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This is a genuine panic -- probably the start of pretty dramatic decline. Sovereign debt is going to be the new contagion. If the contagion spreads, the gains t
by chasingsparks 16y ago
This is a genuine panic -- probably the start of pretty dramatic decline. Sovereign debt is going to be the new contagion. If the contagion spreads, the gains to consumption over the past year could be demolished. These gains were bought at the price of government stimulus -- i.e. soverign debt. Businesses are not yet stable enough to weather another downturn soundly; governments are already grossly over-extended.
Oh, happy days.
- apphacker 16y ago"We should be down big today, but not 1,000 points. This is an equity market structure issue, there's no major problem going on." http://news.bbc.co.uk/2/hi/business/10101581.stm http://news.bbc.co.uk/2/hi/business/10101581.stm Doesn't sound like a panic to me.
- chasingsparks 16y agoYea, it's appearing more and more like a glitch, human, structural, or otherwise. However, the sellers were real -- and increasing. I think there is a danger that people will see it as only a glitch and not the beginnings of trouble. The glitch might mask the true sentiment.
- apphacker 16y agoWhy would you want a panic? The market is built on confidence, we want the market to have confidence...
- koanarc 16y agoBut not necessarily false confidence.
- chasingsparks 16y agoTo some degree, I agree with you. The stimulus was a bluff that was meant to inflate confidence and bring back spending. The market is a strong signal that, if in panic mode, may arrest gains to consumer confidence. I don't want a panic because it may lead to recession/depression round 2. However, I also believe that, if round 2 is inevitable. I'd rather fall from a lower height.