Disaster Capitalism?

The report today (Friday) is that a very gloomy week has taken a decided turn for the worse; and I am not talking about the mist and fog covering the City of London today.

The DOW (^DJI) closed down at a new bear market low last night of under 7445. This effect of this has dragged the FTSE (^FTSE) down 2% this morning so that it sits at just under 4000.

7 weeks into the new year and we are already 12% down on the main market; by contrast Gold shoots ahead up by 25% (huge overshoot on the upside but still…).

The main reason for all of this a combination of government hyperactivity across the world coupled with total ineffectiveness of said activity. Brown, Obama all of them need to calm down and start announcing thought through policies rather than knee jerk reactions; the current medicine is not working. There are seeds of good ideas in bank recapitalisation, regulating CDS, cutting interest rates…let’s hope they get done properly.

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