Realistbear Posted June 22, 2006 Share Posted June 22, 2006 http://www.thisismoney.co.uk/news/article....mp;in_page_id=2 King: Beware share slump threat Sam Fleming, Daily Mail 22 June 2006 SHARE prices will plunge causing 'significant' damage to the economy, the Bank of England warned yesterday. Prices on the London Stock Exchange could be at the beginning of a 'prolonged and pronounced' slide, the Bank said. Traders and investors are still recovering after a devastating series of declines on the Stock Exchange and across the world. The FTSE 100 index of leading shares has lost £112bn of value since its May 10 peak. The declines have prompted many investors to cash in their shares and put their savings into a bank account. ........ Market observers fear that the U.S. Federal Reserve could increase rates for the 17th time in a row at the end of the month, amid rocketing energy prices. The bank's rate currently stands at 5%. The European Central Bank has also threatened to put up rates to control inflation. Last week Bank of England Governor Mervyn King said he feared central banks have left borrowing rates too low for too long, allowing an unsustainable credit boom to develop. As a result they are being forced to push through a draconian set of rate rises, with damaging consequences for world markets. Nice one Mervyn but let's see some action as words are cheap. Quote Link to comment Share on other sites More sharing options...
Guest Bart of Darkness Posted June 22, 2006 Share Posted June 22, 2006 As a result they are being forced to push through a draconian set of rate rises, with damaging consequences for world markets. Merv must feel a bit like a lone voice in the wilderness at times. Nice one Mervyn but let's see some action as words are cheap. He's probably worried that he's going to "accidentally" fall into the BoE's printing presses if he votes for an IR rise. Never let it be said GB lacks a sense of irony. Even if he did lack all sense when selling off all our goldy! Quote Link to comment Share on other sites More sharing options...
spoon Posted June 22, 2006 Share Posted June 22, 2006 Mervyn King doing his Maradonna impersonation again. Quote Link to comment Share on other sites More sharing options...
Sledgehead Posted June 22, 2006 Share Posted June 22, 2006 (edited) Why on earth get your financial news from The Daily Mail????? Mervyn King DID NOT say "beware Share Slump Threat" AT ALL, as you have quoted in your headline and the Daily Mail implies. Here's what Mervyn King REALLY said: "30 It was not clear whether recent asset price falls would prove to be a limited correction or the beginning of a more marked and sustained change. Most market commentators had suggested it was likely to be a temporary adjustment. There was a risk, however, of a more prolonged and pronounced correction of financial asset prices that might have a significant impact on growth and inflation in the United Kingdom and its major trade partners" Monetary Policy Committee Meeting minutes, June Now that we've got that straight, let's just take a look at waht Mervyn thinks of a "prolonged and pronounced correction of financial asset prices : "There was a risk, however, of a more prolonged and pronounced correction of financial asset prices that might have a significant impact on growth and inflation in the United Kingdom" Do you know what that means? It is his reason for voting AGAINST a rise (EDIT: sorry, I'd put cut here b4, trust I didn't confuse too much) for crissakes!!!!!!!!!!!!!!!! I have told the board this before and RealistBear in particular. BoE-wise, SHARE PRICE FALLS => RATE CUTS / NO RATE RISES => LESS CHANCE OF THE HOUSING MARKET COOLING. The majority of people on here are hoping for lower house prices. Others who may have sold off their Mutual fund holdings may have a vested interest in share price falls, but that will NOT help the rest of us who think property is too expensive. Edited June 22, 2006 by Sledgehead Quote Link to comment Share on other sites More sharing options...
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