German politicians, media warn about the next global financial crisis

[Hannah Bell]

Within Germany’s top political circles fear is growing of a second international financial crash...
The enormous stock market bubble that has formed over the past eight months is seen as the biggest source of danger of another crash. The most important share indices-—the Dow Jones, the Japanese Nikkei and the German DAX—=have risen by around 50 to 60 percent since March. The prices of crude oil, copper and other raw materials have also more than doubled. These enormous increases are not based upon any corresponding economic growth. On the contrary, economic activity has fallen in numerous countries and many firms are still posting losses.

The rally in stock prices is due to the enormous liquidity that governments and central banks have pumped into the economy. Financial establishments are able to borrow unlimited sums of money from the central banks at virtually zero interest, and thus make high profits from their speculative deals. The trillions in taxpayers’ money that are being spent to revive the economy do not flow into investments, but into speculative deals, high payouts to shareholders, and exorbitant bonus payments for the bankers.

“The stock markets are rising because so much money has to go somewhere—because shares per se are valued attractively,” writes Wirtschaftswoche, the German business weekly, in an analysis of the current stock exchange boom. According to the magazine, the price-earnings ratio—comparing the market value per share to the annual earnings per share of the respective enterprise—has reached a historic maximum of 133. A price-earnings ratio of 14 or more is considered to mean shares are valued excessively.


http://www.wsws.org/articles/2009/nov2009/fina-n26.shtml

[Nikki Stone1]

1. We know this is coming.

Hold onto your hats.

[SoCalDem]

2. Yep.. all we did was make a payment to the bookie..

the bookie never stopped taking losing bets, and our "clients" are still gambling recklessly with OUR money..

[Nikki Stone1]

3. You hit that nail on the head

And with CA ground zero for upside down houses .....

It's only going to get worse. :(

[rhett o rick]

5. We paid the vig. nt

[MadHound]

4. But wait, I thought that the recession was over

That skies were blue and the fields were green and bountiful.

This has been predicted for awhile, and like the last time, it is we the people who will get hammered while once again, the banksters will get bailed out with our money.

[necso]

6. Market manipulation may be

a better term than speculation for much of this market (tax-payer, consumer, government) gaming.

And they'll keep it up until the next bust (manipulated bust, or as the result of a panic), probably expecting to be bailed out again.

(Ok, fine.)

The clock is ticking.