Sunday, July 27, 2008
Kaletsky bear-baiting again
My view is that this episode is likely to be remembered as one of those extremes of panic in financial markets, which tend to reoccur once or twice every decade, then turn out to be simply wrong. In making this argument, I have been accused of ignoring market realities and being blindly contrarian. The true contrarians at present are the bankers and headline-writers who keep predicting economic Armageddon. The markets are taking heart from the government guarantees offered to Freddie Mac and Fannie Mae - hence the 40% rise in financial shares this week. And US house prices, which almost everyone believes to be in freefall, have actually been going up for the past four months, according to the National Association of Realtors.