What does this mean? Well, it means if you are looking for short-term cash at either 7, 28 or 84 day maturity – give either of these banks a ring and they will lend you …. anything. Anyone need money ?

The European Emergency summit was chaired by French President Nicolas Sarkozy with 15 other European Financial Powerhouses also attending. Sarkozy stated that “We need concrete measures, we need unity, which is what we achieved. None of our countries acting alone could end this crisis.”

It’s pretty clear that this decision slaps a wet fish in the face of the G7 summit which pretty much did nothing over the weekend than state “we need to stick together.” Thanks, President Bush – that’s a really great strategy, now please inform us how the G7 is going to actually fix the market ?

The European Decision has thrown more light on the joint effort that is required to fix this problem, and the simple truth that the world is far too interconnected now for any one country to try and fix this problem. World Financial Markets got in this together, primarily led by the USA – although not completely. Remember, European Banks were more than happy to buy up USA securities and exposure themselves to more risk in order to get bigger profits. They all had a choice to say no.

However, at least they are doing something.

Pressure again mounted on the G7 finance ministers to do more and take all necessary steps to ensure that the banking system remains stabilised and that markets do not collapse around the world. Dominique Strauss-Kahn has suggested that all methods so far implemented by the G7 have “not yet achieved the goal of stabilising world markets and bolstering confidence to the level it needs to be.”

He further stated that:

“Intensifying solvency concerns about a number of the largest US-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown. Countries would need to take further measures, including interest rate cuts and steps to bolster the banks.”

It will be interesting to see what the fall out is going to be. Tomorrow in Britain, the Governments £400 billion rescue plan will be enacted and it will reveal just how much money British Banks need to survive. It could be a real indicator of how badly British Banks have been hit by the crisis.

Royal Bank of Scotland (RBS), which has seen its market value fall to under £12 billion, is to ask the government to underwrite a £15 billion cash call. HBOS (HBOS), Britain’s biggest provider of mortgages is requesting up to £10 billion in emergency funding, while Lloyds TSB (LLOY) and Barclays (BARC) require £7 billion and £3 billion respectively each.

At 11:30am, the FTSE 100 was down more than 350 points to fall below the psychological barrier of 4,000 points – the first time in more than 5 years that the FTSE has fallen below this level. Five years !!! This takes the FTSE all the way back to levels not witnessed since 2003 when the market was only starting to recover after the turmoil that was the “Dot-Com Bust”. But I will stop there, as to even compare the dot-com crash to the market turmoil would be “dream” in its analysis.

Another huge thing to pay attention to in the markets coming into next week is the auction to settle credit default swaps protecting the debts from the Lehman Brothers fall out. How Much ? A whopping $400 billion worth of credit default swap contracts in the $55 trillion dollar settlement of contracts market.

It’s even gotten to the point where Barclays Bank is considering raising capital and pursuing other options to strengthen its balance sheet. I can hear you saying already “raise capital in this market? WTF?” – the logical answer is probably “What choice do they have?” . It’s a do or die market at the moment. You aren’t going to get credit from banks cheaply with the sharp increases in the LIBOR rate, and you need cash to survive ? If no ones lending it – offer cheap stock on the down low, and hope that existing investors will jump at the opportunity.

Ah yes, hindsight is an amazing thing. I think at this point in this article a quote would be appropriate. I refer to Denis Waitley:

You must learn from your past mistakes, but not lean on your past successes.

Ah, Denis – what a clever man you are. Unfortunately, human kind cant seem to learn from the mistakes of the past. We don’t learn them from war, and now it seems – we don’t learn them either in the financial markets. The downturn of the dot-com boom and all other financial crashes has been due to a huge number of things – but I put them down to 2 and 2 only.

Excessive and Uncontrollable Risk Taking and Poor Regulation.

Fix this, and then apply Denis’ quote – and hope that we never see the same fall out that we are seeing in this day and age.