Are we on the brink of economic Armageddon? What City insiders really think

London’s financial professionals reveal all

The Bank of England has had to print another £75bn of money with quantitative easing to try to resuscitate the stagnating economy. Moody’s has downgraded 12 UK banks, including Lloyds TSB, RBS and Santander UK. And Bank of England governor Mervyn King warned yesterday that we are verging on “the worst financial crisis since the 1930s… if not ever”.

But what do the people who are actually inside the financial storm think? London’s bankers, traders, forex masterminds?

The City’s brightest brains are face-to-face with the realities of international markets. They know what’s going on, possibly better than any of us.

“Are we feeling down? I’ve been down for years!”

The financial whizzkids we spoke to would only speak to us on the proviso of anonymity. And this is what they really think is going on:

Litigator:

“Are we feeling down? I’ve been down for years! But it is extremely worrying that our banks have been downgraded. It feels like a scary precursor to downgrading our sovereign rating – it really underlines the seriousness of our situation.”

Pension fund manager:

“There are a lot of unknowns within more unknowns, nothing surprises me anymore. As for what Mervyn King said yesterday, I don’t think it’s quite like the 1930s yet but who knows how things will turn out?

“Moody’s have downgraded some of our banks but it’s not a shock. Everyone is being downgraded, it is a slow but inevitable process that is creeping across.”

“Mervyn King is an idiot”

Investment banker:

“The downgrading is an inevitability really, Moody’s has a track record of “closing the door after the horse has bolted”. Everything that Mervyn King said yesterday is, in my opinion, just him stating the facts. Anyone that doesn’t believe the severity of the situation that we are in is kidding themselves.”

Global Operations Manager:

“In the office nothing has changed, we work for an American Bank so we are not directly affected by today’s downgrade. Overall though it feels a lot gloomier in 2008. It was more of a shock then but this is nothing new. Maybe we’re desensitised.

“But Mervyn King’s comments yesterday were massively overstated. David Smith of The Times said this morning: “That’s why Mervyn doesn’t do press releases.”

Investment banker:

“The quantitative easing measures taken yesterday feel like actions that should have been taken earlier. Mervyn King is an idiot. Inflation has been too high for a long time and he has done nothing.

In Canary Wharf today people are certainly worried but it’s not as bad as it was in 2007. The press is talking as if the economy has been on the up and that this is all a shock – we haven’t started to come out of this yet.”

“It’s certainly not a happy atmosphere.”

Forex trader:

“It actually doesn’t feel too much like doom and gloom and Armageddon on the ground. It’s nothing like 2008 (Lehmans, etc), at least for the moment.

“I would describe sentiment as cautious. The markets are still pretty jumpy, with investors reacting to the headlines coming out of the Eurozone, but by no means destructive.

“Markets reacted generally positively to yesterday’s ECB easing measures, and they are hoping for further silver bullets (in policy) to stop things from blowing up.

“The UK economy is struggling. Mervyn King had to justify expanding the balance sheet, but the alarming tone of his speech was in my opinion misplaced, as there hadn’t been any shocking new data/news on the UK economy.”

Business Manager:

“The situation feels terrible but it’s not as dire as it looks. You can see that everybody is working to turn things around and so for the time being we just need to batten down the hatches.”

Sales Manager:

“It’s a very worrying situation for everyone and that is reflected in my office certainly but it’s not just because of the downgrade. The feeling has been the same for many months now. It’s certainly not a happy atmosphere.”

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