What’s Next

So what’s the plan?

Banks are scared silly. They don’t want to lend to one another, because with WAMU and Wachovia going under, they don’t know if they’ll get their money back. And this is a world-wide problem.

The latest proposal is to have the Feds inject capital into the banks, in a way that allows the government to profit somewhat from any upside. Other countries have done this during banking crises, and it can keep the banks from needing to shrink. But we need to get it in place quickly.

Because this crisis has been a high-speed train wreck, stemming from the drop in investor confidence that ensued after Lehman–and especially AIG–failed.

Buying toxic assets is fine, and an important part of the solution. But if the Western governments don’t cooperate soon to shore up banks around the world, that 700 billion will be lost in the sands of time.

Douglas R. Tengdin, CFA
Chief Investment Officer
Hit reply if you have any questions—I read them all!

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By | 2014-09-04T14:01:09+00:00 October 10th, 2008|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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