Two reasons to be cheerful during market volatility

According to Charles Stanley's Jeremy Batstone-Carr, the outlook isn't quite so gloomy as recent market action would suggest. And there are two key reasons why.

The writer returned from his trip to the Caribbean a day or so ago to be confronted with another swathe of dramatic headlines amongst the financial pages of the nation's press. Whilst it is tempting to think that many of the risks to the financial markets analysed in earlier Week In Preview publications had come together to form the basis for a disorderly melt-down, in fact, things are considerably less gloomy (in the near-term at least) than market action might have us believe.

US Treasury Secretary Mr Hank Paulson (who already has his hands full in attempting to force the Chinese authorities to give the "green light" to an end to the currency peg) was quoted in an interview on CNBC television as saying that the US mortgage lending and general leveraged buy-out markets had been driven by speculative excesses in recent years and that the latest price action represented a reassessment of these risks and consequent financial market adjustment.

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