Rate Cut Roundup
Governments in Asia are pumping in big funds to fight off the credit crunch emerging out of global crisis. Governments are also cutting down cash reserve and interest rate to make more liquidity. Hong is cutting its key interest rate by 100 basis points effective Thursday. Australia made a similar move on Tuesday.
Many Asian and European governments have taken emergency measures and pumped in massive funds around the world to keep the market afloat but it has so far been able to stop the increasing dysfunction of the financial system or keep the global economy from a potential recession. Asian stocks were pummeled again Wednesday as fears grew that policymakers may be powerless to stop the worst global financial crisis since the Great Depression.
This morning, India's stock exchange plummeted, and domestic action alone was not enough to turn it around.
Precationary measure of SEBI regarding the PN RBI's rate cut did not given any positive sentiment to ride on. Exodus of foreign capital is not showing any reverse trend.
Central banks from seven countries have cut the intrest rate in an combined effort to keep the money flow in the market. It seems countries across the world cooperating each other to save the world from financial crisis.
Meanwhile, who is winning and who is losing? Again, those with long-term financial-investment products (i.e. series funds, mutual funds) could actually benefit, since these product mature over many years, even decades. Also, those into heavy metal may do well, too:
If you look at the UK bailout package today this amounts to $875 billion in a combination of share purchases and new financial facilities for banks - even more than the controversial $700 billion US economic emergency package voted through by Congress last weekend.
One thing that's becoming evident: people are buying less stuff.
Monthly reports from Wal-Mart, Costco, J.C. Penney and other big retail chains confirm that American consumers are now sticking to buying necessities - at bargain prices - and cutting back on most other discretionary products.
"Consumer debt levels are high, access to credit has evaporated and the job market is weak," said Ken Perkins, president of sales tracker Retail Metrics.
In this environment, Perkins said consumers "will try to stretch every dollar and they aren't going to do that at department stores."
However, the forecast on flat-screen TV sales has not been scaled back for the upcoming holiday season. This could be due to an abiding belief that the economic situation will improve by then, or due to consumers' expected trend of outspending their incomes with credit that they already have.
During an industry Webcast titled "Economy in crisis: How we got here, where do we go from here and what does it mean for consumer electronics and your business," the CEA said flat-panel TVs and gaming hardware should do well during the upcoming holiday season even as consumers rein in their dollars amid the current financial uncertainty.
Maybe a shiny new monitor could help take our worried minds off terms like "credit default swap." Or more possibly, the CEA suggested, many people will be waiting out the crisis at home rather than traveling or spending money on nights out.
Ongoing coverage, including microblog updates, can be found on our Markets Channel.
Okay, so what's missing here? Add to this roundup in the comments below.
['m not even gonna look at my (admittedly meager) mutual fund performance today. It's a game of miles, not inches in this case.]