This crisis is about lack of confidence which has arisen from a lack of strong and credible leadership. President Bush is scarcely credible when he says he will do "whatever it takes" to stabilise the market. The problem is no-one really believes he knows or really understands what it will take. Paulson has thrown his lot in with Bush and unfortunately comes across as lacking in policies with teeth. So far only one politician has appeared credible and statesmanlike when faced with a crisis and that is our very own dour Scot, Gordon Brown. Mind you his Chancellor has been impressive too.
Up 10%, down 10% another day. These kind of daily moves are impressive if stretched over a year. We get them in a day, and every day at the moment.
When a market falls sharply, you move to cash. It was hairy there for a while when even doing that could have ended in calamity. Part nationalising the banks was the only option. At least we can sleep at night knowing our money is safe even if it is not "working" for us.
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