Just in case you don't think any of this affects you or is serious, the ECB lobbed ANOTHER 60 odd billion Euros into the market today. The people who are losing money are the ones who are looking after your pension - they've stuffed wads of cash into hedge-funds and higher-rate instruments.
I find it all rather fun - a bit like 1992 when the £ left the ERM. Everyone knew it was an absolute certainty - it was a one way bet. Today, if you don't think the Fed and the Central Banks are about to ease enormously ( they've been tightening for months) you shouldn't be out there. Even though the Fed lobbed in $24billion yesterday, BofE, Canada, Japan, you name it, a few billion here, a few billion there, the Banks ain't going to hand it out to the guys who really really need it. They're going down. Or being taken over by others who each Central Bank will support to the death. Remember the BofE Lifeboat 1975? No, of course not. Most of the people running the money today were all in nappies.
The Banks are even nervous of lending to each other, even overnight. I'll just bet Mervyn and Bernanke and the rest are all calling the heads of every Bank they can think of and telling them GIVE OUT THE MONEY!
BUT, if one biggish bank or institution folds a la LTCM, the markets will disappear down a plug-hole so fast you won't be able to say gurgle.
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