This from Finextra …  as we forecast last year, this sub-prime crisis will have far flung effects, that few would have predicted.  Here we have an ATM manufacturer cutting 5% of the workforce. Finextra: Diebold cuts 800 jobs; warns of trouble ahead US ATM manufacturer Diebold is cutting 800 jobs – five per cent of its global workforce – following a disappointing 2007 and amid gloomy forecasts for the coming year as the credit crisis hits bank branch investment budgets. Continue reading Diebold cuts 800 jobs; warns of trouble ahead

If there remain any doubts about the impact on Bank lending policies outside US, then these stats from UK should put that debate to rest. Mortgage approvals hit by credit crunch – Times Online Only 42,088 mortgages were approved for new buyers by banks in December, lower than at any time since records began in September 1997, figures from the British Bankers’ Association (BBA) showed. Continue reading UK Mortgage approvals hit by credit crunch

Some numbers to back up the last post on the globalisation of Banks and funds from Asian investment.  Not that its good or bad … just something that is changing in the financial world.  In fact it is probably a good thing, because there is nothing like financial implications to drive rational decision making, and the increased global aspect brings different politics to bear. Citigroup and Merrill Lynch asking for more foreign cash | FP Passport Bloomberg notes, “Banks and securities firms in the U.S. and Europe have turned to Asian and Middle Eastern governments for about $34 billion to … Continue reading More on global investment in Banks and funds

With losses expected to exceed $3Bn related to subprime, CIBC is in for a tough road, and McCaughey is expected to go.  This makes the earlier view of $2Bn for Canadian bank losses laughably off.  Canada is looking at more like $6Bn + at this point.  In short, no-one knows.  As noted here this morning: “It reminds me of a time earlier in my career – junk bonds,” he said. “When they were run out of one man’s drawers [Michael Milken’s], it wasn’t a market. It wasn’t very transparent. Now high-yield bonds or junk bonds are a genuine asset class … Continue reading Wincing going on these days as investors watch Canadian Imperial Bank of Commerce’s subprime mortgage-related losses pile up

Interesting article on the sub prime crisis.  It asks some interesting questions, that pose at a minimum, uncertainty about the economy, and in particular Banks. Robert J. Samuelson – Another Credit Minefield – washingtonpost.com Credit and financial markets subsist on trust and confidence. The subprime crisis has corroded both. Estimated losses range upward from $50 billion. Because trading in subprime mortgage securities is thin, how can they be accurately valued? Who holds them? Banks and investors have reacted to these uncertainties. For example, banks now find the “interbank market” — banks lending to each other — riskier than before, because … Continue reading “The subprime debacle also posed a question: What if it’s not the only problem?”