Today in the economy

[Kirkland Laing]

are they going to get rid of direvatives?

No, but they claim they're going to regulate them. We'll see how much regulation they end up managing to legislate.

[BoomBoom]

The economy is so bad......
A hooker asked me to borrow $100 till she can get back on her back!

[killersheep]

4/6/09

Canada - Ivey PMI Index

Actual 43.2|Forecast 46.7|Previous Month 45.2|Previous Year 58.0

The Ivey Purchasing Manager's Index (PMI) determines the activity level of purchasing managers in Canada.
Any reading above 50 indicates expansion, while a reading below 50 indicates contraction. It gives an indication about the health of the manufacturing section and production growth in Canada.

[VictorCharlie]

Kirk,

Can you describe the "Sweden Solution" in regards to banking in layman's terms? Specifically, what is a bank's level three and what is meant by writing down a loan?

[Kirkland Laing]

Kirk,

Can you describe the "Sweden Solution" in regards to banking in layman's terms? Specifically, what is a bank's level three and what is meant by writing down a loan?

Sweden had a bunch of insolvent banks so it took them over, wipred out the existing shareholders and bondholders, converted the debt owed by these banks after assets had been accounted for into equity (new shares) and sold the shares to new investors who then owned the new cleaned-up banks.

edit : This explains it well and briefly :

http://www.nytimes.com/2008/09/23/bu...s/23krona.html

Level three assets are stuff that is difficult to value and are generally valued by the bank's own financial models. A financial model is basically a computer simulation designed to represent the earning performance or value assets within certain economic parameters.

If you bought an asset for a hundred dollars but the market subsequently only values it at fifty, then you'd write down your asset to fifty to reflect market value. Or if your asset was dodgy mortgage securities you'd tweak your financial model to claim that property prices were going to rebound in a few months and then not write down your asset at all.

[Kirkland Laing]

May 15 (Bloomberg) -- Treasury Secretary Timothy F. Geithner expressed confidence that Europe will resolve the debt crisis buffeting the region and said the U.S. economy is strong enough to withstand any fallout.

Geithner Sees Europe Managing Crisis Without Fallout for U.S. - Bloomberg.com

EDIT: This post for future reference.