Categories

A sample text widget

Etiam pulvinar consectetur dolor sed malesuada. Ut convallis euismod dolor nec pretium. Nunc ut tristique massa.

Nam sodales mi vitae dolor ullamcorper et vulputate enim accumsan. Morbi orci magna, tincidunt vitae molestie nec, molestie at mi. Nulla nulla lorem, suscipit in posuere in, interdum non magna.

World markets continue to fall

Things look bleak currently on the world economic scenario. The sudden and heated debated plan of $700 billion, meant to shore up US sentiment through the Government buying up the bad mortgage loans and letting credit again flow into the markets, seems to have not done much to help the US and world markets. The sentiment is so negative that the economy seems to have gone into a spiral that will only increase the chance that this downturn will be painful and long. As a result, bank credit is becoming much more difficult to get, customers (with reduced sentiment) are slowing down retail sales (and for the American economy, retail sales is a huge chunk of the economy).

The jitters were prompted by a dismal report on retail sales, a bleak outlook by the Federal Reserve and sober remarks by Fed Chairman Ben Bernanke. A government report showed that retail sales suffered their biggest drop in three years last month. With consumer spending making up two-thirds of GDP, the retail sales data stoked recession fears.
The Federal Reserve’s new snapshot of business conditions showed economic activity weakened across all of the Fed’s 12 regional districts. Separately, Bernanke said the government has all the “tools” it needs to fix the problems in the financial and credit markets. But he cautioned that the recovery will take time.

The economic issues have been rattling the world economy, and the responses have been a bit varied. It is hard to coordinate a response for such a grave economic issue, especially when every country wants to take a decision that is in its best interests. However, finance systems the world over are much more complex and integrated than the decision making. Funds and sentiment are currently moving much faster than individual Governments can respond, and the initiative of a few days back where the finance officials of many countries along with central bankers have been trying to get a common response to these problems. They have so far not managed to improve global sentiment, and are still searching for finding tools that would work to stop this downward spiral of the global economies.
The political scenario in the US, with a heated Presidential election ongoing, has been complicating the overall response to this situation.

Leave a Reply

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>