
So where did the boom of the past couple of years get to?
Did Mr Bear really eat it, or was it some other mythical creature?
The CDO perhaps, or the creature from the subprime swamp?
Inflation is a worry, no matter the type of economy. Oil prices are rising and acting like a demand eater, just as rising interest rates have been doing here.
Oil surged over $US146 a barrel, then eased, stocks swooned, interest rates rose in Europe.
The Lex column in today’s Financial Times warned:
“In the anatomy of this bear, however, the cycle of earnings downgrades has barely begun. Globally, trailing earnings are down barely 5 per cent from a lofty peak – against the average historical slump of 25 per cent – and the damage remains concentrated in the beleaguered financial sector.”
A re-rating of resources shares here, seen yesterday in the market, is a big …