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Sense on Cents “Central Station”

Posted by Larry Doyle on March 13th, 2009 6:30 PM |

central-station-promo-3-boldI am pleased to relaunch our weekly departure from “Central Station” on Saturday mornings.  This endeavor here at Sense on Cents is a few hours of written Q/A with your resident host.  I like to utilize the theme of a ride on the rails, so please allow me to expound. 

With so many cross currents at play in the markets, economy, and world of global finance, where can one go to develop a framework of understanding, enjoy the company of friends, and make sense of the madness? Welcome to Sense on Cents “Central Station.” Our ride departs Saturday morning at 9 a.m. with an expected return at 12 noon.  While we traverse the curves along our track, we can address a wide range of issues, including: Obama’s economic plans, Secretary Geithner’s outlook, the market performance this week, month, and year to date, developments overseas, the outlook for our financial regulatory structure, issues of personal finance, or anything else on your mind. 

Our ride is most productive with as many people participating as possible. Please bring not only your questions, but also your views. Invite friends, neighbors, and colleagues along for the ride as well. 

Your conductor is not a professional financial planner. I recommend that you consult with a licensed, qualified professional before making any investment decisions. I am merely a Wall Street veteran looking to help you navigate the economic landscape!!   

Come on back tomorrow morning at 9, submit your questions in the comments section, and away we go.. Aaaaaaaaaaaaaaaall Aboard!!

LD

Mo’ Money…

Posted by Larry Doyle on March 3rd, 2009 2:48 PM |

There are a string of events in the market today that all highlight the need for entities to refinance debt and raise capital.  Given the tightness of credit and the onerous terms being exacted within the bond market, many firms are massively capital constrained. These issues are global in nature. From our friends at Bloomberg, I offer the links to a number of these situations. In light of these types of situations, one does not need to be in a hurry to buy stocks.  Additionally, given the demands for capital, I still maintain that rates are headed higher.

I will share with you some of the current problem situations getting serious attention:

1. GE Falls Below $7 on Concern Finance Unit May Need More Capital

2. Corporate Bond Losses Drive Investors ‘to the Bunker’

3. Metlife, Lincoln Sink as U.S. Stock Rout Increases Capital Need

4. German Real Estate Firms Owe Billions, Face Deadlines

LD

The Weakest Link

Posted by Larry Doyle on February 27th, 2009 10:45 AM |

It is widely believed that the weakest link in the global economy centers on Eastern Europe. In light of that, the leaders of 12 eastern European countries are holding an emergency economic summit this weekend. From that summit, it is expected that these countries will request an international bailout.

 As of now it appears the countries in greatest degree of stress are Hungary, Ukraine, and Serbia. The expectation is that the group of countries will request the European Union to arrange a $230 billion bailout package. Who would provide the funding? A conglomerate of European Central Banks, the International Monetary Fund, the World Bank, European Investment Bank, and European Bank for Reconstruction and Development.

A major issue for eastern Europe is that their creditors, largely western European banks along with western European countries, are not exactly in great shape themselves. These countries may look to accelerate their entry into the EU and the full adoption of the Euro along with it.

As the pressure and stress builds, the chance of political dislocation also grows.   

For further details on how Hungary Seeks $230 Billion Bailout for Eastern Europe.  I will be monitoring this situation as it develops.  As our global economy is very much interconnected, the increase in sovereign credit risks is a very serious concern. 

LD






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