The FTSE 100 has suffered another wobble, mirroring falls on Wall Street and in Asia.
Markets have been jittery for much of the year amid a crisis in U.S. subprime mortgage lending and fears of a global credit crunch.
Are we in line for a market collapse and recession, or are the fundamentals still strong and we are witnessing just weak sentiment?
Have you sold shares and invested in alternative investment vehicles? Or do you believe the markets will recover?
Send us your comments.
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8 comments so far
The subprime mortgage problem is the cause of the credit crunch - they are not different issues. The ebb and flow of capital is what makes the system work, and when a part of the mechanism gets clogged up, problems ensue. When the full extent of the problem is known, and all those unfortunate people who have lost their homes stop “consuming”, then the “irrational exuberance” will be clear to see. Sentiment makes the market, and if enough consumers stop doing what they are supposed to do, then forward looking projections will be irrelevant. The dangers are clear to see - if you’re looking.
- Posted by Stephen DeenMy opinion (for what it’s worth) is that we are headed for recession.
For years, pundits have been saying that there is a global real estate bubble that will burst when interest rates rise.
The markets are ruled by sheep who flock from fad to fad.
Oil and commodities will pull us out of the recession once the housing market has cooled.
Then when oil runs out we’ll be in a depression.
- Posted by JuneThis Credit Crunch is necessary, companies who are too much in debt or have leveraged up to their ears need to be squeezed out. In the long term fundamentals remain strong in the global economy
- Posted by Jonathan RoydsHistory tells investors to buy on weakness - why should this be different ?
- Posted by Dean FairbrotherCredit crunch is another blow to the moral of investors, which was based on easy money for companies and the common man with cheap loans.It was long over due, but will be short lived.
- Posted by Sukhdev Purewalin my oppinion what i can fore see in next three to four months is european and british stocks going slightly up while u.s. stocks stagnating or going down,because of sub prime effect,and u.s trade deficit,world central banks changing reserves into other currencies and IMF beating the drums USD is over valud by15 to 20%.
- Posted by jayI agree with Jonathan, the long term fundamentals are good.
I believe that the markets will recover their poise once the full extent of the credit prolem is a)known or b)begins to subside due to cuts in the federal funds rate.
- Posted by Gary ChevalierThe US consumer is feeling the pain, he represents a quarter of global consumption. The UK consumer is even more indebted than the US. I don’t see how the world can escape a recession when the western economies are in so much trouble. And the “fundametals” are skewed by cheaply leveraged coporate profits, that era is over.
- Posted by Park