 | The Energy and Environment Round-Up: October 4th 2007 | The Oil Drum: Canada | The Finance Round-Up: October 9th 2007 |  |
17 comments on The Finance Round-Up: October 5th 2007
Comments can no longer be added to this story.
User login
Archives
- October 2008
- September 2008
- August 2008
- July 2008
- June 2008
- May 2008
- April 2008
- March 2008
- February 2008
- January 2008
- December 2007
- November 2007
- October 2007
- September 2007
- August 2007
- July 2007
- June 2007
- May 2007
- April 2007
- March 2007
- February 2007
- January 2007
- December 2006
- November 2006
- October 2006
License
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
GAIA Host Collective
and meanwhile global stock markets are melting up, including that of the u.s., despite an endless litany of bad news relating to housing and the economy. can anyone explain this phenomenon in logical terms, other than the weimar hyperinflationary analogy? i find it curious as well that price discovery in the credit markets is so episodic. perhaps the financial engineers can explain how a credit panic replete with bank runs can be so quickly transformed, at least perceptually.
fred,
Enormous amounts of credit are still floating out there, and looking for a place to invest. At least when put in stocks, it can all be pulled back fast. That keeps them high for now.
There is no panic, not yet. What we are trying to make clear that it will happen, though, and that this is inevitable.
The timing is impossible to predict, but there is so much pressure on the system already that it's hard to see it taking much longer. Still, the Fed could first cut rates all the way down to 1% again. That would tailspin the US dollar, but it'd make for a little more delay as well.
Simple advice: get out of debt, now, and don't have money in things that you can't take it out off on very short notice, like real estate. Banks may be risky, since they are deep in risky paper. Lots of that will be marked for its true value before Christmas.
When it starts moving for real, there is no telling how much will evaporate, but $500 trillion in paper with the potential to lose most of its purchasing price makes for some scary scenario's.