Nigeria’s Capital Market versus Global Financial Market Crisis (2)
October 9th, 2008 Ugonna Maduagufor || ugonna@stockmarketnigeria.com
The capital Markets all over the world have been experiencing a high level of depression, largely an aftermath of the bankruptcy threats from highly capitalized stocks. The said threats are largely due to long term financial credit policy loopholes in some of the major economies that matter in the global financial network.In spite of the strong fundamentals of Nigerian banks, their relationship with the dilapidating international financial giants could still be a head-ache for prudent investors. That is the down side of the much-advocated globalisation.
What started as large-scale sub-prime mortgage defaults among other ill regulated credit policies was hinged on giving out of varied forms of long-term loans to incapable/low equity beneficiaries. This cumulatively created room for the negative situation- Global credit crunch, which is a term for a situation whereby there is a low availability of credit facilities or a very high cost of loans (interest rates). The global financial system is such that debt instruments emanating from one country could be sold out in part or in-full to other financial institutions outside the original lending institution, even to foreign country financial institutions. Likewise loan refinancing, international finance affiliation, etc, has currently exposed the entire global financial system to varying degrees of the ‘loan default’ risk sharing.
The whole flop seemed to have peaked in the month of September in which Lehman brothers came into the news. More significantly, the largest insurer in the United States of America, ‘American Investment Group’ (AIG), a 1.1 trilion dollars asset-based group operating in about 130 countries of the world, caused so much panic not just in the United States capital market and white house but also in every other global affiliate of the group. Despite the $700 billion bail out plan by United States of America, $87 billion rescue plan for banks in England, and similar rescue plans all over the world, the markets are going down at an alarming rate, so much that the Russian Capital market is reported to be closed down for the third day today.
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Nigeria on the shortest possible note has nothing to worry about. I say this not on the condition that we are not doing very well but on the land fact that we are far from being a major player at the world level. however i shall defend soludo as never did for putting Nigeriaunder the knife for the past three years. I still want my friends at the nyc stock exchange and the rest of you in Nigeria to acknowledge that I was right about economic climate in USA heralding world wide economic crisis. The forum is tame in describing the size of the peoblim but this no problem at all if we look at the situation from a market perspective. I wish I could find a way to a least publish a short activity essay on why the world is facing a sharp trun in its financies. i shall hope that in future soludo will keep an open letter blog for the rest of us to reach him. CBN missed big chances on Wamu…Washington Mutual and Wachovia that went belly up two months ago. The ‘credit default’ indicated this even before they hit the market. Lehman came to the fore, it wassll already licking from many foreclosures. What the US congress falied to ask FULD RICHARD…LEHMAN BOSS is what his relationship to Mitshibutsi bank of Tokyo is IS mmITSHTUBISHI ww BANKS WERE HUGGING TOO MUCH ACTION and that will not have mattered so much if credit could have
Nigeria on the shortest possible note has nothing to worry about. I say this not on the condition that we are not doing very well but on the land fact that we are far from being a major player at the world level. however i shall defend soludo as never did for putting Nigeriaunder the knife for the past three years. I still want my friends at the nyc stock exchange and the rest of you in Nigeria to acknowledge that I was right about economic climate in USA heralding world wide economic crisis. The forum is tame in describing the size of the peoblim but this no problem at all if we look at the situation from a market perspective. I wish I could find a way to a least publish a short activity essay on why the world is facing a sharp trun in its financies. i shall hope that in future soludo will keep an open letter blog for the rest of us to reach him. CBN missed big chances on Wamu…Washington Mutual and Wachovia that went belly up two months ago. The ‘credit default’ indicated this even before they hit the market. Lehman came to the fore, it wassll already licking from many foreclosures. What the US congress falied to ask FULD RICHARD…LEHMAN BOSS is what his relationship to Mitshibutsi bank of Tokyo that acquired GOLDMAN SACHS that became a direct deposit bank,and why his sub prime lending was denied bailed by the treasurer paulson who was the former boss of Goldman sachs. BANKS WERE HUGGING TOO MUCH ACTION and that will not have mattered so much if the leverages were not up 30/1 -1 for most subprime. AMERICA runs on credit, and teh only problem with this new credit is that EURO pulled its plug from the americans…as such the whole business of function dichotomy is flawed, so is decopuling, so is ROBERT Mendel. Agreegate economists are having a good day… and might be jeering at grid economics but if the bifurcation of these two currencies…euro/dollars will continue, Britain for a start will shrink into a new iceland and the rest of the world will remain on this collision course. THE STUDY of two negaives is two year stretch, with BENANKE and US FEDS poking their noses at paper stubs…that is selling reserves on shortest lease, don’t expect AIG to be safe for long. The world need to fracture the euro in other to free up the market. i can’t wait for the war of markets to begin
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