It’s down, down, down for the markets – and how. The Dow Jones closed down by 7.33 percent; Nasdaq down 5.47 percent; and the Nikkei down 9.62 percent. Whilst the DAX is currently down by 9.25 percent, and our very own FTSE has plummeted by 7.34 percent. What’s more, three-month LIBOR rates – the rates at which banks tend to lend to each other – aren’t showing much sign of downwards momentum after the series of coordinated interest-rate cuts by central banks.
Of course, it’s early days as far as the bailout package is concerned, but these latest indicators do suggest that the banks, the brokers and the analysts have their eyes more firmly rooted on an impending recession, than on Brown’s efforts. Problem is – for our PM – the less effect the bailout seems to be having, the less political capital he’ll be able to gain out of this situation. “£400 billion of taxpayers’ money for nothing” is hardly a good message by which to restore a beleagured premiership. So – as James observed earlier – don’t bet against that smile fading soon. And don’t bet against our PM leaning on the Bank of England to cut interest rates even further.
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