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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: stockfiend who wrote (89045)	10/24/2008 12:08:18 PM
From: Haim R. Branisteanu	4 Recommendations Read Replies (2) \| Respond to of 116555

I disagree with Roubini on the assertion that more easing is needed. Easing and low interest rates brought about the present calamity Lower interest rates will not help the economy at this juncture; to the contrary interest rates should be above real inflation. The world faces a credibility problem - there are plenty of assets and no cash money - therefore everything is frozen - lower interest rates will do nothing to revive the economy. Real interest rates will lure money from "mattress banks" and other valuable into the banking system which will start slowly to function again and restore confidence. People who abandoned financial markets will feel a bit more secure start to trust again banks and start to spend the interest income. Very few will dear to enter the stock market in the next few years - P/E multiple will reflect the inherent risk in investing in stocks and will return to the 8 to 12 range where they belong