Word: touati
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Dates: during 2000-2009
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...inspired by the world's dismal economic outlook. Because of that, many experts say, traders are coming to work scared, and looking for signs to confirm that terror. "Markets have lost points of reference, and are now acting on a combination of mega-pessimism and hyper-speculation," says Marc Touati, director general of Global Equities in Paris. "Meaning, when they get bad news justifying that outlook, there's mass movement downward disproportionate to the negative information markets are acting...
...dumped stock. One reason for the bargain hunting is that investors know inordinately depressed markets mean there are deals to be had. "Half of the companies on Paris' CAC 40 have seen their stock fall to less than their equity capital - which makes no economic or financial sense," Touati says. "markets usually move in anticipation of the way the economy is changing. That situation is now reversed: markets are simply following economic changes - or more accurately, how they think the economy has changed. Their forward vision, therefore, is virtually zero...
...that reason, economist Touati says it's virtually impossible to make any credible market forecasts until investors and traders swap panicked reaction for their usual economic analysis and anticipation. When might that happen? Possibly sometime between spring and early summer, when the first signs of modestly positive economic data is expected...
...There's lots of cash that's been tucked away around the world by people whose profit-taking will lift markets after big sell of periods, but that won't change the big picture," Touati says, "Only signs the U.S. has hit bottom and on the rise again will fuel a real rebound of international stock markets...
...Marc Touati, an economist and executive manager of Paris research and strategy group Global Equities, says that the "markets are pushing things in the search of a bottom - a point of impact from which rebound and recovery begins." "In one sense, it can be considered a catharsis," agrees Daley. "I just hope the panic doesn't cause irreparable damage to some firms and countries...