Wednesday, 19th December 2018
What happens next?
Interest rates have been heading up – with promises of more hikes to come….
So, it shouldn’t come as any surprise that stocks have been travelling in the opposite direction – down….
Stock values are falling like stones wherever you look….
Here in the UK, the FTSE 100 is down 10% since the beginning of October. The FTSE 250 has lost 14% of its value over the same period….
In the US, the Dow Jones Industrial Average is down 11.2%; the S&P 500 is down 12,9%; and the Nasdaq Composite has fallen 15.6%….
The German DAX is down 12.7%. The French CAC 40 is down 13.4%. The Japanese Nikkei 225 index is down 13.4%….
- A frenzy of borrowing….
Ten-years of the lowest interest rates and the loosest monetary policy ever known in the history of mankind succeeded in creating a particular and specific hothouse environment….
One where credit was freely available – and cheap. Cheaper than it has ever been before….
Governments, institutions, businesses and consumers were being encouraged to borrow. And borrow they did….
They borrowed as much as was good for them. And more. And then more still. They borrowed all they could get their hands on.… Click here to read more