User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Wednesday October 8, 2008 - 19:49:44 GMT -

Share This Story:
| | Email

Forex Blog - Leaving the Bunker  

Leaving the Bunker

I am starting to think we are close to the end of the banking crisis or as I like to think it will be referred to in history, the end of the Bank Panic of 2008. 

First of all let me define “end” of the panic.   This means stabilization of the crisis and gradual return of interbank lending, commercial paper market, steeper yield curves and confidence in banks from the lowest to the highest levels. 

Today’s joint rate cut from the ECB, Fed, BOE, BOC, SNB and Riksbank (later from PBOC) is less significant in terms of what it can do for restoring bank lending directly than it is for confidence in the highest level of coordinated policy responses.  If G7 were a currency, yesterday it looked like the Thai baht in the Asian currency crisis and today it is looking like the yen.  Don’t get me wrong, I have been as skeptical of G7 effectiveness over the last 8 years as anyone…more like D7 for dysfunctional 7.  But necessity is always the mother of invention and in this case reinvention.  Never has G7 cut rates (or raised them) all at the same time.  Even in Plaza rates were moved in a coordinated fashion but not simultaneously.  And it is no less remarkable that JC Trichet and his band of ECB brothers and sisters joined in the move after having hiked rates in July and met as a policy making body last Thursday when all it could say was it discussed a rate cut but voted unanimously for no change in official rates.  

But more spectacularly, the ECB announced later today that it would provide unlimited funds to the money market at a fixed rate ahead essentially putting a ceiling on cost of official funds.  Additionally the ECB narrowed the band in which it pays interest on reserves held at the ECB and on emergency loans it charges banks for money borrowed from the Bank (like the discount rate) to 100bps from 200bps, something JC Trichet said wasn’t even discussed at Thursday’s press conference when asked by a reporter.  In other words the ECB is acting like the Fed.  A central bank possessed.  A central bank that gets the gravity of the problem.  Look for the ECB to borrow more from the Bernanke playbook ahead.  

The UK response earlier today is also a game changer for UK banks – they will not be allowed to fail.  They may end up with large government stakes but they will not fail and deposits and liabilities have largely been underwritten by the government today and the larger the state buy in the lower the common stock will fall (TARP offers US Treasury the option on buying shares, likely preferred with Buffet like dividends, in financial firms, a far more direct means for recapitalizing a bank and the sooner this starts the better).  And the BOE apart from cutting today is also making an enormous amount of liquidity available to the banking system. 

While the EU leadership meeting at the weekend in Paris and Eurogroup and Ecofin meetings in Luxembourg Monday and Tuesday failed to come up with a systemic response which disappointed many in the market, it was clear from the outset that there could only be an ad hoc state-by-state response to the banking crisis and by its design (monetary union without political union) Europe would be late to the bank rescue game… it will be there in the not too distant future despite the incompetence demonstrated in the last two weeks by the likes of German Finance Minister Steinbreuck who still believes German banks are adequately capitalized for some of the highest leverage ratios of any banks on the planet. 

I can’t even begin to list all of the steps US officials at the Treasury and Fed have taken in the last three weeks…several dozen at least.  It takes time amidst a panic for markets to see the forest for the trees.  But assuming banks start lending to each other and to customers gets started soon, in due course the panic will fade and everyone can then focus on the next key issue or issues.  How long and deep is the global recession ahead and how is it paid for (including bank bailouts) which raises crowding out issues on a massive scale and for large debtor nations questions about currency values ahead?

As for getting interbank lending going, look also for an ad hoc state-by-state response to guarantee bank-to-bank loans…capitalized by governments and as an insurance charging participating banks a fee.  This should be clear by the end of Friday’s G7 meeting in Washington if not before.

As I write, Secretary Paulson is on the TV calling a G20 emergency meeting – perhaps to follow G7 – presumably this weekend to address the financial crisis.  Also Germany and France have announced they will coordinate a dual response to the banking crisis.

Banking business is forever changed and so too is non-banking financial business from hedge funds to insurance companies.  I can’t say when we should get bullish on the future over asset prices, including though not limited to stocks, but I think I can say we should stop being bearish on credit, bank lending and the major solvency issues for G7 financial institutions.  My take is a 2-year recession/stagnation period before business investment and corporate profits revert to the mean.  I think in due course the dollar must weaken versus major currencies (it has versus the yen and has more to go) in due course.  But upside risks for the USD remain as long as investors and speculators are long risk and have a need to deleverage.  And as best I can tell European banks remain highly leveraged and vulnerable to selling assets with or without CDS in place to “harden” credit quality of the banks’ balance sheet.  Europe needs to figure out an orderly process for deleveraging European banks and the sooner the better (super duper SIV can be expected).   

So I am leaving the bunker today, tough I still have my lacrosse helmet on and strapped tightly.  In a week I think I can remove the helmet and stop worrying about buying T-bills, gold and selling everything else.  I may also take my wad of cash at home (zero cost insurance against a bank holiday or closing of ATM networks) and put it back in my local bank.

David Gilmore


Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."

Actionable trading levels delivered to YOUR charts in real-time.

Register To Test Your Amazing Trader

GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium

Mon 23 July 2018
A 14:00 US- Existing Homes Sales
Tue 24 July 2018
AFlash PMIs
Wed 25 July 2018
A 08:00 DE- IFO Survey
A 14:00 US- New Homes Sales
A 14:30 US- EIA Crude
Thu 26 July 2018
AA 11:45 EZ- European Central Bank Decision
A 12:30 US- Weekly Jobless
A 12:30 US- Durable Goods
Fri 27 July 2018
AA 12:30 US- GDP
A 14:00 US- Final University of Michigan

John M. Bland, MBA
co-founding Partner,

Global-View Affiliate Program

We are starting an affiliate program to market some of our products.

Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.

Put the word "affiliate" in the email subject line.

Contact us

Start trading with forex broker Markets Cube

Max McKegg's Daily Forex Trading Forecasts

Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.

Request a TRIAL of Max's Forex Service.


Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map

Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.



By using this website, you are agreeing to our Privacy Policy and Terms of Use, and Cookie Policy

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105