| Central banks cut the interest rates to rescue the markets! | |
|---|---|
| Oct 8, 2008 22:46 |   |
 | After Australia cut its interest rates by one percent, US, China and other central banks also declare to decrease the interest rates to rescue the markets. US, EU and other six central banks all cut the interest rates by 50 points. But it seems that interest cut hasn't taken effect as we expected. The stocks in New York market yesterday slumped seriously. Yesterday, China announced to cut the interest rates for the second time just in one month. The rate for oneone-year bank loans has been cut by 0.27 percentage. The reserve ratio was also cut by 0.5 percent. Meantime, a 5 per cent withholding tax levied on interest income has been suspended too. Though the financial crisis hasn't affected China very much, China has decided to take some prudent measures as precaution. I just wonder if the interest cut can help rescue the markets. What do you think? |
| Oct 9, 2008 13:10 | #1 |
| Well, at least here 12 months Euribor rate rise, I think it was ,25%, 3 month Euribor stood still. Stock markets in Europe kept falling. However, the leading economists of Finnish banks are sure that rates will come down, perhaps after New Year. By the way, I read a quite funny column from newspaper. Columnist finished his story saying: the funniest thing in this whole sad episode is that the ultimate capitalistic government of US is socializing US banks with Chinese money. Think about that....... Carlos |
| Oct 10, 2008 04:19 | #2 |
| Columnist finished his story saying: the funniest thing in this whole sad episode is that the ultimate capitalistic government of US is socializing US banks with Chinese money. I think that is is not gonna be so easy. China won't lend money to US for free. What I found it interesting is that many people begin to believe that US is gradually turning to a socialist country. You see, US has nationalized some financial institutions. Chavez, the president of Venezuela has changed to call Gorge Bush "Comrade" instead of "tyrant". |
| Oct 10, 2008 09:03 | #3 |
| I think there was ment Chinese investments to US economy already done. Some here say China practically owns half of USA. Doing some checking, it was "with communist Chinese money". Whatever, I think old Hugo have found a real way to insult George. Carlos |
| Oct 10, 2008 15:15 | #4 |
| http://www.easybourse.com/ A good article on the subject. About your question, reducing interest rates is not really efficient to stabilize markets. It makes changes swift but no one can say in which way. Countries and regions (like Europe) completely lost control over the market that is now very difficult to rule. It has become an independent realm with no ruler since there is no law to limit it uniformly all other the world. There is the point I think. It will slowly collapse until it reaches the real economy level. Then we will see, but in the meantime something needs to be done, like building an international organization with a real delegation of power. No matter who helps who, if we don't cooperate, we'll fall together (though it is not a bad thing neither). |
| Oct 11, 2008 21:20 | #5 |
| It will slowly collapse until it reaches the real economy level. Erencius, that is ideal. US and other countries that have financial crisis won't let the market and enconomy collapse. That's why US approved of 700 billion bailout though many people object the rescue plan. By the way, it has proved another thing---there is no free markets in the world. Otherwise, US wouldn't nationalize some financial corps. |
| Oct 12, 2008 06:23 | #6 |
| Well well I bet it will last in the end of 2009 when the market will have half of its current value. It's not really a bad thing as soon as real economy can keep working without the support of the financial sphere. At least if the nationalization wave continues and if people don't panic ;-). And by the way there never were any free market in the world :-p, we always need to set its boundaries, still it seems these boundaries were not set properly. It is about time now I guess (at least I hope so). |
| Oct 12, 2008 20:18 | #7 |
| Honestly, I really have no idea when the financial crisis will be over. You see, most nations have been affected by the financial crisis. "And by the way there never were any free market in the world :-p, we always need to set its boundaries, still it seems these boundaries were not set properly. It is about time now I guess (at least I hope so)." Boundaries are set by people. It is another way that people intervene in the market. Thus, I think that there is no free market forever. By the way, sometimes, the market needs intervention. US financial crisis is a good example. Erencius, do you think US financial crisis will be over without US authorities' intervention? |
Post a Reply to: Central banks cut the interest rates to rescue the markets!
Copyright © 1998-2025 All rights reserved.