Have CEO's messed with the CDO's?

While the world economy still tries to recover from the severe financial crisis of the last year, an

important discussion among economists has been erupted about who has made the biggest mistake. Many of them are not realizing that it

was the free market system that has made this large market failure possible. Let’s take a closer look at this market system, and especially the Collateralised Debt Obligations, also known as CDO’s.

Michiel Rabaeys

The treasury on fire

Problems for the US dollar, because, if interest rates stay around 3 percent, it seems that it will take 10 years to pay back the debt obligationsof the US. To even reach this goal, the US will have to stop spending money completely and the tax income has to keep level. The problem, the US is facing now, is an increase of the price levels, while the interest rates stays low. As a result, the investors start to loose money, ass the Dollar loses value against other currencies.

Glenn Saelens

Financial education in the classroom

In Scotland, the government has stated that every child should be taught basic financial skills integrated in regular lessons at school, as opposed to rare education through special events or as a part of other subjects. A survey revealed that especially secondary schools do not teach financial and money managing skills as a subject on its own, while in primary schools financial education is more coherent and planned. Also special schools place more importance on finance courses in their curriculum, because it's a necessary aspect of independent living. Scottish ministers and representatives from the financial services are now working out a plan that may already be introduced next year, so that all Scottish children are thought the basic financial knowledge they need in life.

Marlies Seynaeve

Bye buy hype

During the last two years, BEL20 companies have been buying back a vast quantity of their own shares, but the financial and economic downturn made this hype crash.
The BEL20 corporations used to purchase a great deal of their own shares to remunerate their staff or simply to destroy afterwards. At the moment, companies are only focusing on optimizing their cash levels in order to compensate their debts and survive the economic crisis. Apparently, cash is king during times of severe economic and financial recession and shares will be out on the market for everyone.

Astrid Thienpont

And finally.. We found a Winner!

Due the lack of economic growth, the Interantional Energy Agency (IEA) estimates that the worldwide emission of CO2 in 2009 will fall down by 3%. The economic crisis and governmental support for a cleaner environment have stopped the increasing emission of greenhouse gases for the first time in modern human history. Researchers who have calculated this significant decline, are saying that it only has meaning if we can make use of this unique "window of opportunities" and come to a deal in Copenhagen, at the UN climate change conference in December. However, it's not clear whether 2009 will become a real turning point in the battle against global warming or not...

Joris Jelle Ost

Belgians have 2 piggies!

Fifty percent of the Belgian people have more than one saving account.
These accounts are a safe place to keep their money and to gain something extra in the form of an interest rate. A main disadvantage of saving accounts is that their money is often tied up for a specific time, which means they can’t use it without paying large penalties. The fact that Belgians place their savings on several accounts is remarkable: but they only move a part of the first saving account to a second one, which is mostly a saving account from a little bank where they can take advantage of a temporary action.

Tine Vandekerckhove

Saving For Dummies

People who are overloaded by bills and do not have a clue how to start saving money, quite often wonder how other people manage to save three times their salary, the amount saving experts advise for emergency costs.

To begin with, you can save a certain amount of money by choosing the right bank and adjusted type of account with the highest interest rates and lowest taxes to deposit your monthly or weekly spared money.
However, some people are, despite the crisis, more likely to invest in the stock market by choosing a fund whose manager will pick the best stocks to maximize the invested money or by contacting a stockbroker and asset manager who will provide better value and performance while helping you to choose the right investment.
Although saving can become more difficult owing to the current crisis, you better look for a saving planner on the internet than cutting your own hair or making your own clothes, because these last two options are number seven and ten in the list of ten dumbest credit crunch tips.

Lisa Popelier

No painless way to avert future bank disasters

Lots of regulatory reforms aimed at the banks will slow down the global recovery of the bank system, warned Josef Ackermann, head of Deutsche Bank. On the one hand the man is absolutely right, because existing proposals are notable enough and new rules keep coming up, e.g. the tough new liquidity rules announced by the FSA (Financial Services Authority). These regulatory reforms will bring a cost that will incline banks' ability to lend, but regulators are aware of this tendency and the FSA has so far managed to flexibly implement this rules to prevent them from undermining the global recovery and economic competitiveness of the U.K. Anyhow, there will certainly be a heavy cost to the banks and some even to their customers, because there is no painless way to avoid bank failures in the future.

Philippe Pauwels

Source: Times Online - October 6, 2009 - No painless way to avert future bank disasters

European banks need to find €53 billion.

The European banks need to find $78 billion or €53 billion to get in line with the recommendations of Basel II. In Belgium, it seems that KBC would need €2.2 billion according to research of JP Morgan. From the $78 billion, $40 billion would be used to repay the gouvernments for their financial support a few months ago, the other $38 would be used to strengthen the balance sheet. The biggest need is with the German Commerzbank, they need to find $17 billion...

Tim Ravelingien

And then, there was a bank called Lehman Brothers

€ 482 million, that's the total amount that Belgians claim as a result of the bankruptcy of Lehman Brothers. Lehman Brothers was a very reliable investment but last year, the bank went bankruptcy. Not only American banks were hit by the crisis, or as a result of Lehman Brothers, but also Belgian banks, like Dexia, and Belgian companies. Today, Electrabel claims € 9 million and even some monestic orders in Belgium claims money from Lehman Brothers.

Salembier Niels

Stalking students

Banks are searching for any money, so instead of tempting rich older people to invest their money, they’ve started up a witchcraft on students. You can’t go anywhere without being seized by Promo girls and boys of different banks, which starts to be tremendously annoying! How desperate can they be if they tend to give more attention to moneyless students, turning over every penny they have, than older more well-off people who have more means and possibilities to invest in financial securities. Can anyone please tell those smart-ass ‘top-economists’, marketing and PR managers to stop trying to be ‘young and original’; just stick with the logical and traditional approach!

Verona Michiels

Australian central bank raises interest rate

The Reserve Bank of Australia raises its most important interest rate with 0.25%, now Australia is the first G-20 country that raises the rate again after the massive worldwide rate cut. Today, the Australian dollar rose opposite the US dollar to its highest level since August 2008. Because of the economic improvement, the Australian central bank will gradually slack the facilitation of the monetary policy. For many analysts, this raise is a surprise because there was already a lot of speculation about a stricter monetary policy.

source of information: De Tijd

Niels Odent

The end is near, or not?

The crisis has reached an end, so may seem. The house prices in the US have been rising since May this year and the markets are recovering again after a long depression. But some economists are very wary : the economy is rising only temporary and there may follow a new economic “bubble phase”.
Despite the( little) economic growth this quarter, people have to be very cautious according to certain experts. Even now, when optimistic figures brighten the market and overpower every criticism. Crispin Odey, a respected hedge fund manager, means that the market is now sponsored by the Government by a policy called quantitative easing. But until the bubble bursts, we should all enjoy it, so Odey.

Elien Meuleman

Gemstone in balance sheet

The collapsed company “wrekin Construction” had placed a gemstone in its balance sheet that helped to underpin its finances. The Gem of Tanzania was listed in the accounts at £11million. Administrators of Ernst and Young are now trying to sell the “Wrekin Ruby” by placing advertisements in a couple of gemstone magazines. But now that the purple ruby has to be sold, it appears to be worth a lot less, maybe just £100. If they at least find a buyer of course…

Olivier Parys

Belgian families becoming poorer?

Things are not going well in Belgium if we believe recent data about the economics of households. It says more than a quarter of the Belgian population don’t reach the minimum threshold of gross income and as a result they don’t need to pay personal income taxes. Furthermore, many also go in the red (last year for a total amount of 35 million euros), something which seems to be an increasing tendency in the last few years. And above all we must remember that the crises won’t have a positive effect on this, so who knows what the future brings.

Jannig Theeten

Banking crisis hits Flemish fathers and nuns

500.000 Euros, that is what the Brothers of Charity lost because of the bankruptcy of the investment bank Lehman Brothers. The Sisters of the Holy Vincent saw 1 million Euros vanishing into thin air. Both congregations have submitted an insurance claim, in the hope of getting a part of their money back. The Sisters themselves keep silence, but for the Brothers of Charity, a loss of 500.000 Euros isn’t a disaster; none of their projects will get into difficulties.

http://www.standaard.be/Artikel/Detail.aspx?artikelId=PR2FSUF7&word=bank

Thomas Standaert

Recessions create many opportunities

It sounds a bit strange, but it is true: you have to grab your chances in times of recession.

Slowdowns, as recessions are called often, are an ideal moment to reposition your company or start up a new business.

A great example of this theory are companies such as Hewlett-Packard, CNN and Microsoft who were founded during recessions and bear markets.

Like a very famous Dutch football player once said: “Every disadvantage has his advantages .”

Olav Schepens

Societe Generale plans capital increase

Societe Generale announced to raise 4.8bn euros to pay back the loans she got from the French state and is also planning to buy a 20% stake in Crédit du Nord from the Belgian bank Dexia. Since the end of last year, the French bank received 3.4bn euros of state aid to survive the financial crisis and now she wants to pay it back. The capital increase is with a 27% discount,the existing shareholders will receive an extra two shares for each nine shares they already own. SocGen is the second French bank, after rival BNP Paribas, which transit a capital increase to get rid off the state loans.

Wouter Swaanen

How the crisis can make you bigger

While other banks try to survive in these difficult economic times, the Dutch bank Delta Loyd is preparing an introduction on the fair. In this way they want to increase their finacial basis with more than 1.5 billion euros to take advantage of the market consolidation on the Belgium and Dutch market. The bank wants to give back security and transparency to their clients by offering them a more personal service and not by promissing them immense profits. I'm glad to see that the banks that didn't went along with the flow, are now being rewarded.

Daan Sarens

car sales have risen

More people are buying new cars in comparison to last year because the sales rates of September last year and this year show an increase of 11.4%.

A big reason for this is the support of the market by a scrappage scheme, which is voluntary scheme for motor dealers, if they join the scheme, people can buy a new car for £2,000 less if they let the dealers scrap their old car.

The government have now decided to even increase the scheme with £100m, because it will help to recover the economy.

The car that was sold the most in September, was the Ford Fiesta, this shows that a lot of people fiercely continue buying smaller cars.

Hanne Vancoillie

Obama is looking out for American students

Obama proposed a better student aid program to help American students financially. Most people do not know that life at college in the US can be very expensive, but even Obama and his wife, Michelle, experienced it first hand: they could not pay off their student debts until he wrote his first best-selling book “The Audacity of Hope” which was just three years ago. One item he wants to adjust in the program are the lenders: instead of receiving a loan from banks, for example Sallie Mae, students would be able to loan directly from the government. As a result, the American students would not have to be worried about their student debt as much as they do now.

Celine Rolly

Take your chances!

Obviously the way of banking is drastically changed in the last few years, customers are not that loyal to their banks anymore. Historically people would have one bank for whole their life, but nowadays they are starting to understand that they should look around until they find the perfect bank for every job. As a result, banks try to attract as much people as possible by offering special proposals to fit the customers’ needs. Despite the fact that this way of banking offers a lot of advantages, there are still many people who stick with the same bank and risk losing lots of money, just because they do not think it is necessary to put a little effort in their bank affairs.

Maaike Roekens

Waitress, a coffee and a salary raise please!

Good news for waitresses and bartenders in the UK, since bars and restaurants can no longer use tips as a tool to boost pay to the basic minimum. Trying to promote clarity and fairness, the government decided that the minimum wages in the hospitality sector should increase and that tips can only be used as bonuses for the staff. Despite the overall grateful responses and the welcoming union Unite, not everyone is pleased with the changes the government is pursuing. The British Hospitality Association fears that this switch will have the opposite effect and will lead to at least 5000 job losses, caused by the rising costs.

Lieselotte Switten

Credit crunch hits students

One out of three students is no longer able to attend university and live on their own because of the credit crunch. Therefore these students have to choose a university nearby and live with their parents to cut costs. Moreover they search for extra jobs during summer break to earn money while one out of four students even works during term time. According to Catherine McGrath, of Lloyds TSB, students with a low budget should make a financial planning so they won't have to worry about their financial matters during their education.

Philip Pensaert

IMF: “Credit risks remain elevated”

Although financial conditions have recovered noticeably since spring, the International Monetary Fund warns that there’s still a considerable risk of another downward spiral in global recession . The IMF estimates banking losses will amount to $2,800 billion, of which banks have so far recognized only $1,300 billion. Those additional deficits are expected to reduce new credit availability and decelerate the current economic recovery. “Considering its dependence on the banking channel and the substantial financing need of its residents, it’s the United Kingdom that appears most vulnerable to such credit limits”, the IMF added.

Bart Sleegers

The next financial fall-out might be in the pipeline

According to Deutsche Bank’s chief executive, Josef Ackerman, bad loans might trigger the next financial crisis. Even though most losses in mortgage backed securities have been taken, consumer loan losses and other losses tied to the crash of the subprime-mortgage market remain soaring. The unknown amount of repackaged mortgage debt and the rising number of homeowners, struggling to meet mortgage payments, warn us to remain cautious. The melt-down of the U.S. high-risk mortgage market isn’t over a year after it began, and economists still expect more banks to fold.

Recep Tuncel

Impacts of the economic crisis in delay

In spite of the economic crisis, 82500 jobs were created on the Belgian labour market in 2008, according to the national bank of Belgium this has been the largest increase since 2000.
This phenomenon is due to a delayed impact, the oscillations of the economic activity continue working with a delay of two up to three trimesters in the employment figures.
Therefore, the Belgian labour market will be faced with an economic regression in the future.
The most recent forecasts tell us that in 2009 over 36000 jobs are going to disappear and in 2010 about 80000 jobs will disappear.

Els Vandekerckhove

Do You Know Which Fees You Are Paying?

American bank giants promise to reduce the overdraft fees, withholding the fact that there a lot of other fees, of which people are not aware. The current uproar over the excessive overdraft fees oblige the banks to cut those fees. The fact that other fees can cost a person over 100 dollar a year is carefully hidden in the fine print. Hopefully, the bank giants will realize that drastic changes to the fee-policies are necessary.

Eveline Poppe

Blank pages for dismissed colleagues

There are various ways to challenge the redundancy of your fellow colleagues, but the pressmen writing for the Belgian newspaper “Het Nieuwsblad” really pushed it to extremes. Since six of their companions were to be discharged, they jointly decided to leave one page blank in every newspaper. Moreover, there will be a blank page for every day that goes by until the discharges are revised! Wonder what will come next: making profit on an idle newspaper?


Maxime Otte

Belgians eat less and save more

An inquiry of Fedis, the Belgian federation of distribution, showed that one fifth of the Belgian consumers saved on his expenses of food.
The common Belgian saved 15% in the first six months of 2009 which is 2% more than last year.
Not only the food, where particularly the A-labels suffer and the discounts are more often bought, but also the non-food and the catering industry suffered under the anti consumerism of the Belgian population.
Fedis has calculated that there will be only 1000 new jobs in the distribution sector in 2009 against 4000 in 2008 so it advised traders to try to entice clients by investing in renovation and expansion which can have advantageous results on the employment.

Wolf Vandekerckhove

Reporting on Economy Was Narrow

An American study of financial news coverage this year found that only a few topics were extremely highlighted by the media while the economic troubles of ordinary people were ignored.
It discovered that in February and March, almost 50% of all news articles discussed the financial crisis and three-quarters of those reports originated from Washington or New York.
The researchers of the particular research center claim that newspapers and other media should not have forgotten that they were talking about something that affected almost every American.
The researchers also discovered that Obama’s phrases about the economy were repeated most; an example:” the weight of this crisis will not determine the destiny of this nation.”

Philippe Peelman

ING banking and insurance activities might be split

The banking and insurance activities of ING might be split into two seperate companies. Nick Jue, co-chairman of ING Retail Netherlands, declared this last friday at a congres in Groningen. Jue said this in an answer to a question concerning the future of banking and insurance. The chairman pointed to the complexity of the two activities and preservation of core buisiness as a reason.

Nick Van Beversluys

Was massive government stimulus in the banking sector useless?

However governments have ploughed so much money in their economies to encourage banks to start lending again... it is getting harder for small and medium sized enterprises to get a loan.
If governments want their economies to recover; businesses, individuals and investors have to be able to borrow the necessary amounts of money to buy goods and stimulate demand. Despite the fact that local governments have spent billions of euros to make loans easier to secure, the European Central Bank's survey found that 33% of small and medium sized businesses had got serious problems with getting access to loans from banks.
So isn't it time for the Eurozone governments to rephrase their objectives and to find out what the banking sector is doing with their "well-spent" money?

Charlyne Vagenende

Ace group is last hope for milk sector

After weeks of protests across Europe, with farmers dumping milk stocks and withholding supplies, 27 agriculture ministers met to discuss low milk prices.
Farmers say their current production costs are more than twice the price they get for their milk, moreover there’s the fact that while farmers have seen the prices they receive for their milk decline by 40%, prices in the shops have only fallen between 1% and 2%.
For that reason the agriculture ministers decided that next week an European ace group of high level will meet concerning the future of the European milk sector.
The eventual intention is that the milk producers as of now will discuss with the processing industry and the distribution sector about prices with as head aim reach a better balance between supply and demand.

Lena Tanghe