Financial sector collapsing- stocks rising
It ain´t easy to understand the underlaying dynamics of the financial sector of a capitalistic system these days because they defy any of their own set rules. I am in no way a financial expert (except that I watch tons of stock market TV when I was a younger person because after school there was nothing else on back in the days). But I had a recent conversation with a friend studying that stuff and I can read articles. And no I am won´t quote any doomsday conspiracy theory leftist websites - I will quote the financial times germany... Because two headlines grabbed my attention and together with some logic I come to a conclusion that is not to argue against so easely I think.
"Finanzsystem stand kurz vor dem Kollaps" (Financial System was almost collapsing)
"Extreme Kursausschläge sind möglich" (Extreme Stockprice changes possible)
The first article cites the head of the Credit Suisse swiss bank that the the collaps of bear stearns almost brought down the whole system but then goes on to relevate that in saying that "Banks are more carefull" "They don´t give out credits easily any more". In a side sentence they mention that this will probably "bring the economy to a halt".
THe second article tells us nicely and in detail that "the worst is not over" and that big banks might make huge losses in the coming quarters.
Contradiction? Anyone? So we almost had a collapse but it was averted and things look more rosy now but the next quarter is hell?
Also why if the banks do not give out loans "so easely" is it that I got THREE adverts in the snail mail post today telling me I can get credits up to "50.000 Euro" without showing them my income - me a person that has no money and nothing to back up a 50.000 Euro loan - heck they even give you a 2.000 loan with a mail in form? Well credits is the only way a bank can reap in huge amounts of money so not giving out credits any more is saying that killing the most profitable business is not what we should do anymore and rather concentrate on business that makes us a loss.
Now pair that that capitalism is growth - without growth there is no capitalism and if there is no abundance of money floating around capitalism ceases to exist in its current form - no there are multiple people that have predicted that there can be no endless growth because there are no endless resources (human or raw materials) in the world and those prediction/calculations where that we would hit this point somewhere between 2005 and 2015 - spot on I would say.
Now with all those self contradicting articles in the financial sector saying "oh its bad but it CAN ONLY GET BETTER" and then the next quarter you have it worse you have to wonder why all major stock indexes in the world are RISING when a bank announces the biggest loss of its existence - especially when this bank is the biggest bank of the USA which is still the biggest trade market in the world?
Its like collectively trying to hide the fact that the rosy times are over and painting the building fresh on the front while the back is falling apart. Interesting times indeed.