 |
|
A dark,gloomy and pessimistic outlook
|
There is inflation and stagnation which is stagflation.The rate cuts do not support bubble stock market.The oil,gold and commdities are up because money is looking a safe place to invest.USD is on the floor and it will continue to depreciate.From my point of view, the real value of USD is 3 to 1 against Euro but it is not gonna fall that much.In short, the economy is dark and gloomy. The job report will be the latest sign of stagnation.
Federal Reserve Chairman Ben Bernanke on Tuesday warned mortgage delinquencies and foreclosures were likely to rise and that more house price declines could be expected, and called for active measures to stabilize housing markets.
This situation calls for a vigorous response,Bernanke said in a speech to the Independent Community Bankers of America, referring to government and private-sector initiatives to slow the rate of home loan failures.
"Measures to reduce preventable foreclosures could help not only stressed borrowers but also their communities and, indeed, the broader economy," he said.
Current housing difficulties differ from past housing market slumps because of the large number of homeowners who owe more on their home loans than their homes are worth, Bernanke said."In this environment, principal reductions that restore some equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure" than reducing interest rates on troubled home loans, he said.
The way I see it ,more rate cuts on the way and Bernanke should be crazy to pump more money to a stock market already inflated.He is trying to correct a mistake by doing a bigger one.I did not like his approach of solving one problem at a time.He is not solving,just creating more problems for world economy and trade balances.
For Europe, financial markets expect no change in European Central Bank interest rates on Thursday, but they are betting that slowing economic growth will trump inflation concerns and prompt a cut in the middle of the year.
Euro Overnight Index Average rates point to the ECB cutting rates by a quarter percentage point from the current 4.0 percent at its June meeting. Overnight Index Swaps indicate a first policy easing of the cycle at the Governing Council's July meeting, market participants said on Tuesday.
Both EONIA and OIS suggest the ECB will make three cuts of a quarter point to bring benchmark borrowing costs to 3.25 percent by the end of the year.
Several signs of mounting price pressures are likely to keep the ECB talking tough on inflation in the near term, including at its March policy meeting on Thursday.
But the toll on growth from tight credit markets, financial market volatility and spillover from U.S. economic weakness should soon prompt the ECB's first rate cut in five years.
It's quite clear we'll see no rate change on Thursday, but the most important thing is what the growth projection for the current year will be. |
| Tarih
: 04.03.2008 |
|
|
View
All |
|
|
|
|
 |
|
Untitled Document
| |
 |
| |
 |
Copyright
© 2006 Mert TOKER All Rights Reserved. |
|
|
