Crying Wolf

Guambat is unsure if the markets have capitulated, but Martin Wolf has. He's one of the main columnists at the Financial Times.

His capitulation:

Investors and lenders have moved from trusting anybody to trusting nobody.

It took me a while – arguably, too long – to realise the full dangers.

I have changed my mind, as the panic has grown. But unjustified panic also causes devastation. It must be halted, not next week, but right now.

So what should be done? In a word, “everything”. The affected economies account for more than half of global output. This makes the crisis much the most significant since the 1930s.

Guambat reckons the fear element is now sufficient, but not adequate alone, for a bottom of major interim-term, and possible (but don't bet on it) long-term, proportion.

But a drop-out bottom, like a blow-off top, has its own unmeasurable energy. So it could be that there's more pain to add to greater fear.

Down and down and down she goes; where she stops, nobody knows.