Posts Tagged ‘European Central Bank’
The recovery of the American economic system is on the minds of all financial experts. With Europe being deep within a financial maelstrom, onlookers are very concerned if the US economy will be able to recover with better gains and in a shorter time than Europe will. The feeling is that this is very possible and highly likely. America still has a lot of strengths left. There is a lot to consider, for sure.
Middle class Americans are experiencing a very slow and low paying recovery. So while most may be able to put dinner on the table, there may not be much else left to fulfill the American Dream experience. Things are just different now and a lot of people will have to settle for a lot less in order to survive. However, Americans are still positively motivated—noting that they do feel more fortunate than the generation that raised them in a recent Gallop poll survey. This sort of morale will be able to go a long way in building towards a clearer and stronger future. This is the first and probably most important step towards recovery. The backbone of America, the average American, must feel that solutions are possible just to get up in the morning and give it a go. As unemployment is slowly going down, this may be a sign of better things ahead.
America has been dubbed the creation nation for a good reason. Some of the best inventions, technological wonders, and super gadgets, have all been created by American inventors and scientists—including computers, software, mobile phones, tablets, and social media hubs. Americans are still winning the race on new inventions that everyone wants. This will maintain the high profile visibility of American technology. Other nations simply do not have same status and demand for their inventions as Americans do.
America can supply all of the essentials to her own country. With rich soil and livestock resources, America can grow all of the nourishing foods that are needed to be supplied. Of course foreign imports are a desirable addition—however, the US can survive on what is already there.
With all that being said, experts are on the lookout for new trends in the European economic (currency) system. There has been a buzz recently about Europe finally coming up with solutions for deeper solidarity amongst her many nations. This has led to rumors of the possibility of an increasingly stronger Euro that may appear. Some are speculating that a strong possibility of the Euro becoming the most valued currency in the world one day soon. The European Central Bank’s policy maker Christian Noyer seems to think so. He recently reported this positive news to Reuters.
America can certainly gain some much-needed steam in the New Year. It is not about competing with Europe—however, all global nations need to make significant progress for their citizens and neighbors. Hopefully all of these nations will learn from the mistakes made, leaving them in the past for future generations to learn from—not to repeat.
FOX Business: http://www.foxbusiness.com
The stock market’s most recent rise is due to the lifting of cash access restrictions made on European banks—due to the serious decline of confidence in the European banks recession recovery.
According to an article distributed by the Associate Press, “‘The central banks of the world have resolved that there will not be a liquidity shortage,’ said David Kotok, chairman and chief investment officer of Cumberland Advisors. ‘And they have learned their lessons from 2008. They don’t want to take small steps and do anything incrementally, but make a big bold move that is credible.’” The stocks of huge American financial institutions such as Morgan Stanley, J.P. Morgan Chase, and Citigroup have gone up between 6 and 7 percent, on Tuesday. These are being seen as big gains in such a shifting economy.
Essentially, rates for loans have been lowered to a point that simply makes it much easier for banks to borrow all of the money that they wish. This is a great alleviation for these banks and gives them more liquidity. However, experts have also been issuing caution to these large establishments and to the world at large. They have noted that this may just be the catalyst for another bubble effect later on and that this latest move may only be a matter of passing the buck. According to them, there has to be a sturdier foundation from which to build a stronger economy than what we are experiencing now—and since 2008.
“‘People are taking comfort that it’s globally coordinated,’ said Peter Tchir, who runs the hedge fund TF Market Advisors. ‘In itself it does nothing, but the bulls are anticipating that this is just the beginning of central bank and other actions’ to ease market pressures.”
“A successful action would be expected to reduce borrowing costs for Italy and other nations, Tchir said. Italy’s borrowing costs edged lower Wednesday, but the nation was still paying more than 7 percent interest for 10-year borrowing — a dangerously high level.”
—The Associated Press
Banks may be relieved at what may be considered a holiday miracle; however, some experts have noted that this could be a set up for an even more devastating financial upset later on down the line.
Even with cautionary mentions, the upward climbs of stocks have given a clear indication that there is more confidence within the market. Perhaps the infusion of morale will foster greater results instead of a more negative financial outcome. The Dow has increased by enough points to take them out of the pointed low the Dow was in only a week ago. The Standard & Poors index increased by almost 4 percent, on Tuesday. However, in another AP article, Standard & Poors is noted as decreasing the credit value of particular US banks—Bank of America, J.P. Morgan Chase & Co., Citigroup, Morgan Stanley, and more. This may also prove to be a most confusing time for some.
Standard & Poors have been noted as lowering credit ratings due to new practices and/or procedures recently adopted by particular banks.
David Wagner, “Stocks leap on central banks’ coordinated action,” The Associated Press: http://www.ap.org
Yahoo! News: http://news.yahoo.com
How Things Are Looking Right Now
Stocks went down today, as the fear of a real financial collapse in Europe overwhelms investors, according to an article in the Associated Press today. It seems that Greece is the frontrunner of their worries right now. And any country that has is holding any bonds for Greece right now, like France, may get dragged down with poor credit ratings in the mix up. This could assure a gloomy outlook for the European banks for quite some time. This is creating yet another reason for American Economists to worry – as a collapse in Europe may cause further economic trouble for the US.
Is Anyone Doing Well?
The only rises noted today were in technology, education publications, and a Casino resort. Bank of America was noted in the report as having a small rise that is believed to be due to an announcement of restructuring to combat costs.
Up and Down
Some experts have noted that the market is changing so rapidly that the best thing to do may just be nothing at all. However, with no reconciliation in site, it seems to be quite challenging to just sit still and watch.
Reports of European Economists suggesting that Greece declare bankruptcy has had some mixed reviews among experts. Some authorities have noted that bankruptcy is the best solution for Greece right now, while others have noted it is simply not possible for them to do at all. And yet others have noted that Greece will inevitably recover and does not need to take drastic solutions, according to the AP report. With all of this being said, Greece is still looking forward to a “bailout” from a “multibillion bailout fund.” However, European officials are not “convinced” that Greece is actually meeting the mark on depleting their debt: with the current agreements they may have to do so, according to the report. In defense, Greece has noted that they will have extra revenue by raising “property taxes,” over the next 24 months, according to the report. This is probably what is adding to the confusion and is creating a global uproar as well. Serious concerns are growing in the US as it is believed that a detrimental trickle affect is bound to occur here if any European country “defaults,” or loses its credit standing. This is a lot to think about.
Juergen Stark’s pending departure is definitely one of the reasons for today’s changes in the market, according to the report. He announced his resignation last week.
There still seem to be a lot of conflicting expectations. The combination of an unsure European financial system – including the resignation of a top European banking executive – and the currently weak US economy are making things very unbalanced right now. The market is certainly on a roller coaster ride because of it all. This is a time for extremely skilled investors to make a move, or not do anything at all.
Predictions are flying through the wind, and where they will actually land is not very easy to tell. However, a sudden division in authority or leadership is never a good sign. Systems that are simply out of control will be challenging to harness, and not at all if attempted too late.
Associated Press: http://www.ap.org
The New York Times: http://www.nytimes.com
Linked With Resignation of European Executive
America has been feeling the pinch of rising oil and gas costs in recent months. Political embargos or work stoppage with oil rich countries have served as a catalyst for this trend. For the first time, in a long time, oil prices are down and we can expect to get bit of a break. The reason why may surprise you.
Juergen Stark, a top Economist at the European Central Bank, has handed in his resignation according to a report by the Associated Press: Stark will be finishing out his term early. This news has inspired the price of oil to go down as doubts about Europe’s debt crisis increases. Although Stark’s exit has been noted in the article for “personal reasons,” it is believed that there may be a connection to a growing divide among European officials. These ideas seem to have taken to the wind and traveling far enough to make people fear that this change may be an indication of Europe becoming overwhelmed – furthering financial demise in Europe. If European officials cannot agree on what to do about their own issues, the world becomes very nervous and a global chain reaction begins.
It has also been reported that oil is down by 2%: approximately $.30 cents in New York and $1.30 in the UK.
Reasons for Concern
Europe is a huge consumer of oil. Without a stable European debt recovery plan in place, a trend of low usage will manifest itself. There will be no real way to know if Europe will be able to afford the same supply of oil – or other merchandise, for that matter. This will have a direct effect on the price and distribution of oil, as well as on how Europeans travel. Changes in this behavior could certainly be detrimental to American tourism.
The prices went down due to an anticipated lack of demand, according to experts. This includes heating oil as well. However, it has been reported that the U.S. supply of oil has decreased dramatically because of an increase in demand, recently. Of course this has to be related to the recent storms as well. These were a hindrance to transporting oil, as well as causing a spike in demand, for that particular time. It seems that more oil is on the way from Libya, after a stoppage of over 200 days. However, the amount being sent is hardly enough to keep American consumers satisfied for long, unfortunately.
What Else is Being Affected?
What else is not being affected is probably a better question. As it stands, stocks have been going down and the Dow fell to a significant low at close on Friday as a result. Experts have stated that they expect for stocks to fall even further – possibly pushing America into a deeper recession.
This news is quite startling. According to the experts, Stark’s separation is being seen by some as a telltale sign of worse days to come.
Hope in Sight
If Obama’s job plan actually takes flight, there may be a chance for a trickle effect recovery. Many economists are on his side and believe his bill makes perfect sense and truly will work. It is now up to congress to bring the bill into being. This will pump new life into the American economy. It is believed that this opportunity for rejuvenation will be a promising start for all of us.
Associated Press: http://www.ap.org
Canadian Press: http://www.thecanadianpress.com
Yahoo! News: http://www.ca.finance.yahoo.com