Local experts weigh in on economic crisis

October 10, 2008 8:09:41 PM PDT
The word calm has not been used in the financial markets in about a month. People want to know when the markets will hit rock bottom.

"I think we may be very very near the bottom of this financial crisis," Aetos Capital Chief Investment Officer Anne Casscells said.

Closer because of these signs:

  • There is extreme fear and pessimism among investors, and the market is flushing out the most nervous of those investors.

  • Banks are beginning to get money from the Fed

  • The housing market is beginning to stabilize

  • There are signs the credit market will start to recover in the upcoming weeks

    "It's banks lending to each other, and as we get that moving, things will get better," Casscells said.

    A group of economists and financial experts met at Stanford University to explain the current financial crisis to a crowded audience.

    They agreed restoring confidence in the markets is essential to turning things around.

    Some of them would not be surprised if G7 leaders meeting in Washington pushed to close the financial markets on Monday and Tuesday to regroup or have a time-out.

    "I think they may decide they need an extra day to come to a consensus and to do that, to ensure they are not constantly chasing their tail," Mark Wolfson of the Stanford Graduate School of Business said.

    The stock market has dropped more than 30 percent in the past month. Most of the economists at the forum economists say moving 401K money around or pulling out of the market is not the right thing to do.

    "It's too late, it's locking the door after you've been robbed," John Shoven of the Stanford Institute for Economic Policy Research said.


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