TEXT OF INTERVIEW
Scott Jagow: You’d think this week has to be better than last week for Wall Street. The S&P 500 lost $300 billion in value in one day. The Dow fell 500 points in 48 hours. You know the story. Today, we already have signs things might be settling down a bit. Japan’s Nikkei gained three- tenths of a percent. Let’s see how things are going so far in Europe. Stephen Beard our correspondent in London joins us. Stephen, what’s the mood over there?
Stephen Beard: Markets seem to have regained their nerve. I mean, European stocks have been firm, earlier Asian markets closed fractionally higher. So the mood seems to be calm but I wouldn’t say confident, not overconfident certainly. And no sign yet of large quantities of cash pouring back into the market. I mean the general mood is one of watching and waiting.
Jagow: Waiting, what are they waiting for?
Beard: The most immediate thing they’re waiting for is Wall Street. Id the Dow resumes its sharp downward trajectory when it opens today, there’s little doubt that global markets will follow. Last week’s big global slide was without question made in America. It was of course, you know, the subprime mortgage problems spilling over into credit market, making it more difficult for banks to continue lending to private equity funds. The big question now of course is, will it by relatively contained or will it develop into something much bigger?
Jagow: Yeah, Stephen, I’m curious what are analysts overseas in Europe saying about this as far as how bad this might get?
Beard: Well generally they’re saying on this side of the pond that this is a wobble, it’s a much-needed correction and indeed could develop into a buying opportunity. They point out that companies generally are in good shape. Many are making pretty good profits. However, some of these businesses have been loaded down with a lot of debt and if interest rates rise much further and if the banks are much less accommodating, there could be trouble for these companies and therefore there could be trouble in the wider economy.
Jagow: All right Stephen, thanks for checking in.
Beard: OK Scott.
Jagow: Our man in London, Stephen Beard.