk, eu enlargement, anchoring, obama, aggregate demand, entrepreneurship society, needs, forecast, internet, discounting, real income, copper, deficit, contestability, nissan, evan davis, companies, fairness, geoff riley, blogging, standard of living, aqa economics, consumer welfare, martin wolf, renewable, labour mobility, collusion, imf, fair trade, pubs, income tax, obesity, res, disposable income, david smith, corus, national debt, devaluation, consumer surplus, vacancies, sub-prime, tariff, global economy, price capping, joint venture, twitter, accelerator effect, startups, guardian, yuan, youth unemployment, immobility, edmund conway, edexcel economics, redundancy, tata, walmart, relative poverty, sentiment, coal, tickets, vehicles, cash, diesel, base rate, russia, liquidity trap, contestable market, marginal cost, external shocks, movies, income elasticity of demand, libor, broadband, fixed costs, comparative advantage, accelerator, allocative efficiency, economic efficiency, pensions, training, king of shaves, satisficing, trend growth, undercover economist, hot money, congestion, price mechanism, deleveraging, positional goods, migration, jobless, social entrepreneur, apprenticeships, hyperinflation, age structure, cyclical, chris coleridge, monopoly power, financial times, ucas, pay cuts, reserve currency, ryanair, wheat, mervyn king, aldi, law of unintended consequences, carbon tax, gillette, deindustrialisation, yahoo, organic growth, barclays, price volatility, derived demand, liberalisation, house prices, richard thaler, royal mail, markets, diseconomies of scale, veblen goods, paul krugman, schumpeter, pension, demography, structural, logging, green revolution, tax burden, savings ratio, ocr, the economist, nhs, job losses, biofuel, drugs, gold, nelson thornes, scotland, cross elasticity, brics, redistribution, footfall, british airways, research, producer welfare, ebea, income distribution, social costs, ft, enterprise, general motors, natural monopoly, tariffs, o2, deforestation, economic welfare, bonds, asda, will king, automatic stabilisers, landfill, economax, energy, long tail, jim o'neill, disincentives, resources, profit margin, podcast, share prices, external shock, slump, philip allan, hedge fund, students, fiscal drag, hysteresis, ftse, elasticity of supply, buy to let, logic of life, contraction, equity, market structure, global business, oil prices, market power, health, ben bernanke, hedging, enlargement, retailing, supply-side, declan curry, nokia, price fixing, chris anderson, bric economies, diane coyle, dynamic efficiency, stimulus, hamish mcrae, toyota, john kay, fiscal policy, winners curse, zimbabwe, compound interest, contestable markets, frictional, rory cellan-jones, status races, claimant count, green shoots, repossession, eastern europe, healthcare, royal economic society, sustainability, public good, credit, superfreakonomics, vertical integration, inflationary pressure, invention, accession countries, probability, sustainable growth, gnp, fairtrade, freemium, g20, affordability, nairu,All tags
ECONOMICS TEACHER RESOURCE NEWSLETTER
Join over 4,000 other Economics Teachers in the UK and around the world who receive the tutor2u Economics Resource Email newsletter. Get special offers, first news of latest resources, teaching ideas, conferences and workshops.
Recent Threads on the Economics Teacher Discussion Forums:
Posts in: General Economics Teaching
Video Case-study - lunchtime prices slashed
Long Exam Example to Use for Revision Please?
Good hotel in London for school trip
Competitive Markets
Diminishing Returns
Complementary goods - HELP Please!
URgent Help Needed
Equilibrium concept
The price of life
Extended Project Qualification
