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Things are only going to get worse ....

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  • 04-10-2008 2:06pm
    #1
    BenjAii
    Closed Accounts Posts: 545 ✭✭✭


    Jonathan Weil at Bloomberg makes the case that the US bailout is merely postponing the day of reckoning (which will be much worse) and not actually fixing the problem.

    In so far as I can see his argument seems sound enough; the banks still don't know the value of the other banks toxic debts and still don't want to loan to each other, thus the crisis continues. There is likely to be further much bigger action needed by government, the reason the US is merely applying band aids now is that it wants the elections out of the way so it can become the problem of the next administration.

    Anyone disagree and think we have turned a corner ?


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    #2
    silverharp
    Registered Users Posts: 17,849 ✭✭✭✭silverharp


    looking at it from a market perspective technically it is very like 1973 and 1937. Serious bear markets last around 18 months , so after a capitulation low in Oct I would expect a bear market rally for a few months and then there will be another leg down Q1 next year.
    longer term as long as asset prices are falling the problems will continue

    A belief in gender identity involves a level of faith as there is nothing tangible to prove its existence which, as something divorced from the physical body, is similar to the idea of a soul. - Colette Colfer



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    #3
    is_that_so
    Registered Users Posts: 32,136 ✭✭✭✭is_that_so


    No corner turned unfortunately. There appears to be wholesale panic in the markets and prices have been tanking at the vaguest rumour and there seems to be no shortage of them either. Banking chap on BBC News suggested the market troubles move on to Asia next week. What is likely to give the right impression is a worldwide assault on it, i.e. interest rate cuts in all major markets. Even then it may do no more than halt the current slide. The increasing liquidity and bank capitalisation problems will still need to addressed.
    Rumour also has it that the ECB will cut rates by up to 1% before year's end, although some people reckon it'll move on rates sooner rather than later.


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