How the US originated crisis impacted other economies?

I have written a paper summarising how the crisis which originated in US has imapcted other economies.

Let me know your comments.

WTO raises concern over falling trade finance

I had pointed WTO is concerned that trade finance would be imacted by ongoing trade crisis. WTO in a meeting stressed on the problem and provided some stas as well:

• The main one is the shortage of liquidity to finance trade credits. The market currently estimates the liquidity gap in trade finance at about $25 billion.
• The second is a general re-assessment of the risks caused by the financial crisis and by the slowing down of the world economy.
• These problems are being felt most acutely by traders and banks in the emerging market economies

Further Pascal Lamy has warned the situation is likely to worsen and impact the world trade.

CDS volumes declines marginally by 1%

BIS in its latest study points Credit Default Swaps have declined by 1% between Dec-07 and Jun-08. The detailed file in Pdf is here and excel files are here. The total derivative market is like this (in USD Billions):

	Dec-06	Jun-07	Dec-07	Jun-08	Dec-06	Jun-07	Dec-07	Jun-08
Forex	40,271	48,645	56,238	62,983	1,266	1,345	1,807	2,262
Interest rate	291,582	347,312	393,138	458,304	4,826	6,063	7,177	9,263
Equity linked	7,488	8,590	8,469	10,177	853	1,116	1,142	1,146
Commodity	7,115	7,567	8,455	13,229	667	636	1,899	2,209
CDS	28,650	42,580	57,894	57,325	470	721	2,002	3,172
Others	39,740	61,713	71,146	81,708	1,609	1,259	1,788	2,301
Total	414,845	516,407	595,341	683,725	9,691	11,140	15,813	20,353

As it can be seen, outstanding CDS have declined from USD 57.9 tn to 57.3 tn. All other derivative instruments, there is robust growth. This report has got much more analysis like Herfindahl index for measuring market concentration etc.

Let me analyse it in details and point if anything interesting.

Assorted Links

1. ACB says we should now call it a economic crisis

2. WSJ Blog points Bernanke reputation has been damaged

3. MB points to some nice explanation to recent mon pol moves.

4. Mankiw points good time to buy stocks? Hamilton has some advice as well

5. Rodrik points Calvo converts to supposing capital controls to manage sudden outflows

6. Fin Prof points to a Buffet interview. It also points to historic volatility in US stock markets

7. ALB points to a financial literacy test

8. A new blog on finance – http://marketblog.wordpress.com/ (by Washburn University students and faculty)

9. CTB points to Fitch downgrading several emerging economies. It points to another blog which gives tons of pictures and charts on the crisis