Last night’s big fall on Wall Street is further confirmation that we have an ugly global situation ahead of us. While I have the utmost respect for Reserve Bank Governor Stevens, his soothing words can’t mask the fact that we are close to the eye of the storm, because both our companies and consumers go into this downturn highly borrowed (Capital is once again king, November 19). Adding to Wall Street, the looming Babcock and Brown asset sell off, which was announced on the same day that the Australian share market officially halved from its peak, will see every board in the country checking their balance sheet asset values and the agreements with their bankers.

If the situation looks bad, then they have no choice but to raise equity at whatever price is required. Whatever today’s price is, it will be lower tomorrow if you have problems. Capital is king.

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