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Worst banking crisis in decades, says Blue Planet IM

The financial markets are entering the worst banking crisis in decades and the stockmarket is set to fall by another 20 per cent, says Blue Planet Investment Management.

Blue Planet Worldwide Financials Investment Trust manager Ken Murray warns liquidity issues are causing continuing problems in the money markets and banks are increasingly unwilling to lend to other banks they perceive to be risky.

Murray says: “We are entering one of the greatest banking crises in decades. The credit cycle has turned, bad debts are soaring, banks will go bust and stock markets will fall much further. People need to be told the truth as opposed to being spoon fed palliative words.”

He says the “conveyor belt of death” – loans drawn down with cash going out and being replaced by highly illiquid, poor quality assets- will “suck the liquidity” out of investment banks and fill their balance sheets with bad debts.

“I would not be surprised to see one or more of them become insolvent in the near future.” he says.

Murray says Blue Planet has liquidated investments, stripped its portfolio down to a small group of retail banks not exposed to these problems, eliminated gearing, hedged its remaining investments and raised cash in anticipation of much steeper falls in the market.

He says: “We have locked in some of the very large profits we have made in recent years and armed ourselves with cash so that we can re-enter the market when it has stabilised.”


Underwriting by phone

Legal & General has put over 25,000 protection applications on risk through its L&G Max underwriting service which captures information from a client over the phone on behalf of advisers and gives an underwriting decision at the end of the call.

Bank backlash

While the row over the retail distribution review rumbles on, I want to turn this week to another subject – bank charges.

Franklin Templeton launches three Sicav funds

Franklin Templeton Investments has announced the launch of three new Sicav funds within its Luxembourg-domiciled Franklin Templeton investment funds range.

Cricket - thumbnail

England vs Australia: pensions

Well, the cricket season is here, and England and Australia are stepping up to the wicket. Although we compete with each other in the sporting world, when it comes to pensions, Australia’s pension programme is held up as a model for our auto-enrolment initiative. Auto-enrolment was introduced because people weren’t saving enough into their pensions, and it is still early days but signs are positive. However, in Australia, saving into a pension is compulsory, and in fact employers are the ones who have to pay in. Employees in Australia can make additional contributions into their pensions, but they don’t have to. Should the onus be on the employer or employee to save? Well in the UK we think it’s both, but to get ‘adequate’ savings for retirement it’s the employee who has to pay more in.


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