The economic news continues to get better and better. City of London speculators are betting, via some new tradeable derivatives contracts, that the UK housing market will follow the US, with a drop of 7% in the coming year.  The FT is reporting that these contracts have seen a surge in trading volumes in the last few months. In other words, its a certain bet.

In the meantime, the so-called “credit crunch” continues apace. The European Central Bank is likely to apply more inflationary pressure today, by injecting an unprecedented amount of previously non-existant cash into European money markets. Interest rates in short-term lending markets have risen at a pace not seen since August, as investors shy away from risk and banks become increasingly wary of lending to one another, according to the Wall Street Urinal.

Former US Treasury secretary, writing in todays FT, says: “The odds now favour a US recession that slows growth significantly on a global basis.”

As I’ve said before: no shit, Sherlock?

This entry was posted on Monday, November 26th, 2007 at 10:01 am and is filed under Economy, Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.