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Saint_Evens

Listed below are comments made by Saint_Evens between Tuesday, 30th September 2008 and Friday, 10th October 2008.

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A global solution needed 5:17pm on 10 Oct 2008 People do write some awful junk on this matter. Everybody seems to be in blind panic at the moment blaming everybody and everything. Yes, the end of the world is nigh and everybody is totally corrupt and the only option is to listen to the righteous who have never so much as borrowed a tenner from their mum.

This week was always predictable, I predicted it and many others did. When the market tanked on Monday I heard many commentators suggesting it may be the bottom. I predicted a further 10% fall.

The leaders and commentators in this situation haven't got a clue what is going on because they keep looking to their history books and text books and can't find relevant references because there aren't any so then they just guess. The world changed when markets globalised and electronic trading took over. That means that anything that happens happens everywhere and very very quickly.

Right now, this week, we are in the middle of a global cash call.

1. Financial institutions worldwide are having to shore up their finances and improve their cash position and one of the fastest ways to do that is to dispose of your liquid assets.

2. Investment funds, particularly those that have been insuring the credit markets, are facing large cash calls and are consequently disposing of their liquid assets.

3. Central banks around the world are building up their cash reserves to help protect their banks.

4. Businesses needing to find cash for everything from the wages to capital projects cannot borrow from their usual sources and so look to their next source of unds, asset disposal.

5. Even inidividuals who maybe now need to find a larger deposit for a new house to secure a mortgage may consider selling their investments to raise cash.

6. Investors, whether institutional or private, are rebalancing their portfolios to focus their investments on areas they know and are comfortable often repatriating cash to their home countries in the process.

Add to this global cash call a certain amount of hysteria and in many ways it is surprising that the markets haven't fallen further.

All of the cash that has been moved around has to find a home and any indication that markets have stabilised will see a mild mannered rush to buy shares. I predict a 12% rise in markets by the end of next week.
A global solution needed 3:29pm on 10 Oct 2008 How about we do what they did in the 30's. Close everything, banks, stock markets, etc, for 2 weeks. All the people who put us in this mess do a full audit of all banks and financial institutions and tell us all at the end what the truth is. In the meantime, everybody else have a two week holiday paid for by governments. Cheaper than the current plans and the weathers not too bad either.
How close to capitulation? 4:31pm on 06 Oct 2008 The drama really began when the politicians in the States got hold of it and European politicians are now doing the same. The only benefit is that they have accelerated the whole process. Can we look forward to a big rebound tomorrow? What I find odd is that European markets have fallen by similar percentages all day. Does this mean that it is co-ordinated selling by a few big players or does it just happen that way?
Catastrophic system failure 09:48am on 30 Sep 2008 I would like to suggest three immediate measures:

1. Slash interest rates to 2% - there is little inflationary pressure in the economy and possibly even deflation is ahead now that commodity prices seem to have peaked.

2. Raise VAT to 20% - just in case there is any inflation.

3. Give local councils a £2billion capital fund to purchase local flats and housing producing a new set of council housing that can be targeted at key workers.

There is of course a risk of a capital flight to higher interest rate economies but I think any major economy that shows itself to be aggressive in its solutions will attract capital.

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