Tuesday, September 18, 2007

today's phrase : "investor panic"


What is the difference between your credit card company ringing you up and insisting that you give them back some of their money and walking into a bank and asking them to give you back some of your money? What is the difference between people divesting their savings from a bank and city traders divesting their investments in the same bank? Well, according to the talking heads I've seen spread like salmon paste all over the media in recent days there is a difference. Ordinary people who are worried about their hard earned cash are panicking, whereas city investors who are selling their shares are making strategic investment decisions. Credit card companies who get money back from their creditors are simply looking after their interests, whereas pensioners taking their savings and putting them somewhere else are over-reacting.

Since Thatcher's share owning democracy idea took hold (which was a very clever monetarist strategy, combining as it did the two holy tenets of Monetarism, the privatisation of public assets and the control of the money supply by incentivising investment), ordinary people have become a little more savvy about money. The media is packed with financial news correspondents and we can watch Bloomberg or whoever all day. Why is it such a shock when ordinary people start behaving like corporate money men?

No comments:

Post a Comment