As anticipated in our previous posts (unfortunately), shares continue to decline today on all the major markets, especially in Europe and Asia. There is an old investment adagio which says that “No news is bad news” (Ernest Hemingway, “For Whom The Bell Tolls). In this particular case, no good economic news means bad news for our shares investments.
On the other hand, if you understand a little bit how the modern financial system works, you will find the evolution normal. Let’s start with a short briefing on how the subprime crisis propagates accross the globe: