Financially Speaking October 2008

Once again the markets teach us that we know nothing in the face of human psychology….

Ace Mortgage Brokers

Dear Client,

A unique cycle – we need to look for value:

Investec Asset Management Director Jeremy Gardiner says that perception among those opposed to the bailout Bill is that Wall Street had a party; now it has a hangover, and the people being asked to clean up the mess (ie the taxpayers) feel they weren’t even invited to the party.

“But, in fact, they were at the party. The average American family has 11 credit cards. They lived in a world where house prices supposedly only went up, and therefore home equity withdrawals (refinancing your house in order to spend more) fuelled the party until borrowers are now drowning in debt. Consumers are blaming the barmen (the banks), who made lots of money selling them the drinks (debt), and they are blaming the Government for not having regulated how much they could drink.”

Until next time

Please note that all the views expressed in this publication are based on my opinion and no action or advice is implied or intended.