Financial markets around the world fall and rise depending on the rumors. Misinterpreted words, sources cited the wrong way or complete lies, make the current economic climate unbearable. As predictability is the tool of choice for investors, the effect is disastrous. Below are some samples, carefully collected in a few days, from the beginning of this week.
China to buy Italian bonds
It started Tuesday after Bloomberg published a story which said that China could buy Italian bonds. Its price increased immediately. Bloomberg quoted in the news Financial Times material. This material does not exist on the Internet, not published anywhere, and the FT denied it. It turned out that the Bloomberg reporter had seen a preview of an FT material and did not understand anything. When the FT has published the news, it was about how the Chinese would want to buy Italian industrial assets, not bonds.
Lack of dollars at BNP Paribas
An article published by the Wall Street Journal and all over the world press, quoting a source inside the French bank said “We can not borrow dollars anymore”. The bank denied it immediately and started an investigation to discover the “Launcher” of the rumor that has caused a depreciation of the bank’s shares.
Sarkozy’s statement
Wednesday capital markets have gone wild after the news came that Sarkozy and Merkel will make that day a very important statement. Obviously, none of the two politicians had any plan to such a declaration, but it was enough for the prices to fly from side to side.
Dutch Finance Minister about the collapse of Greece
Like there was not enough trouble, there are news saying that the Dutch finance minister said the Netherlands would no longer support Greece and its default is inevitable. Dutch government immediately denied everything.
Geithner about increasing European Stability Fund
According to Reuters, U.S. Treasury chief Timothy Geithner will ask today that European finance ministers increase the size of the European Financial Stability Fund. News later, on CNBC and Bloomberg say that Geithner did not intend to talk about it.
Austria to withdraw from the Stability Fund
Markets fell yesterday after rumors emerged that Austria will withdraw from the Fund, in fact an exaggerated version of the fact that Austrians have postponed the vote on the Fund. When things were clear, the markets recovered.
This analysis, conducted by Business Insider, would be more complete if we add ” assumed rumors”, the statements and comments made by analysts, financial gurus or independent investors.