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Title: What next? View count: 297 Rating: 5.0 (2 ratings) Description: Monday 29 September 2008 - What next? Presented by Paul Donovan + Another day, another couple of bank bailouts - Fortis in Europe (requiring input from three governments) and Bradford and Bingley in the UK. Remarkably these bailouts proved necessary in spite of the bans on short selling. Perhaps short selling is not the problem? + The US seems to have finally agreed the USd700bn bailout plan - though the delays may prolong the US economic difficulties. This does not guarantee financial stability. Wachovia has put itself up for "emergency" sale. The UAE is reportedly seeing a "scramble" for short term cash. + What happens next is two years of (US and global) below trend growth, as both borrowers and lenders continue to delever their balance sheets. Deleverage is, by its nature, disinflationary. For the dollar, the position is contingent on the willingness of international investors to buy US assets. + Data today predates the full effects of the recent turmoil, of course. However, the consumer and business confidence data from Europe is expected to weaken. Spanish inflation is seen slowing. US consumer spending figures are also due. Tags: ubs, economics, bank, financial, crisis, bailout, paul, donovan, short, selling, stability, below, trend, growth, borrowers, lenders, Author: ubseconomics |
