Not a Sunny Outlook

The global stock markets are pricing in a sharp reduction in corporate profits, say Allister Heath and Jon Ashworth.

London bankers looking forward to their annual getaway to the ski slopes of France and Switzerland felt they were on icy ground in the City this week. Stock market graphs looked horribly like a novice on a black run heading straight for a precipice. Despite desperate twists and turns, the chasm drew steadily closer and onlookers – including even Ben Bernanke, chairman of the US Federal Reserve, despite his surprise Tuesday rate cut – were powerless to do anything much about it.

The fall-out from the American credit crunch and years of excessively cheap money finally hit home this week. What started off as a localised, American credit market crisis has spilled over into every asset class and economy. For the City of London, which triumphantly rode the financial services boom over the past few years and has benefited more than most from globalisation, the come down could be especially painful.

More articles from: this section

Print this article   |   Email to a friend   |   Permalink   |   Comment

Post this entry to:   del.icio.us | Digg | Newsvine | NowPublic | Reddit

Advertisement

Spectator Business | Apollo Magazine

Corporate | Advertising | Privacy | Terms

Spectator, 22 Old Queen Street, London, SW1H 9HP

All Articles and Content Copyright ©2008 by The Spectator | All Rights Reserved