this is precisely right. The global economy is ticking along but not fast enough to warrent an agggresive intreset rate scenario as enisaged by some of the hawk who have been resisting low rates every since they were cut to record low levels. Granted that it would be good to have some elbow room in the event that hitherto unforseen events merit more accomodation. So it will be a delicate balancing act to say the least and certainly I believe we can write off a return to long terms trends for some while. The Govt therefore needs to plug the gaps in its funding particularly if they want to provide the resources for some sweeteners ahaed of the next election more on education the health service, pensions and so forth. They will need to lift the restriction on dividends as we expect in order to get the last tranche away. My feeling is that we may get a tranche as early as September and maybe even a return to some for of divi on RBS as well to begin the reduction of the State's holding in that one. Many pundits are suggesting markets are over valued at current levels but of course there are still many bargains to be had. Remove regulatory overhang from the banks and shres will go higher.
"One of the largest bullish factors is burgeoning worldwide liquidity, thanks to expansive monetary policies by central banks. That has helped fuel a surge of foreign investing that could propel US stocks higher, regardless of what happens to the American economy, some analysts say...
Low interest rates also help stocks by making Treasury securities, certificates of deposit and other interest-paying investments less attractive. The sluggish economy, meanwhile, keeps the Federal Reserve from driving up interest rates and prevents inflation from overheating...
Also, the sluggish economy--by keeping manufacturing rates low--discourages money from flowing out of financial assets into such investments as factories and machinery."
- LA Times, March 8, 1987; a few months before the October 1987 crash.
Does anyone have any ideasoverpriced target for this if i want a stag it on wednesday? Ideas and thoughts with reasons for price targets explained would be appreciated. No daft AIM styled ramping required please. I was thinking about £3.00 as well or around 15% above IPO.
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