Current State of the World Economy: Ugh…BAD
Tue, Oct 7, 2008
Liquidity is needed in the U.S. The fed will need to lower interest rates immediately or else this thing will grow so big that they will not be able to do anything about it.
“It’s like a fire, it’s easier to extinguish five minutes after the start. Now we’re about an hour into it. We have to act quickly to assure the continuity of the financial system to avoid an irreversible contamination of the entire economy.” - Emmanuel Soupre, a fund manager at Neuflize OBC Asset Management in Paris.
Over in Europe, mirror situation is happening with their banking sectors. “Over the weekend, European governments moved to shore up some leading financial institutions there, including a $69 billion bailout for Hypo Real Estate AG, and the purchase of the Belgian and Luxembourg operations of Fortis NV by French banking giant BNP Paribas, in a deal announced by the Belgian government. And speculation grew that governments in Europe may soon announce their own bailout package.” - source
This credit crisis is spreading like fire. Did the U.S government acted too late? If this is happening with a bailout plan already passed, imagine what could have happen if there was no bailout plan at all.
“The euro zone is the second domino of the globe to be falling over after the U.S.,” -Alex Sinton, a senior currency dealer at ANZ National Bank Ltd.
“We’re seeing panic all over the markets right now, governments are taking steps to try to reduce investors’ fears but confidence is weak.” -Javier Barrio, head of equity sales for Spanish clients at Banco BPI SA in Madrid.
“Even if bank guarantees are not made explicit, it seems very unlikely that any European government would stand by and allow private depositors to lose their savings,” -Jennifer McKeown, an economist at Capital Economics.
Today I came upon a site that predicted this scenario. The article was written in June of 2007, “It’s Official: The Crash of the U.S. Economy has begun”.
Tags: economy, Economy & Business, World
October 7th, 2008 at 1:54 pm
The state of economy really is bad. I don’t follow it much, but I can’t help but read about it or hear about it these days. Hopefully it improves soon.
October 7th, 2008 at 2:49 pm
It just goes to show what a fragile world we live in and hopefully things will improve soon otherwise I shall bury my head in the sand.
October 7th, 2008 at 2:54 pm
@mark
I will bury my head in the sand with you buddy. At the rate this is going. We are going to need a lot of sand for all the people that’s going to want to bury their head.
October 7th, 2008 at 3:14 pm
Everything is going down hill and there isnt a damn thing most of us can do about it.
I hate the government sometimes. This is one of those times.
October 7th, 2008 at 3:42 pm
There’s so much to worry about with the economy. I just hope that people in the US will listen to reason and vote for Change so we can get out of this mess that our current administration got us into.
October 7th, 2008 at 6:53 pm
We have been in this mess before and pulled out. We will be ok.
October 7th, 2008 at 10:21 pm
I would like to post a rant in hopes that it will make me feel better. Here goes. I am a 35 year old single female. I have an okay job, I have a nice house, I did everything I was supposed to. I took on a mortgage I could afford, even though I was told I could be approved for a much bigger house. I didn’t get an ARM that would eventually come due that I couldn’t afford, I didn’t rack up credit card debt even though I got tons of offers in the mail. I did everything I was supposed to, I managed my finances just fine. Then 2 years ago I was in a serious accident that was not my fault and I was awarded a $100k settlement after my medical bills and lawyer fees were paid. Because I lived within my means and didn’t have any bad debt I had nothing to do with it but put it in mutual funds and CDs. Thank god for the CDs, at least half of it is safe. Now it seems I am paying the price for all the greedy CEO’s and all the moronic American’s who don’t know how to manage their finances. I have lost so much money on the mutual funds and everyone I consult with tells me the only thing I can do about it is do nothing. If I move it or take it out then my losses will be realized. So, as my reward for doing everything I was supposed to do financially I am now losing thousands of dollars that was my settlement, and also thousands in my 401k that I so diligently saved for. Thanks AIG. Thanks Freddy, Fannie and all the other companies that did what they did and all the stupid Americans who put us in this financial mess.
October 8th, 2008 at 3:27 am
It’s not looking good for any of us… and many of us have been through it all before. Sell - you lose - hang in there - you lose…
October 8th, 2008 at 10:17 am
Move over on the sand and give me room to bury my head in also.
October 8th, 2008 at 2:08 pm
It’s a little scary because my generation hasn’t ever really been through an economic crisis like the one unfolding now. I don’t see the economy making life hard for my family in the way of job loss because technically - unless he REALLY screws up my husband cannot lose his job (he’s US military) - but still. As things get more expensive - his pay sorta stays the same. But - I know there is nothing I can do about it except try and save money (like, in my house under my mattress!! LOL). Hopefully, some CHANGE will come about very, very soon. One can only hope.
October 13th, 2008 at 9:14 am
Mybe now US banks will go back to keep some capital actually locked up not leant out?
October 13th, 2008 at 6:36 pm
My husband works in the construction field. He needs companies to be able to access credit or he’s out of a job. We keep watching this all and keep our fingers crossed.