Last Sunday I wrote that the week ahead would be the most decisive of the decade for the world economy. Sadly I proved to be spot on. Stocks markets melted down in a way unknown for 20 years and more like 30 years.
We have been left in a mess and it seems there is little that can be done now that the patient is in severe cardiac arrest (that patient being the credit markets).
However, for the week ahead its seems to me as though some things will happen, others in the comments please and then we can see who was right next Sunday assuming we have power for our computers....:
1- RBS. Barclays & Lloyds/BOS will announce taking of the Governments' shilling before the markets open tomorrow. Despite the huge knock to dividends, this will temporarily support their share prices. The CEO of RBS will resign.
2- The markets will continue their downward trend as more bad news seeps out into reality. Perhaps not with the vigour of this past week and with a bear rally for a day or two, but downwards nonetheless. Lehmans fall-out will be main bad news to financials sector.
3- After the failure of the Sarkozy talks today (prediction), the Euro will weaken further against the dollar and pound. Serious questions will begin to be asked about its viability.
4- Commodity sell off will continue, as will gold and silver to some extent as margin calls for big traders continue to force liquidation of assets. Maybe some respite by Friday, Oil will end the week under $70 unless OPEC cut production.
5- Questions will being to be asked of the strength of some UK Insurers as they are battered by huge markdowns to their assets; similar with large pension fund companies like BA and BT.
So all in all, looks like a great week ahead. Hope I am wrong. My hunch is sentiment will turn around the end of October