November 16, 2007

Bank of England head Mervyn King warns of worldwide stock market crash


Well, there's something you don't see every day.

But then again, you don't see the biggest debt, credit and real estate bubbles in recorded human history go bust every day either.

You live in interesting times HP'ers. Just how interesting is still to be seen.

Markets poised for severe fall, says King

The Bank of England Governor has issued an extremely unusual warning on world stock markets, indicating that shares may be heading for a major fall.

Mervyn King said the full impact of the credit crunch had not yet been felt on equity markets in the West and in developing countries, saying that the possibility of share price falls were one of the biggest risks facing the world economy.

"It is very striking that despite the developments we've seen in the last three months , despite the stresses and strains in the banking sector , equity prices are higher now than they were in August," he said, unveiling the Bank's Inflation Report, which said the strength of share prices had been "surprising".

He added: "This is true around the world, and in emerging markets they're 20pc higher. There must be some downside risks there.

24 comments:

Anonymous said...

Did you read his speech or just do a "drive by" report on it? King warned of downside risk from rising interest rates and liquidity issues. Not once did he mention or imply a "world wide market crash."

amazed and dazed said...

11-16-2007, 3:30 PM EST

Right on schedule, the PPT kicks in to give the market an up tick at the end of the session. Heaven forbid we end the week on a down note, especially with so much good financial news in the wind.

Anonymous said...

My guess is that the markets have priced in the coming tsunami of inflation headed for western nations. We have been living above our means for decades. This includes most of Europe.

Anonymous said...

1929 all over again

Anonymous said...

I'm going to watch the movie "Wall Street" tonight.

I saw it in the theater when it first came out. But forgot what is was about.

The crazyness is finally catching up to the markets. It makes me wonder why and how stocks can go up when earnings are negative at best.

bob said...

about time someone said it. I can't understand what the fools buying on the stock markets are thinking.

Edgar said...

He is lying, the market, like houses, always goes up.

Anonymous said...

He's just trying to get me to sell so he can buy my shares.

I'm not falling for it!

Shakster said...

Bank--of---England---HEAD---Mervyn------Warns
From SHAKIPEDIA we learn
Bank-(syn)corruption,fraud,
England-The country that the US never won independance from.
Head-Chief Liar,Mouth,JaGGOFF,Baffoon,or Dildoe
Mervyn-WTF kinda name is That?
Warns-Depends on context ,and relativity.If any warning comes from a Headjob in Jolly Ol England then be prepared for chaos,and/or BullSh!t.

Anonymous said...

I can sense the pressure increasing this month. Two tid bits..

Relatives in CA were getting some work done on their home. The contractor said he was lucky for the work this month. Many of his contractor friends have been out of work for a month now. I translate this as: the card is going to run out in two more months. He'd never seen anything like it.

I was walking to my mailbox. Neighbor comes out and we have a talk. Totally panicked about his etrade account. Had significant savings above 100K in etrade bank. Total panic. Just could not get it out fast enough.

Tending to be more for sale signs that are not going away.

Little hints here and there.

Anonymous said...

OK, here is a little wallstreet...

http://www.youtube.com/watch?v=bSj5tNeKRr8

Anonymous said...

Will someone explain to me how the market has sustained at the current level given the mortgage crisis and everything else? Mervyn King's comment is EXACTLY what I have been thinking. I agree with him so much that my husband and I actually took our profits on our stocks and other investments and dumped about 90 PERCENT of our total assets into cash. We have NEVER done this before--We have always been very aggressive investors. Believe me, for us to have done something this drastic, you know we must have very bad feelings about the market.

gwk said...

the times they are a changin

Anonymous said...

SIGNIFICANT MAYAN CALENDAR DATE:

THE FIFTH NIGHT: LAST FOR 360 DAYS STARTING - FEBRUARY 19th, 2007
YES MONDAY. WE ARE IN FOR A WILD RIDE WITH CRAZY SH*T HAPPENING FOR THE NEXT YEAR! Google it.

The Mayan Calender has been right on on many different events in History including the 1929 Crash.

It's not hard to see coming, but soon we will have a very large decline (crash). If the U.S. Market Crashes, the world will follow pace.

I even liquidated my 401K into a Stable Fund a couple of months ago
because I see it coming.

Anonymous said...

The stock market cheerleaders have to get the sheep to buy or the game ends .The stock market cheerleaders are masters at spinning good news or bad news .

When are people going to realize that sales people that make money off a sale cannot be trusted (stock market or real estate sales people).So,do your own homework in life . If you happen to be lucky enough to get a salesperson do right by you than great ,but know the nature of the beast .

The worst thing that can happen to a salesperson is people not buying or selling .Sometimes the only thing you can do is hold .

I don't know how overpriced the stock market is right now ,but it seems to me that with a recession looming that most companies would be making less in the future .The cheerleaders answer that with saying "but the global and emerging markets are good." Well. I don't know if that saves the day or not ,or if it means that these global markets will go into recession also .I'm not saying I know the answers .

I'm just saying that every business investment seems like a Casino these days because of the pending real estate downturn effect .

I have had assets that lost value in the short run and ended up paying off in the long run before ,and sometimes not .What would happen if the Feds took the dicount rate down to 1 % in the next year and who knows what the Feds will really do .Its all a risk and everyone has a opinion .

Princess Mononoke said...

One of the main reasons why the stock market(s) have been sustained amid the other chaos is because of the institutional investors/traders (ie; mutual funds, insurance cos., corporations, etc.) scoop up LARGE BLOCKS of stocks that have lost a significant amount of value.

Besides, most of the corporations that find themselves in peril right now are basically pimping themselves to analyst & investors to save their A$$es!

Once the true numbers are revealed / have been made transparent end of this year, the tide will change significantly. Watch!

Anonymous said...

Princess Mononoke said...

One of the main reasons why the stock market(s) have been sustained amid the other chaos is because of the institutional investors/traders (ie; mutual funds, insurance cos., corporations, etc.) scoop up LARGE BLOCKS of stocks that have lost a significant amount of value.

Besides, most of the corporations that find themselves in peril right now are basically pimping themselves to analyst & investors to save their A$$es!

Once the true numbers are revealed / have been made transparent end of this year, the tide will change significantly. Watch!

November 17, 2007 8:31 AM
<<<

i agree. the baby boomers have already lost their life savings. they just don't know it yet. no one will tell them. when they find this out, there go the plans for living in the fun in florida and drinking martinis on the beach and playing golf. the middle class is history now. the middle class will very soon be a figment of our collective imaginations. its over folks. we are not sure about this yet. most people are not sure of it. but someone already knows this. and soon everyone will.

Anonymous said...

Anonymous said...

Will someone explain to me how the market has sustained at the current level given the mortgage crisis and everything else? Mervyn King's comment is EXACTLY what I have been thinking. I agree with him so much that my husband and I actually took our profits on our stocks and other investments and dumped about 90 PERCENT of our total assets into cash. We have NEVER done this before--We have always been very aggressive investors. Believe me, for us to have done something this drastic, you know we must have very bad feelings about the market.

November 17, 2007 2:55 AM

you have done well. now then. complete your journey. exchange your federal reserve notes for 25 percent gold and 75 percent physical silver and make sure it is in your possession and then sit back and watch as the world burns.

Anonymous said...

"The stock market cheerleaders have to get the sheep to buy or the game ends ."

The game ends in bk. And zero times anything is zero. If institutions want to be bag holders then so be it....

livinginexcitingtimes said...

anonymouse said "I can sense the pressure increasing this month."

Speaking of pressure building ... a site called UrbanSurvival is predicting, via linguistics web-bot technology, a 'release event' on or around November 22. Pretty interesting site.

livinginexcitingtimes said...

anonymous said "What would happen if the Feds took the dicount rate down to 1 % in the next year "

The Feds will have to lower rates. Cramer demanded it last time, now the banks are demanding it by threatening a credit crunch.

The lower rates will help the banks cover themselves short term, but what then? Their income depends on consumers regularly sending in their entire paychecks via CC, auto and home loans.

But the consumers are already doing that, and have no more blood to give. And every foreclosure means another monthly check the banks won't get. The 'Financial Industry' is a voracious parasite that has just about killed the host that it feeds on.

I think those who get foreclosed are the lucky ones. They are getting a huge monkey off their backs, whether they realize it or not.

Those who are able to keep eking out the payments will do so, continuing to feed a depreciating asset. They're actually working to support the banks instead of their families.

Anonymous said...

yet, the Dow goes up (mostly)!

I wonder how that works.... The PPT must be in full swing.

Where oh where did that M3 go!?

Anonymous said...

I thought the housing bubble was the Fed's and Bush's fault? How come Europe has a bigger housing bubble?

Princess Mononoke said...

Anonymous said...
>>I thought the housing bubble was the Fed's and Bush's fault? How come Europe has a bigger housing bubble?
November 18, 2007 4:36 AM

Yes, you are absolutely right! The responsibility lies with our Leader, the Federal Reserve, banks, lenders, and the NAR.

Who do you think allowed the progression of events to occur? Who knowingly turned a blind eye to corruption, greed and fraudulent accounting practices?

The same is true for Europe and other countries. That is why we KEEP referring to the current state of affairs as a GLOBAL crisis.