Moneyizor.com has a piece on the International Monetary Fund’s latest Global Financial Stability Report, in which it claims losses by financial institutions are set to rise to $1 trillion (£500 billion).

Moneyizor comments :

On the day when the UK’s biggest mortgage lender, the Halifax, reported a staggering 2.5pc drop in house prices in March alone, the IMF warns governments, central banks and regulators that they now face a test of their mettle unique in modern times.

… the Fund remarks, “The critical challenge now facing policymakers is to take immediate steps to mitigate the risks of an even more wrenching adjustment.”

The report indicates that this downturn is about more than just liquidity, as some commentators are still arguing, but is rooted in “deep-seated fragilities” among banks with too little capital. This “means that its effects are likely to be broader, deeper and more protracted.”

Bloomberg is reporting that “Carlyle Group’s publicly traded mortgage bond fund failed to pay margin calls, prompting creditors to seek immediate repayment, as the burning subprime mortgage market scorches investors in even the highest-rated debt”.

The London Stock Exchange has been criticized for missing out on some IPOs recently. Amsterdam took this one.

Looks like the LSE was wiser than its critics.

The United States’ Federal Reserve has intervened dramatically to cut base rates by a whopping 75 basis points or 0.75 percent, indicating that it regards recession as a real threat to the US economy. This is the single biggest cut by the Fed in 20 years.

Despite the out-of-synch announcement, the markets are currently less than impressed, regarding it as a panic measure. The White House has also weighed in with the President saying he is considering an even bigger fiscal stimulus than the recently announced $150billion.

London markets have lost around 13 percent of value in only three weeks, heralding a worldwide bear market.

Syntagma has an in-depth analysis of the upcoming recession. Here’s a taster :

As we’ve been saying here in Syntagma for some months, a long, deep worldwide recession now looks more likely than not. Opinions are hardening among key players, principally in America and Britain.

Yesterday, the Wall Street Journal proclaimed : “U.S. warning signs point toward deep recession”.

Now even the insurance companies, or Monolines, that underwrite possible defaults, are also in trouble, with two of the biggest in the U.S. said to be close to Chapter 11 status (a form of bankruptcy protection against creditors).

Clearly, with the Fed and the White House in fighting mode something nasty is moving in the undergrowth.

Yahoo Business News is reporting that “South American-focused precious metals firm Hochschild Mining said on Tuesday it planned to float shares on the London Stock Exchange next month.”

Executive Chairman Eduardo Hochschild said : “We have a strong project pipeline and also plan to maximize the potential of our existing operations.”

The company, which produces silver and gold, said in a statement it would seek to raise an unspecified amount of money to finance its Latin American growth strategy.

Yahoo comments : “Hochschild said it planned to increase annual production to approximately 50 million silver equivalent ounces, or 830,000 gold equivalent ounces, from existing operations and development projects by 2011. In 2005, Hochschild produced 10.5 million ounces of silver and 232,000 ounces of gold at a cost of $2.6 per ounce of silver and $170 per ounce of gold.”

This is yet another example of the worldwide trend of listing in London to avoid U.S Sarbanes Oxley regulations and European bureaucracy.

Why wouldn’t the LSE want to stay independent?