Friday, August 17, 2007

Slip, Sliding away…..

Shaky start to European trading

European markets had a mixed start to trading on Friday, following heavy falls on Asian stock markets. The interesting bits are near the bottom of the article "US shares were helped by rumours that Bear Stearns, which is heavily exposed to the mortgage sector, could get funding from a Chinese bank. There was talk that the Federal Reserve could cut interest rates to help support the troubled housing market."

Posted by george monsoon @ 09:49 AM (1112 views)
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9 thoughts on “Slip, Sliding away…..

  • Stoatgobbler says:

    The word here is that in fact the Chinese Government’s Investment Fund (the one that bought a chunk of Barclays) will be buying Bear Stearns when it collapses. Now that would put the cat amongst the pigeons in no small way.

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  • stillthinking says:

    The rumour that BoJapan will raise interest rates next week is surely mythical (mentioned at the bottom of the article). If the UK government can keep them low while we literally watched prices go up, then why would the BoJ act when there are no price rises at all, and even the 10 yen rise (5p) on a Brand name mayonnaise producer made the news?

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  • stillthinking says:

    Per tub you buy in the supermarket, not the share price.

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  • If anybody doubts how screwed capitalism has become, we now rely on a communist country to bail our capitalist system out.

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  • sold 2 rent 1 says:

    The Chinese need to do something with all those USD as when the Fed starts cutting it will surely fall again.

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  • So which way do we think the BOE will act ? – inflationary or deflationary ?

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  • You would think that in the short term, they would have to defend the pound, as a low pound = higher inflation (because we are a net importer) and inflation is supposed to be their core remit. However, if the world economy tanks on this current crisis, it probably won’t be long before growth slows (reverses?) and unemployment rises, and that will likely then become their bigger concern so rates will then come down again. I would suspect, however, that by then the damage will have been well and truly done (if it hasn’t been already), especially in respect of house prices – once the crash is in full flow sentiment will take some time to turn around again even if/when they drop rates, particularly if more people are out of work and lending criteria have been tightened.

    There really isn’t a good way to turn though – higher rates could lead to recession, lower rates could lead to runaway inflation, so who reckons that what they’ll actually do is a brilliant impression of a bunny in the headlights? 🙂

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  • Bunneee awww cutesy wutesy bunneee wabbit.

    We are going to have to defend the pound.

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  • It’s pretty much up to the DOW if the FTSE closes the week above 6000. I really hoping it doesn’t but the FED appear to be frantically papering over the cracks so I would not be too surprised. God only knows how the markets would have stood without the intervention of central banks.

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