October 9th, 2008
09:54 AM GMT
LONDON, England - Why do I think there is genuine light at the end of the tunnel? Because we have at last seen real, genuine policy responses.
Until now governments had done little more than "jawbone" the markets or spend money with increased liquidity. More of the same, you might say. But the U.S. bail-out plan, the UK government's bank buy-up, the concerted cut in interest rates are all new, substantial measures. They are necessary and maybe sufficient to damp down the fires.
I believe more interest rate cuts will be needed to increase consumer confidence ... and I am NOT saying it will be business as usual. More banks will fail or merge; the wider economy will now start to rock like a ship on stormy seas.
We have entered a new phase now when ordinary people will no longer be spectators, but feel the effects through job losses, lower economic activity and reduced living standards. It was inevitable. Don't buy anything from anyone who tells you otherwise.
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