Global coordinated Rate cuts

Wednesday, October 08, 2008

The coordinated rate cut has happened; the markets will cheer, impelling doom gets stayed. While necessary, the central banks have only bought a couple of weeks to figure out the next set of actions. Underlying asset values have not changed appreciably due to these rate cuts.

Do not get carried away during the euphoria of the next two or three weeks; the economies around the world are contracting...the bottom is atleast 9 months to a year away if not more. Maintain a risk averse stance; sit on your hands.

In India, the first signs of liquidity problems surfaced today and were quickly squashed by the Central bank. Realty companies are leveraged...some will definitely get careful out there. A classic bear trap is emerging.

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1 Post Comments:

Anonymous said...

I am going to watch out for the cave...God help us all

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