Trends from fake hopes
Written by A Forex View From Afar on Wednesday, March 12, 2008Back to www.thelfb.com
FT's John Authers writes down a list of previous rallies that only gave fake hopes to investors. He smoothly calls them "dei ex machina" meaning "an artificial, or improbable, character, device, or event introduced suddenly in a work of fiction or drama to resolve a situation or untangle a plot (such as an angel suddenly appearing to solve problems)"-Wikipedia Courtesy. This description should give a good image over the market.
Here are some other dei ex machina, that were once supposed to winch the market out of its funk: the Fed, when it cut the discount rate last August, again when it launched the term auction facility in December, and again with its emergency rate cut in January; the US Treasury and its “super-SIV” plan; the Abu Dhabi Investment Authority and its purchase of a stake in Citigroup; and Warren Buffett with his offer to buy the healthy part of the monoline bond insurers. None of these rallies lasted long.
We wrote about all of them, and it seems the solution won't be a lone acting Fed or Investor, but a plan well-put together by the Central Banks, Financial Institutions and Investors solving the long term problems.
Source:
FT: The Short View: Drama in credit markets
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