Wednesday, August 3, 2011

Credit Crunch 2.0

European Leaders Feel the Strain

Southern European inter bank financing is drying up. Just like in 2007, nobody knows who to trust again. Another logical progression towards sovereign default and In its wake further asset ( ie house) price deflation. Though currency deflation via QE could hold HPC back.

Posted by voiceofreason @ 09:08 PM (3744 views)
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4 thoughts on “Credit Crunch 2.0

  • BOE to announce further QE tomorrow?

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  • General Congreve says:

    It’s certainly getting a bit panicky judging from the movement of the various markets and the news that keeps coming in. Interest week ahead by the looks of things.

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  • “Once you start, you can’t stop.”

    ~ Le Crunch.

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  • Was the 2007-2009 recession the real thing – or just a taster for what’s to come? I suspect the latter. However, interest rates don’t look likely to rise, despite inflation running at five per cent-plus, so the housing market will remain in the doldrums, drifting slightly down year after year, after year, until this deleveraging process is complete – by year 2030, perhaps? No time to consider BTL, as rents will remain stagnant at today’s prices or lower and the capital invested will slowly depreciate – a slow, painful death.
    So, outside of gold in troubled waters, there must be better investment opportunities. Despite the recent stock market falls, it would appear the global nature of business these days does protect most FTSE-listed companies from UK-specific problems and, if balance sheets are to be believed, profitability isn’t an issue for most of them who’ve been deleveraging like crazy and some are sitting on piles of cash.

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