G-7 Bankers Release Statement on Global Crisis
by Richard Lee
Not surprisingly, G-7 finance ministers released nothing but statements after concluding a rather publicized meeting in Washington DC on Friday. Previous rumors had circulated around a potential closing of global markets in order to rebalance current dynamics in the industry. However, at the end of the approximately 6 hour affair, policy heads were only able to issue a statement rather than specific solutions. Following a crisis of confidence in the market, the fall of major US investment banks and fixed income markets that continue to remain locked, leaders stated that “the current situation calls for urgent and exceptional action.” In addition, finance heads are looking to “take all necessary steps” in order to “unfreeze credit and money markets.” Fixed income markets ignored the generic pledge as LIBOR continued higher to well above the normal premium. At current writing, the benchmark rate is currently trading more than 100 percent above the Fed benchmark rate at just below 5 percent. The only consolation, it seems, is that interest rate swaps have narrowed a bit even as other spreads continue to reflect risk aversion and fear that continue to support the current bear market. Global markets have plummeted some 20 percent for the week, with the Dow Jones Industrial Average down approximately 40 percent for the year to date, closing down 128 points at 8,451.19. Looking ahead, trading may be thin on the Sunday open as US and Canadian markets observe a national holiday.
About the Author - Richard Lee
Richard C. Lee is the Chief Currency Strategist for OnlineForexTrading.com. Employing both fundamental and technical models, Richard has previously been featured on DailyFX.com, Bloomberg, FX Street.com, Yahoo Finance and Trading Markets.com. In analyzing the markets, he draws from an extensive experience trading fixed income and spot currency markets in addition to previous bouts in options, futures and equities.
October 12th, 2008 at 10:00 am
foreign currency traders…
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October 12th, 2008 at 7:56 pm
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November 17th, 2008 at 3:08 pm
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December 25th, 2008 at 12:27 am
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