Monday, September 29, 2008


Monday 29th September 2008 may go into history as the Black Monday of this swing of the economic cycle.
The failure of the US Congress to agree the bail out proposed by Treasury secretary Hank Paulson was quite clearly unexpected by the markets an the immediate and dramatic sell-off that followed was astonishing.
Britain and the US remain in the eye of the storm, yet the UK is following a consistent policy. The breakdown of the US political consensus leaves policy makers with no clear path as to what to do next.
Sterling has its worst day's trading in nearly fifty years.

Six banks have essentially gone under today: B&B in the UK, Glitnir in Iceland, Fortis in BeNeLux, Washington Mutual and Wachovia in the US, and Hypo Real in Germany.
As I write the NASDAQ is off nearly 10% and most global markets are off nearly as much.
This is now looking like a systemic breakdown.

Now I'm scared.

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