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Wednesday, 24 September 2008
ING’s Cliffe Says Worst of Global Credit Crunch Impact to Come
Mark Cliffe, chief economist at ING Financial Markets, comments on the turmoil in global financial markets and the outlook for commodity prices. He made the comments in an e-mail.
ING’s Cliffe Says Worst of Global Credit Crunch Impact to Come
By Madelene Pearson
Sept. 24 (Bloomberg) -- Mark Cliffe, chief economist at ING Financial Markets, comments on the turmoil in global financial markets and the outlook for commodity prices. He made the comments in an e-mail.
On market turmoil:
“The recent chaotic market trading is the realization that the underlying dynamic of economic growth is slowing inside and outside the U.S.
“With the worst of the real economy impact of the credit crunch still to come, the U.S. authorities have been bounced by the markets into trying to come up with a systemic solution.
“Since vital details are still to be worked out and Congressional support is in doubt, the potential for further near term chaos in the markets is obvious.
“Even if a convincing plan is put together, a rocky round lies ahead.
“Lower commodity prices may bring some relief. Notably, a rebound in supply has helped drive down food prices that will be of particular help to emerging market consumers.
“However, much of the recent fall in commodity prices reflects lower demand. To that extent lower commodity prices should be seen less as a trigger for faster growth than a symptom of lower growth.”
On commodity prices:
“The fact that a one day $25 a barrel move in the oil price doesn’t make it to top story tells us that commodities are no longer in the driving seat.
“They are being dominated by the wild swings in sentiment about the traumas in the U.S. financial system and the increasingly frantic policy responses.
“The growing recognition that global economic growth is slowing is likely to reassert itself as a downward force on commodity prices. However, the confusion and shocks surrounding the systemic problems are likely to continue, which suggests that the commodity markets, like others, will continue to see highly volatile trading conditions.”
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ING’s Cliffe Says Worst of Global Credit Crunch Impact to Come
By Madelene Pearson
Sept. 24 (Bloomberg) -- Mark Cliffe, chief economist at ING Financial Markets, comments on the turmoil in global financial markets and the outlook for commodity prices. He made the comments in an e-mail.
On market turmoil:
“The recent chaotic market trading is the realization that the underlying dynamic of economic growth is slowing inside and outside the U.S.
“With the worst of the real economy impact of the credit crunch still to come, the U.S. authorities have been bounced by the markets into trying to come up with a systemic solution.
“Since vital details are still to be worked out and Congressional support is in doubt, the potential for further near term chaos in the markets is obvious.
“Even if a convincing plan is put together, a rocky round lies ahead.
“Lower commodity prices may bring some relief. Notably, a rebound in supply has helped drive down food prices that will be of particular help to emerging market consumers.
“However, much of the recent fall in commodity prices reflects lower demand. To that extent lower commodity prices should be seen less as a trigger for faster growth than a symptom of lower growth.”
On commodity prices:
“The fact that a one day $25 a barrel move in the oil price doesn’t make it to top story tells us that commodities are no longer in the driving seat.
“They are being dominated by the wild swings in sentiment about the traumas in the U.S. financial system and the increasingly frantic policy responses.
“The growing recognition that global economic growth is slowing is likely to reassert itself as a downward force on commodity prices. However, the confusion and shocks surrounding the systemic problems are likely to continue, which suggests that the commodity markets, like others, will continue to see highly volatile trading conditions.”
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