We Are in a Semi-Depression: Nightingale
CNBC
Friday, August 14, 2009
The surprise rise in German and French gross domestic product does not mean the world recession is over, and central banks are likely to make mistakes that would bring about a second recession, Roger Nightingale, strategist at Pointon York, told CNBC Friday.
"It's been very rare for them not to make policy mistakes in the past," Nightingale said. "You are in a semi-depressionary situation all around the world. I would think that in fact a central banker raising rates now would make a policy mistake."
Australia's central banker sent the Australian dollar [$$AUDUSD 0.8413 -0.0017 (-0.2%) ] to an 11-month high Friday after saying the country's interest rates will be noticeably higher than the current 3 percent rate, while analysts have said the European Central Bank may start thinking of tightening after the good GDP numbers from Germany and France.
As for the risk of a second leg in the recession, the run down in inventories has stopped, but the problem is that retail sales have not picked up and investors need to be cautious in the second half of the year, according to Nightingale.
CNBC
Friday, August 14, 2009
The surprise rise in German and French gross domestic product does not mean the world recession is over, and central banks are likely to make mistakes that would bring about a second recession, Roger Nightingale, strategist at Pointon York, told CNBC Friday.
"It's been very rare for them not to make policy mistakes in the past," Nightingale said. "You are in a semi-depressionary situation all around the world. I would think that in fact a central banker raising rates now would make a policy mistake."
Australia's central banker sent the Australian dollar [$$AUDUSD 0.8413 -0.0017 (-0.2%) ] to an 11-month high Friday after saying the country's interest rates will be noticeably higher than the current 3 percent rate, while analysts have said the European Central Bank may start thinking of tightening after the good GDP numbers from Germany and France.
As for the risk of a second leg in the recession, the run down in inventories has stopped, but the problem is that retail sales have not picked up and investors need to be cautious in the second half of the year, according to Nightingale.
