posted at 04:50
Author Name: Jim Edwards
Europe Banks See End To The Boom
The Bank for International Settlements - the Swiss-based financial institution that acts as a counterparty to national central banks - has declared that stock markets are currently in a "Euphoric" state and has urged central banks globally to begin tightening interest rate policies now while economies are growing rather than wait for another recession, when it will be too late. The subtext of BIS's annual report is that because many central banks have reduced interest rates to zero - the U.S. and Japan included - they are currently without weapons to boost the economy should another crisis hit. These words from the BIS ought to terrify anyone who thought central banks were unprepared for the last recession in 2007, when U.S. interest rates were "High" at about 5.3%:. Financial markets are euphoric, but progress in strengthening banks' balance sheets has been uneven and private debt keeps growing. One thing making people nervous about stocks these days is the fact the U.S. market has gone more than two years without a correction, or a 10 percent drop. Sort of like going two years without changing a car's oil, or two days without brushing your teeth, or two paragraphs into a column without a good metaphor. The value of global mergers and acquisitions hit $1.75tn in the first six months of the year, a 75 per cent rise on the same period last year and the highest since 2007. The value of U.S. M&A this year hit $748.5 billion, up almost 75%. In Asia-Pacific, the number hit $327.8 billion, up 85 per cent - a record since 1980, The FT says. In Europe, the $509 billion in deals was doubling over the year before.

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