Why markets need to calm down
Is this the week that will finally see trading suspended on most of the world stock markets?
With financiers freely admitting that the current stampede out of stocks and shares, and indeed out of bonds, guilts and even gold, has reached the point of sheer lunacy, it would seem the only course of action left to Britain, the USA, Europe, and the Far East markets is to call a halt for a few days in the hope that traders will calm down.
It might work, temporarily, but calmness will only return to the market when investors can see at least a sign of growth returning.
Warren Buffet has began buying shares again, but I wonder if even he would be prepared to call the bottom of the Dow or the FTSE-100.
And on the matter of the Dow, isn't the most annoying thing on television BBC's obsession with showing the bell-ringing closing ceremony at the New York Stock Exchange?
Do the people who are ringing the bell, with their rictus grins intact, actually know what is going on?
Do they realise, as the market crashes by a further four or five per cent, that their pensions and insurance policies are crashing as well?
To misquote Kipling: "If you can keep your head when all around are losing theirs and blaming it on you, you don't understand the heck what's going on."
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Paul, my heart has sunk already; and it's only 1300 GMT this Sunday. I haven't even opened the Sunday papers' money pages yet.
Can everyone please just calm down and not pretend we are on the brink of famine? It's mass hysteria at its worst. Few of us (our generation/Western World) even know what REAL hunger, real poverty is like.
We are a monstrously spoilt lot. Luckily my grandparents, having lived through the famished aftermath of two world wars, told me how to reuse potato peel (so I'll be alright); and then I find, in one of yesterday's colour supplements, good old Delia instructing us how to keep us all in stew. If no one can see the irony I'll run for the woods now.
Think of it as the "Stock Market" diet (patented by me already - so don't waste your time using my idea). Will we see fewer fat Americans, and expanded waists spilling out on our own high streets? Let's see. Happy to take bets.
U
And yes, do grow your own veg: It's good for the soul. If nothing else.
The great Unwinding continues.
I have spotted these quotes ;
...continues. I spotted these quotes:
Derivatives (remember credit derivatives alone total an estimated $54 trillion) - hedge funds:
'Investors pulled at least $43bn (£25bn) from US hedge funds in September..... nearly five per cent of the global sector's estimated $2 trillion in total assets......Last week, Manny Roman, the co-chief executive of GLG, Europe’s biggest hedge fund, warned that thousands of hedge funds are on the brink of failure. He predicted that between 25 and 30pc of the world’s 8,000 hedge funds would disappear "in a Darwinian process"'
Currencies:
"This is the biggest currency crisis the world has ever seen," said Neil Mellor, a strategist at Bank of New York Mellon.....
Experts fear the mayhem may soon trigger a chain reaction within the eurozone itself. The risk is a surge in capital flight from Austria – the country, as it happens, that set off the global banking collapse of May 1931 when Credit-Anstalt went down – and from a string of Club Med countries that rely on foreign funding to cover huge current account deficits.....
The latest data from the Bank for International Settlements shows that Western European banks hold almost all the exposure to the emerging market bubble, now busting with spectacular effect.
Light dawning:
Charlie Bean, the deputy governor of the Bank of England, said that Britain was only "in the early days" of the fallout from unprecedented global financial convulsions. "This is a once-in-a-lifetime crisis, and possibly the largest crisis of its kind in human history."
I agree. But this will only really develop as a political crisis when unemployment in western countries reaches upwards of 15 per cent, tax revenues plummet and it becomes clear that Governments are bankrupt. Wait for the first banks to run out of money in their cash machiens, or fail to pay wage cheques into accounts. That's when the riots will start.
Ursula, I agree that this crisis cannot be comapred to the 1930s Great Depression in terms of poverty.....at least, not yet. As far as western economies are concerned, however, we are right back to 1931. My advice is to get the nearest allotment and start digging.