St. Patrick’s Day Massacre
The Stock Markets around the world are taking a hammering due to a lack of confidence in financial institutions. ISEQ, the Irish stock exchange, was closed today for the holiday; but, the plummeting share prices in world markets have sent the traders back to their desks. At 12:00pm, about the time the Dublin parade started, the ISEQ was down 500 points, just over 6% of it’s total value.
Fear and greed are the motivating factors behind major movements on market prices and fear was instilled in investors after the Bear, Stearns & Co. (NYSE: BSC) failure in the U.S. over the past few days. Many who viewed the Northern Rock failure as an indicator are hinting that this second bank collapse is the forerunner of a domino effect. The only confidence gained from President Bush’s speech over the weekend was that those who thought he was an economic eejit have full confidence that they were right. Full of platitudes and empty of substance Bush’s speech, to the Economic Club of New York, and the prospect of bewildered leadership did nothing to drive these investment professionals back to the New York Stock Exchange to start buying again.
Confusing the issue even further was the sudden cut in the discount rate announced on Sunday. The private individuals and small investors who have had easy access to stock offerings, which has driven the average share prices unusually high in the past two decades, will be the worst hit as they are not as flexible as the shakers and movers of large portfolios. Few are immune to the current financial panic and the largest group of victims will, of course, be the average Joe and Jane Soap’s who are depending on pension funds.
While stocks, housing prices, and pensions are losing their value, food, energy, and gold prices are skyrocketing. Worldwide interest rates are out of balance and consumer spending is down. Will it take a world recession/depression for us to figure out, "Where does the real, the true wealth, exist?"
- Politics, Environment, Culture, Caoimhin, Irish Culture, Irish Politics, Honesty, misc, All posts, freedom, World, Economy | Time: 3:02 pm (UTC+8)
Well written and to the point. Do you read Robert Reich’s blog? He is our guru in these matters and seldom disappoints. Robert Reich
We had a small, very small investment in one of the funds and had sense enough about six weeks ago to cash in. We lost money, but had enough left to buy a small house where we can maybe weather the storm. in the mountains. where living is cheap. Thanks for the blog. G&L
Comment by Grillman & Luna — March 17, 2008 @ 8:27 pm
Thanks G&L for the link I will check him out, and congrats on your move!
Comment by Administrator — March 17, 2008 @ 10:04 pm
Very intresting information you have in your blog, thank you for keeping us informed.
Comment by Shine — March 17, 2008 @ 11:54 pm
One thing’s for sure, Caoimhin…
You have a wealth of knowledge to share on this blog.
I may be ignorant about stocks and shares but I’m very aware of the cost of living and you’re right, it’s soaring!
Comment by steph — March 18, 2008 @ 10:05 pm
Thanks Shine and Steph! The fact of the matter is that I find lots of interesting information and hope to share it with others. “Live and Learn”, they say!
Comment by Cao — March 19, 2008 @ 11:38 am
Nicely put. The wholesale deregulation of the capitalist machine plays into the hands of those with the capital to invest. The free movement of that capital means that it goes as quickly as it comes and creates bubbles in it’s wake. The Chicago doctorine is flawed, bring back Keynes.
Comment by Thriftcriminal — March 19, 2008 @ 11:53 am