Monday, 18 February 2008
Barclay's to end the credit crunch gloom?
With the Government stepping in to Northern Rock it has been a bit depressing really from a taxpayer perspective recently.
So to lighten the mood a little it is good to see that the market reaction today was quite positive and banks shares increased. Perhaps now we all know they will never be allowed to fail by the government shrewd investors have spotted a sure thing?
Slightly more credible are the rumours that Barclay's will announce a good set of results tomorrow and perhaps even raise the dividend. This could be the beginning of the end of the credit-crunch if true. If big banks' like Barclay's and Lloyd's can get through this past 1/2 year intact then we are not in a Japan-like situation with endless depression ahead of us due to bad credit issues at the major banks.*
There are still plenty of problems facing the economy and prospects for the year, but some good reporting news from the banks is a good sign; especially if you happen to work in one (which I don't btw).
*One lesson from Japan though is that a densely populated country stuck with high demand for property and low supply can still suffer monumental crashes if things get out of control enough - an argument often made by the uninitiated as to why the UK will escape a US style property collapse.
UPDATE: Well the news was OK from Barclay's but not enough to sustain the rally, then Credit Suisse has come out with even more unexpected write-downs - over the hump but not free and clear yet!
Posted by CityUnslicker