Comments on: Move over darling

By: shoreditch

shoreditch — Thu, 09 Oct 2008 16:26:42 +0000

I was trying to be fairly specific in that, despite recent falls Emerging Market equity and currencies remain a sell - HFs have seen unprecedented redemptions and these markets are simply not equipped to deal with the size of liquidations that are going to hit every day from now till year end. Expect these equity markets to shut down completely and exchange controls to be implemented.

G10 and developed equity markets I think broadly the same, there will be large liquidations but you will get rallies to sell into on days of positive news. On days of bad or no news - same amount to be sold but expect equity markets doing 5% or more on these days to the downside.

It is not beyond the realms of possibility for authorities to simply shut down stock exchanges etc in the developed world although it would have been unthinkable in the past.

I’m not really that bearish but I don’t see any alternatives given that 8 years worth of global growth trades will have to be liquidated in 90 days

By: The Gambler

The Gambler — Thu, 09 Oct 2008 08:16:45 +0000

Apologies for that one Bert.

Stock markets up this morning so Brown/Darling Plan and co-ordinated interest rate cuts seem to be going down well, at least in the short-term.

By: Bert

Bert — Thu, 09 Oct 2008 07:56:45 +0000

Philip,
I’m not a supporter of GB on the whole (I don’t have any strong political views these days) but for right or wrong I think he’s a better salesman than Darling, and the Government needs to sell its solution hard and well to maximise its impact.

TG,
400% - is that wishful thinking ?

shoreditch,
thankyou for your perspective. There will be short positions to unwind as well and the government injection yesterday will help in all of this. Calls for another post.

By: shoreditch

shoreditch — Thu, 09 Oct 2008 06:23:27 +0000

I think there is still worse to come. Initial numbers from funds of funds indicate anything between 15 and 50 percent of hedge funds’ assets under management will have to be redeemed in q4.
If I was long EM equities or currencies, I’d be pretty worried. Ceteris paribus these markets will get lower and more disorderly.
It is also hard to see developed economies’ equity markets rallying meaningfully given this and 3500-3550 may well be possible in the FTSE.
Volatility is at all time highs, but since ‘once in a lifetime’ events are occuring daily, it’s actually still cheap.

By: The Gambler

The Gambler — Wed, 08 Oct 2008 13:43:46 +0000

Could be worse “Bert”. If the Betfair CEO was running the country, your tax bill might have just gone up by 400%. :-).

By: Philip H

Philip H — Wed, 08 Oct 2008 11:20:44 +0000

Under the stewardship of Chancellor Gordon Brown he took office when the books were in a very healthy state. He systematically drained away so much money that he relied on the ocean of debt building up in mortgages and other borrowings to keep the economy afloat on the sea. Not only that, this whizz-kid financial genius sold off much of our gold reserves at a ridiculously low price compared to the price today. Some genius!

Sorry Bert, Gordon Brown has been blinkered throughout, or deliberately throwing the race. Poor old Ali Darling has ALWAYS been the whipping boy of the party. He gets “promoted” into cabinet jobs that nobody in their right mind would accept. I feel quite sorry for him too, but nobody in government will solve this problem. The markets will eventually recover through market forces. (All in my inexpert opinion of course!)