12th Jan – Weekly outlook on the Stock Market, China, Currencies and more
Below you will find my weekly view on the very challenging financial markets.
Read more about all the interesting happenings in the financial markets in the 4 entries here below. I hope you find it interesting to read my private view about the consequences for the stock markets, currencies, China and what to expect from the central banks.
The 4 entries from today are:
Currency markets – different currencies different factors to watch……
Equities – Stock markets reacts natural which is healthy.
China – waiting for the Ox.
Central bank rates – Cutting as much as possible, and then what?
Hot Topic – 2009 The year of imbalances
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januar 13th, 2009 at 4:12 am
What do you think will happen if the government requires banks use the money for foreclosures? Do you think it will help the economy and the stock market?
Thanks,
Mike
januar 13th, 2009 at 10:42 pm
Dear Mike,
Very good questions.
1. I am not sure that governments can do so unless they force the banks. It would require a majority stake in the banks. The UK solution, where the UK government demands the banks to allocate lending in certain directions.
It’s not unlikely that some US banks ends in government ownership because the investors soon have lost the appetite for financial stocks – like in UK.
2. If money are allocated as you ask about, it is a de facto increased lending to private households. Short term it helps, but the outstanding amounts to write off for banks are enormous so very fast we will be back to reality. In case, same for the stock market – a small upturn and then lower.
Sorry not to sound more optimistic but the world is still correcting – lower…
Good luck
Peter