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Posts Tagged ‘credit’

Just like what I post in the headline, G-7 financial leaders guarantee to take all necessary steps to unfreeze credit and money markets to prevent a global financial meltdown since the Great Depression in the 1930s.

Germany and France endorsed the plan of the United States to buy equity stakes in a very broad variety of banks and financial institutions.

The Dow Jones industrial average plummeted within 1,000 points before closing last week. On Friday, investors’ loss came almost to $100 billion.

Panic is the cause of this turmoil, the Financial Times reported this last week. Many investors panicked and sell that prompted the crash in the stock market last week.

The unstable swing in the stock market this past two weeks reminded us a lot like what happen in October 1929 when the Dow Jones industrial average gyrate sharply on October 23, Wednesday, and then came to a free fall the next day and it became known as “Black Thursday”.

The next day, a banker tried to save the day by buying shares in steel, and everyone thinks that this will help start the rebuilding of the market; however, the following week, seems to be much nastier than before because there seems to be no one interested to buy anymore and everyone were selling.

The index crashed by 13 percent and after that, the market took a beating again for another 12 percent. By early November, 50 percent was lost in the stock market’s value and many Americans saw their wealth slowly disappeared.

And what will you expect for the normal employees to experience? Of course, layoffs, millions were laid offs. Jobless Americans roam the streets. They all expect a dole out from the government to weather those times. If not only for those brave and cunning businessmen and entrepreneurs that tried to succeed, it might last much longer than expected.

Let’s all hope that history will not repeat itself because we don’t want another great depression to be felt by everyone now, because it is really terrible and awful to be in this state of life again.

PR: wait… I: wait… L: wait… LD: wait… I: wait… wait… C: wait… SD: wait…

Amidst the attempt of the United States to prevent a full scale crash in the financial stadium, the International Monetary Fund (IMF) warns of a possible meltdown in world finance.

IMF backed up the plan of the Group of Seven (G-7), the world’s industrialized nations, to try to help stabilize the stock market and take immediate action.

According to news, the government in the United Kingdom would launch its bank rescue on Monday on its four largest banks namely Lloyds, bank of Scotland, Barclays and HBOS with $60.5 billion of support.

In Australia, all deposits on banks, credit unions and building society will be guaranteed by the Australian government for three years.

In Germany, a rescue plan of $549 billion is being prepared including injection of equity capital.

France on its part promised to hold a meeting with European heads to help prevent the market in creating a mass panic and to create a better plan in countering the eminent financial crisis.

IMF chief Dominique Strauss-Kahn warns of a possible meltdown, but then expressed hopes that governments’ actions can help persuade banks in resuming its lending services to stop the spreading problem.

However, financial ministers from the G-7, the United States, Britain, Germany, France, Japan, Canada and Italy could not agree on a concrete measure to help alleviate the problem and unfreeze the credit market and ensures the bank can really raise enough money.

The G-7 also held a meeting with the financial heads of G-20 or the group of emerging nations on Saturday October 11 to effectively communicate what will be the action plan of one country so it does not affect other countries in its region as a whole.