It's looking grim out there in the markets today again, with the FTSE, Dax and CAC40 all registering significant falls at the time of writing. The most common interpretations for the panic are a) market fear that that European central banks won't match the US Federal Reserve's whopping 0.75% cut and/or b) that the Fed's cut in itself is cause for chickens to lose their heads.
I'm not going to cover this in any detail, especially as it is being done much better than I ever could elsewhere on t'internet, save to say that much as I am sceptical about what stockmarket movements actually tell us today I find myself agreeing with... Jeff Randall... that what is happening currently does matter. Having been a trustee of pension fund during the period that markets went on a prolonged southwards walk I do think these falls wil probably do some damage, as it would take a serious outbreak of optimism to turn them around quickly. And optimism is currently in short supply.
I can understand the NAPF's desire to not frighten the horses by saying this is all short-term froth and that it won't matter that much in the long-run, but then look what is happening to BT because of its pension fund's exposure to equities according to this piece. The decline in BT pension fund's equity holdings is worsening the funding position, leading to the value of BT shares to drop. Apply this to other pension funds of listed companies with large equity holdings and you see the problem. Ooerr...
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