Comments on: Markets wobble http://www.johnredwoodsdiary.com/2007/10/22/markets-wobble/ Conservative Party Member of Parliament for Wokingham Sun, 20 Jul 2008 07:05:41 +0000 http://wordpress.org/?v=2.5.1 By: Derek http://www.johnredwoodsdiary.com/2007/10/22/markets-wobble/#comment-9040 Derek Mon, 22 Oct 2007 22:50:59 +0000 http://www.johnredwoodsdiary.com/2007/10/22/markets-wobble/#comment-9040 I think that any repackaging of debt, in an attempt to draw a line under the sub prime issue, needs to be done very carefully. It carries the very same inherent risk of generating even more paper with obfuscated debtor quality. Everyone wants a soft landing engineered, but it may not be possible. If central banks just turn the taps on, inflation can't continue to be treated as a side issue, NR has hoovered up far beyond the original 10bn ceiling suggested. I know you think inflation demons of the past have been vanquished but all I can see is rising costs. I think that any repackaging of debt, in an attempt to draw a line under the sub prime issue, needs to be done very carefully. It carries the very same inherent risk of generating even more paper with obfuscated debtor quality.
Everyone wants a soft landing engineered, but it may not be possible. If central banks just turn the taps on, inflation can’t continue to be treated as a side issue, NR has hoovered up far beyond the original 10bn ceiling suggested. I know you think inflation demons of the past have been vanquished but all I can see is rising costs.

]]> By: Tony Makara http://www.johnredwoodsdiary.com/2007/10/22/markets-wobble/#comment-9034 Tony Makara Mon, 22 Oct 2007 21:52:12 +0000 http://www.johnredwoodsdiary.com/2007/10/22/markets-wobble/#comment-9034 The news that commodities are struggling is a sure sign that there will be an economic downturn stateside. Interesting that experts are now talking about a hidden recession in the USA. Those who naively believe the sub-prime crisis has been dealt with are in for a rude awakening. The reality is that cash-flow has been severely interupted and the knock-on effects will continue to be felt. Reply: Yes, latest prices indicate substantial losses on sub prime, having an impact on the banking systems ability to lend more. The news that commodities are struggling is a sure sign that there will be an economic downturn stateside. Interesting that experts are now talking about a hidden recession in the USA. Those who naively believe the sub-prime crisis has been dealt with are in for a rude awakening. The reality is that cash-flow has been severely interupted and the knock-on effects will continue to be felt.

Reply: Yes, latest prices indicate substantial losses on sub prime, having an impact on the banking systems ability to lend more.

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