Markets still getting batterred......

[R1Geezer]

Most of the world seems to have adopted Brown's approach to the financial crisis, so why are the markets not recovering? I think the plan is sound, it should be working.

[snagged]

Confidence... or rather, the lack of...

[jake-the-peg]

It's like a bubble but in reverse - I'm sure there's a term but I don't know what it is.

In the dot com boom I remember everybody madly buying even though they knew there was no value behind the stock.

As long as the price was still going up and you could get out quick enough you kept buying.

Same thing but in reverse. Everybody's selling not because they believe things are intrinsically unsound but simply because they think everybody else is.

It's pack mentality.

Tulips all over again 400 years and we haven't learnt a thing

[Gromit]

The markets are now going down because of a different problem, the fear of a world recession.

[Gromit]

"There were indeed big gains on stock markets earlier in the week as countries seemed to be prepared to work together to solve the banking problems that were at the heart of the credit crunch.
The problem is that despite the rescue, there is a widespread belief that many of the world's biggest economies are going into recession.

Retail sales figures in the US on Wednesday were almost twice as bad as had been expected."

http://news.bbc.co.uk/1/hi/business/7673668.st m

[R1Geezer]

so really, stock is under valued, so why aren't people piling into the banks' shares for example? The actual value of the bank's business assetts etc hasn't changed so the lower share prices should attract buyers, thus pushing them up. I guess fear is still stalking the financial streets.

[helpmetoo]

we are all ok then seeing as you think the plan is sound,

ever thought that your confidence in brown puts you firmly in the minority?

evidently...

[R1Geezer]

if you read my other posts helpmetoo you'll see I hate noo Labour and Brown and co. However in this instance I think he's done the right thing, that doesn't mean it'll work it's just I agree with what's been done. Numpty!

[The Sherman]

I eork in Financial services and would love to have money to pump into the markets because people will make a fortune if they view the investment as a 5-6 year investment.

If previous data is used then it will have rallied by that time and then everyone will be kicking themselves for not getting in. But as in all situations its only the rich that can actually afford to get on the market just now and the old saying applies the rich get richer.....

[karmgirl]

no know, what did you bet on?

[jake-the-peg]

People aren't piling in and buying yet because they think that everybody else is still selling and they'll lose money because of this.


The prices will stop falling only when the only holders are prepared to stick it out and hold stock no matter what the price is.

It's called market capitulation

http://www.investopedia.com/ask/answers/189.as p

The prices will stop falling only when market capitulation stops.

All this stuff of fear of a world recession is just rationalisation that journalists are spouting. Those sorts of fears don't drive this sort of behaviour this fast in a market that is already this low.

This is pack mentality pure and simple

[Oneeyedvic]

So jake, would you be happy if a bank that held all your money invested heavily in other bank shares right now?

Easy to say, more difficult to do.

[jake-the-peg]

Well I'm still holding shares and I'm not intending to sell

Does that answer your question?

[Oneeyedvic]

No - there is a difference between 'holding on', 'buying' and 'selling'.

The question was, should your money be used to buy shares in the current climate.