Tuesday, May 13, 2008
Recession predicted to be long and deep
Investment Week: Blue Planet's Murray predicting deep recession
Blue Planet’s Ken Murray is predicting a much more severe recession than after the dot.com crash and maintaining large cash balances on his financial investment trusts. He believes corporate earnings will fall sharply and the stock market to follow suit and has also moved into short-dated bonds in currencies he expects to appreciate against sterling. “In our opinion, stock markets are currently completely unhinged from reality and fail to appreciate what is going to happen,” he added.
Posted by jack c @ 04:51 PM (272 views) Add Comment
3 Comments
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1. alan said...
The Investor's Chronicle mailout said today that investors "shouldn't worry about" the housing problems. Perhaps that's why many investors are behaving in a "completely unhinged from reality" state of mind.
Does anyone else think there is a sense of denial in the stockmarket?
2. Slysmiles said...
"Does anyone else think there is a sense of denial in the stockmarket?"
Not only the stock market, but pretty much every sphere of economic life, from consumers to government. Too many have forgotten what bad times are like, and lack any imagination, or any comparison with other economies that had real problems (Asian crash, russian crash, southern cone crashes etc etc).
3. plato said...
alan @ 1 said :
"Does anyone else think there is a sense of denial in the stockmarket?"
I raised a similar question a few days ago about how the increase of junk bonds (from low credit ratings) would affect the stockmarket. Also pointng out that the markets have remained remarkably steady. To me, something is not quite right. There has been a small correction over the past few months,but the volatility seems to have dampened down -- it's like a calm before the storm. I'm expecting a major correction as debts materialise and most sectors lose turnover volume.
Honestly can't see any other outcome over the next year.