Falling Prices Grip Major Stock Markets Around the World

Source: New York Times

FRANKFURT — As the United States markets edge toward bear territory, losing nearly 20 percent of their value from last fall’s peak, investors might wonder where they can turn for relief.

The gloomy answer: nowhere.

Many of the major markets in Europe and around the world have already entered a bear market. Germany and France are among the markets suffering the most, and once high-flying emerging markets in countries like China and India have collapsed even more drastically.

Higher inflation, exploding energy costs, troubled credit markets and worries about an inflationary psychology, it turns out, are global concerns. And fixing these problems — and bringing optimism back to stock markets worldwide — is proving to be difficult for central bankers, who are trying to contain inflation without risking even slower growth.

“The recent downturn in equities is essentially about investors worrying that central banks are going to be tougher than anyone had expected,” said Erik F. Nielsen, chief Europe economist at Goldman Sachs.

Read more: http://www.nytimes.com/2008/06/30/business/30markets.html?_r=1&adxnnl=1&oref=slogin&partner=rssnyt&emc=rss&adxnnlx=1214795832-WwMJzg6P/k5C7p29QvjAyw

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I promise I'm done posting gloomy economic news for the night.

Which is worse than a stock market bubble, because the average guy has more invested in their house than in the stock market.

Except that cash flow then becomes a problem as well.... Ya gotta have cash in order to live.

Anyone who was using their house as an ATM is screwed.

Hell people are under the water on their car loans too, if they have a gas guzzler. Assets are falling in value. Scary.

are paid for in full. Now all we have to do is to deal with maintenance.

that's what the forward I got today from a husband and wife conservative couple says! It says since Al Gore and the Democrats have foced ANWR drilling to never come to pass, that we're stuck with nearly $5 a gallon gas!!!

Damn Democrats!

:sarcasm:


Obviously, certain people will NEVER realize what you ask - b/c they're so DAMN brainwashed, and don't wanna believe they possibly could have had one pulled over on them! Which they have - they're just fu**ing clueless on issues!



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near Florida. Their demands for oil are skyrocketing now that their society is "modernizing".

It's been so long that we've had real inflation that even the New York Times does not get it. What we have here is cost-push inflation, and it's not the result of any damn "psychology," but $4/gal gas and $5/gal diesel, which are in turn high priced due to speculation and the political instability caused by a war of choice.

Borrow while you can at fixed rates because the currency you repay your loans with will be worth much less than it is today.

there's no telling how much longer you'll have a job bringing in the income to pay off that debt. There's no guarantee your wages will go up either.

Remember that middle- and working-class incomes (adjusted for inflation) have stagnated and are now actually going down. That's for those who have jobs. We also have rising unemployment, and that's another number that hasn't been reported accurately/honestly for a long, long time.

Tansy Gold, doing her very best not to borrow a penny

The recent news has been bashing the word "speculation" and how it somehow is causing the increases in fuel prices. Speculation is a reality but not the cause of high prices. For those that want to end speculation for oil must also in good conscience end it for wheat, corn, pork bellies , orange juice etc. In fact isn't this what most of us do when we invest in our IRA ,401 homes etc? We all expect the value to go up. In the case of oil it's just about a slam dunk. The odds of oil going up based on the current reality is almost like betting the NY Yankees could be your local little league team. Don't forget that Bush and friends are oil heavy hitters that are leaving this year. Any action against Iran will shoot the price of oil beyond our wildest dreams giving those on the inside a huge windfall in their private portfolio.

Technically speaking, what's going on isn't speculation. It's a rigged game, wherein inside players who know how the market is going to move is using that information to bad ends (well, good ends for them, but bad ends for everyone else). It's Enron in the California energy markets all over again.

This type of "economic activity" can indeed cause higher prices and become a self-fulfilling prophesy, as with the Asian currency crisis, when financial elites all made bets that Asian currencies would go down and capitalized on the actions of the central banks of a number of nations, particularly Thailand, when they reacted predictably to the markets.

Maybe we need a different word for this. It's not gambling when you own the casino. The difference is that, even at a casino, the house can sometimes lose.

But if you buy foreign stocks, they´ll tend to be a better investment (even if they lose value in nominal terms) if the value of our currency continues to fall.