What to do? Pay down debt
At the start of this week it seemed that the Easter break had done stockmarket investors a world of good. The FTSE 100 jumped nearly 4% on Tuesday. Buyers piled into banking stocks, as the Financial Services Authority swore to track down those who had sparked a bear run on HBoS shares, and JP Morgan upped its bid for Bear Stearns.
But I’m not sure that this new wave of optimism will last. The experts at our recent Roundtable meeting certainly aren’t in a hurry to buy banking stocks.
Suffice to say banks’ problems aren’t going to go away soon. The central banks of the world can do what they like to interest rates, but it doesn’t change the fact that banks have lost a huge amount of money by lending to the wrong people.
Read the full editor’s letter here: What to do? Pay down debt