Video-o-rama: The unfolding financial crisis

By Prieur du Plessis, on November 13th, 2008 posted in: Investment, Markets, Money

A batch of interesting video clips about the election of Barack Obama and the unfolding financial crisis has appeared over the past few days as all and sundry are attempting to make sense of a rather murky picture. A number of clips that have attracted my attention are shared below.

Firstly, back to basics with a rudimentary explanation by Enspire of how the mortgage crisis came about. (Click here in case you missed Enspire’s previous video, “Understanding the financial crisis”.)

Enspire Learning: The mortgage banking meltdown

Source: Enspire Learning (via YouTube), November 12, 2008.

Next, a number of clips from various market commentators on the lie of the political and economic land, kicking off with a discussion between Charlie Rose and Al Hunt.

Charlie Rose: A conversation with Bloomberg’s Al Hunt about Barack Obama’s meeting with George W. Bush

Source: Charlie Rose, November 10, 2008.

Financial Times: Don Gogel on Obama’s America
“In Part 1 Don Gogel CEO of private equity firm Clayton, Dubilier & Rice, talks to Richard Milne about how Americas business will change under an Obama presidency.”

Click here or on the image below to view Part 1 of the video.

“In Part 2 Gogel talks about the state of the private equity industry, and the risks and opportunities the current market presents.”

Click here for Part 2 of the video.

“In Part 3 Gogel talks about how the credit crisis will change finance, banking and government regulation.”

Click here for Part 3 of the video.

Source: Financial Times, November 11, 2008.

Bloomberg: Paulson shifts focus of rescue to consumer lending

Click here for the full article.

Source: Simon Kennedy, Bloomberg, November 12, 2008.

Bloomberg: Harvard’s Frankel sees China plan helping global economy
“Jeffrey Frankel, a professor at Harvard University and member of the US panel that determines when economic recessions and expansions begin, talks with Bloomberg from Cambridge, Massachusetts, about the outlook for the US economy and China’s $586 billion economic stimulus package.”

Source: Bloomberg, November 10, 2008.

Clip Syndicate: Policy makers hold the key
“As the IMF lowers its global economic growth forecast, Olivier Blanchard explains the role and action policy makers can take to stem the crisis.”

Source: Clip Syndicate, November 10, 2008.

CNBC: Calls for bailouts
Discussing government help for struggling businesses, with James Galbraith, University of Texas economics professor.

Source: CNBC, November 12, 2008.

Bloomberg: Poole, Parry, Fisher and Levy on Fed rates
“Bond market bulls are counting on the Federal Reserve to push rates below the half-century low of 1% by year-end to avert a prolonged recession, allowing two-year note yields to decline to less than one percent for the first time since regular sales of the securities began in 1975. This report compiles remarks about Fed rates from William Poole, former president of the Federal Reserve Bank of St. Louis, Robert Parry, former president of the Fed Bank of Dallas, Mickey Levy of Bank of America Securities LLC, Richard Fisher, president of the Fed Bank of Dallas, Ajay Rajadhyaksha of Barclays Capital, Michael Pond of Barclays Capital, Marc Chandler of Brown Brothers Harriman, and Stephen Gallagher of Societe Generale.”

Source: Bloomberg, November 10, 2008.

Bloomberg: Naroff says curbing foreclosures key to housing recovery
“Joel Naroff, president of Naroff Economic Advisors, talks with Bloomberg about Fannie Mae and Freddie Mac’s potential plan for a new mortgage modification program and outlook for the US housing market. Fannie and Freddie will reduce principal or interest rates on some loans and extend the terms of others, people briefed on the matter said.”

Source: Bloomberg, November 11, 2008.

Financial Times: Meredith Whitney expects further problems for banks and financials
“In Part 1 of the video Meredith Whitney, managing director at Oppenheimer and one of the first analysts to predict in 2007 that banks would face enormous write-downs and balance sheet problems as a result of the housing downturn, says the crisis is entering a new chapter in which bank on-balance-sheet lending will start to shut down. She expects that there will be an actual contraction in the overall US market for mortgage lending, something she says has never happened before in the US.”

Click here or on the image below to view Part 1 of the video.

“In Part 2 Whitney does not expect a lot of banks to use the Troubled Asset Relief Program (TARP) to sell impaired mortgage-backed assets because doing so would require further write-downs. ‘The terms and the consequences are going to be too disruptive over the near term,’ she said. She says she really started to worry about bank balance sheets almost a year ago, and remains equally concerned today, despite the large amounts of capital that have been raised. The lack of earnings of banks will result in further job cuts in the fourth quarter, with ‘capital intensive players’ having to shed 25% to 30% of their work force.”

Click here for Part 2 of the video.

“In part 3 Whitney expects the US government to have to take further measures to back the banking system, ‘either by raising capital for these banks or do a stimulus program directly to the consumer’. She finds it hard to see how a new US administration under president-elect Barack Obama will be able to ‘rerail the economy after it’s been derailed’. She says the economic crisis is not just Wall Street’s issue; Washington was also involved.”

Click here for Part 3 of the video.

Source: Aline van Duyn, Financial Times, November 10, 2008.

Charlie Rose: A conversation with Bill Ackman, CEO of Pershing Square Capital

Source: Charlie Rose, November 11, 2008.

Financial Times: India’s economy hits “bump in the road”
“Ahead of the World Economic Forum in New Delhi, James Lamont talks to Pratap Bhanu Metha, president and CEO of the Centre for Policy Research, about whether India’s double digit growth dream is still alive.”