Comments on: Storm Clouds on the Horizon

By: Wolfie

Wolfie — Thu, 05 Jul 2007 08:04:06 +0000

You’re not the only one. I was down the pub recently with our global head of risk, he admitted that he had expected the debt bubble to burst a few years ago too. Even for him our analysis is little more than going through the motions while politely ignoring the 500lb gorilla in the room. I suspect that the current war in the ME has a lot more to do with incentivising the retaining of US government bonds etc than geopolitics. Its all like a sweaty game of poker while we wait to see who blinks first.

By: Stef

Stef — Wed, 04 Jul 2007 14:53:01 +0000

I’ve given up trying to figure out when the unavoidable crunch is going to happen. The experience of the last few years is that the Masters of the Universe have been able to keep the plates spinning for a lot longer than many would have thought possible, or rational. The bubble will be popped sure enough but only when it suits them. However, I do agree that it does seem like it’s going to happen sooner rather than later

By: Wolfie

Wolfie — Sat, 30 Jun 2007 18:40:23 +0000

For now being the operative word James. As I think you’ve spotted, there isn’t really any upside to this news and it looks very grim. Not unexpected, in fact I’ve been predicting it for a while but that doesn’t make it any better.

Ordinary folks are unlikely to notice anything is really wrong until the end of the summer, the major institutions should be able to bury it until everyone gets back from their holidays. Markets are traditionally volatile then anyway. The bad weather throughout Europe (insurance payouts) are going to make matters a lot worse too.

By: jameshigham

jameshigham — Sat, 30 Jun 2007 18:17:38 +0000

…so as long as you are not overstretched on your borrowing you will be alright for now…

Ah but that’s precisely what people are just now.