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Listed below are comments made by Cognos between Thursday, 4th September 2008 and Sunday, 28th September 2008.

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B&B: end of an era 10:26pm on 28 Sep 2008 If Fortis is nationalised tonight or early next week by the Belgian government, what will happen to the ABN AMRO retail assets which I believe are still owned by the RBS acqusisition vehicle? Is RBS left owning these assets and do these cause a further burden on RBS' stretched capital ratios?
New world order 09:45am on 18 Sep 2008 Was the US panic yesterday because market participants think there will be no US Treasury/Fed support for wholesale institutions, just for consumer related ones? This sees to be Robert Peston's interpretation of reactions to the AIG "nationalisation".

Or was it because Paulson and the Fed looked at the derivatives book of AIG and the wider portfolio of the AIG Financial Products group and saw the "Heart of Darkness". A complex, massive position which was impossible to value and where the funding requirement has gone from $20, to $40, to $75 and then to $85 bill in six days, and who knows what it really is? A company which reached into almost every significant financial institution in the world, and whose bankruptcy would force realism into derivative books across the globe?

The UK government has moved aggressively and sensibly to move HBOS into a company which has been much more conservative about its lending.

Who is monitoring and is ready to act with the transnational banks and insurance companies in Europe?

What are the infrastructure banks and PE funds doing about funding now their business models (like investment banking) are looking "old world"?

It seems to me that there needs to be coordinated US and European and Chinese intervention to lay out a medium term solution (medium term = weeks and months, not fire fighting).

Underlying this whole crisis is a massive US fiscal and current account imbalance, which has been funded by Chinese and Arab money. Consumer spending is being buoyed up by a return to negative interest rates in the US. But negative interest rates didn't get the Japanese consumer spending again in the mid-1990s.

It would be great to think that the financial crisis and the property asset price drop can be sterilised from the real economy, but the real economy of consumer and capital spending has been sustained by fantasy economics - a fantasy that US consumers can spend forever without saving, that companies can leverage without undue risk, and that investment banks and hedge funds are perpetual motion machines

The one thing that we don't want now is a sell off of the dollar. The ex-IMF chief economist, Kenneth Rogoff, addresses this in today's Financial Times. More than anything else US policy now needs to avoid a run on the dollar, which would result in another enormously disruptive market dislocation.

I read Friedman and Schwartz on the "Great Contraction, 1929-1933" this morning. It makes you think. No answers, but it reminded me that things can be bad, but bad subsequent policy reactions can make things even worse.
Profiting from fear 11:29am on 16 Sep 2008 I think a few commentators on this blog, including Ambrose, are missing the point.

We are seeing the restructuring of the investment banking and consumer finance industry after a long period of soft finance, There has been excessive optimism about low inflation and the end of boom and bust.

Capitalism has always had booms and busts. Good regulation and moderately good government (that would be optimistic), and a good deal of luck, can moderate those busts.

In the mid-1980s the broker, deal and merchant banking industry restructured over an 18 month period in the run up to Big Bang. Now we have a new Big Bang which is taking place real time, and will continue to run over the next two to three months, and will echo for several years.

John Thain at Merrill Lynch got the message. Hank Paulson and the NY Fed told it to him pretty clearly last Friday. Move first before your equity valuation is too impaired.

The mistakes have already been made. Bad bets have been taken on commercial and residential property. Risk management groups have failed to understand the correlation of different asset classes. Senior management have taken on leverage, without prudential capital structures.

What matters for the moment if you are running an insurance company, a commercial bank or an I-bank, is there here and now, and where do you go from here?

If I were running Goldmans or Morgan Stanley I would be thinking about my sustainability. Do I want a banking partner, and if so, US, European or Asian? I would move quickly.

If I were a commercial banker I would be enormously careful of short term liquidity risk with my counter parties.

If I were an insurer I would be talking to my regulator

If I were a naked short player I would be looking for profit.

Is there any point in banning shorting?

I don't really think so, even if you could. Water flows down a slope. Dumb decisions have been made, and risk miscalculated. That is why there are shorting opportunities.

There is very little that government or regulators can do now other than facilitate the dynamics of this restructuring play out.

There is clearly a need for a completely different regulatory environment, but now is not the time to introduce it piece meal. Investment banking may not be the attractive place it has been for the last twenty years.

Should we be where we are now? No.

Are a lot of people, ordinary people as well as well heeled bankers going to go through a lot of pain and financial loss. Yes.

What should we be doing now? I'm not religious, so I guess hope will have to replace prayer.

One thing I do hope (pray) for is that we don't have another Russian debt crisis to add to western woes. It is not looking too good.

When would I call the bottom of the market? The moment that Warren Buffett buys into an ailing insurance company.
Meltdown Monday 08:17am on 15 Sep 2008 Robert,

Lehmans used marks of mid to high to thirty cents in the dollar for its sub-prime and A2A exposure last week. Merrills sold CDOs at 22 cents in the dollar. The market seems to be saying these prices are realistic.

AIG and some others seem to be more hopeful (less realistic). If you value the portfolios of AIG and other walking wounded at these rates what does it do to their capital needs? I'm not surprised that AIG are alleged to have asked for a $40 bill emergency facility from the Fed.

WSJ.com has a posting which is sobering: http://online.wsj.com/article/SB122144512332634941.html
Lehman: insolvency looms 00:41am on 15 Sep 2008 What happened to the comment I posted twenty minutes ago? Is it being moderated?
Prospects for Thursday, 4 September, 2008 4:23pm on 04 Sep 2008 PALIN SPEECHWRITER

BarrieSingleton asks for the identity of Palin's speech writer. According to Tim Reid of the London Times it is Matt Scully, a Bush White House veteran. Christia Freeland, the US Editor of the Financial Times, has posted a video blog today on FT.com on the Palin speech. The FT editorial line is pro-Obama, but Freeland was impressed with the way Palin placed her punches. Yes Sarah Palin is good with a teleprompt, but the lip stick on the pit bull was a great ad lib!

I can't understand why Obama doesn't have his team under control. If I had a vote I would vote Democrat, but Obama has this election to lose. If Obama's guys go on belittling Palin and making snide comments about her family life they will play the game McCain wants them to play. I was for Bill, and then Hillary. For all their faults they understand small town America. They would have reacted very differently to Palin on the ticket.

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