WHEN PEOPLE NEED TO RAISE CASH.

WHEN PEOPLE NEED TO RAISE CASH. This weekend’s Financial Times had an article by James Mackintosh and Steve Johnson about the events of last week, which was the worst week ever for equities (stocks). They attribute the decline to hedge funds and to individuals who need cash. If there is to be a recession, people feel the need for cash to get through it. What has happened is that “People are selling what they can, rather than what they should.” That is, some people are selling stocks at a loss to raise money because stocks are easy to sell. The full quote from the article is: “‘People are selling what they can, rather than what they should,’ said the head of one large London hedge fund. ‘That’s why equities are going down so much, because you can’t sell property, you can’t sell structured products.'”

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