People forget, but there are times in history when the financial markets fall out of favor with investors because they lose confidence..
And they now have very good reasons to doubt just about anything that Wall Street says.
I think the low volumes indicate that the Wall Street wiseguys are pushing their luck. Once trust is lost, it is difficult to get it back.
And if justice long denied comes in a rush to Wall Street, hell may come with it. History shows us that.
Telegraph
Bank forecasts futile now all trust has gone, says analyst
By Alistair Osborne
6:23PM BST 02 Jul 2012
Sandy Chen, bank analyst at Cenkos Securities, said it was pointless revising forecasts until Barclays came clean over what had gone on.
“Analysts spend 99pc of their time crunching numbers, but underneath the complicated edifice of earnings forecasts lies a basic foundation of trust,” he said.
“In essence, the price movements in markets track the flow of conversation around one basic question – 'Do I trust them and their promised returns?’ Without the trust, nothing stands.”
Mr Chen said revelations that Barclays chief executive Bob Diamond had held talks in 2008 with the Bank of England over Libor simply clouded the issue further.
“The trust has been breached. Until the banks clear their names, we expect the markets for their shares and bonds will remain dysfunctional,” he said. “Without full management clarity, transparency and responsibility... we think forecast revisions are futile.”
