Death Spiral - The Sequel

Back in September and October last year, the markets crashed on the collapse of Lehman Brothers. Th governments of the world decided that it would not let that happen again, so now we have round after round of bailouts to keep zombie companies like AIG (AIG) and Northern Wreck going.

But this week is a new turn for the worse, markets are falling precipitously since last Friday, the FTSE (^FTSE) is down over 10% in 3 days; many are saying they see little support for prices until they hit 3000 or less. Even gold is falling again as deleveraging kicks-off with renewed vigour.

In the midst of this, Ben Bernanke is sounding off about US Fed policy, Brown is being snubbed by Obama and throwing his phones at the wall in the Whitehouse ante room.

Meanwhile, the markets fall and fall. The UK Government intervention is cack-handed and ill-though out. Look at the current Lloyd’s (LLOY.L) debacle, the company was set to announce the Government asset insurance terms on Friday, here we are 3 trading days later and the share price is down nearly 50% on no news. Terrible PR handling, terrible Government.

The markets are the telling the UK Government what it thinks of its plans, just wait until the bond markets catch-up. We need a concerted plan, waiting for the G20 in April is a bad option.

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