Ian Wyatt

The Global Margin Call

We’ve been tackling some pretty heavy issues in Daily Profit this week. And while I’m not one of the doom and gloomers who believe that stimulus policies and sovereign debt issues are about to bring about a stock market crash and economic depression, I’m adamant that we keep a firm grip on the all of the catalysts that are driving the stock market and the global economy.   

 

Stimulus policies in the U.S. were designed to help prop up asset values long enough for demand to return. If the plan succeeds, then employment will improve, lending will pick up as the housing market works off inventory, and the toxic assets that exist on the balance sheets (both banks’ and the Fed’s) can regain some value.   

 

If the plan fails, then we see another fire-sale of assets in what amounts to a huge margin call.   

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