The Year of Living in Denial

Exactly one year ago, central banks and finance ministries spent the US Martin Luther King, Jr. holiday weekend cobbling together a response to a run on markets prompted by the woeful condition of the monoline insurers. The fact that a year’s worth of ever-more desperate measures has yielded insufficient results is reflected in these stories. The first, from the Financial Times, covers the incoming Obama administration’s measures to get banks lending again:

Read the story

The second and third deal with the UK’s new package, and the negative response from markets to it thus far, perhaps due to the astonishing losses (up to 28 billion pounds–that’s US$40 billion–for 2008, the largest corporate loss in British history) suffered by Royal Bank of Scotland, which investors may feel evidences still greater losses (and more state aid) ahead. The first article is from the
Financial Times again, and the second from the Guardian:

Read the first story

Read the second

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