Wednesday, February 11, 2009

Burst Blood Vessel In Balls

The crisis and the credit markets

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The consequences of the global financial crisis, do not seem to have been at all and the proof is the expectation that exists in markets around the different sectors that may be susceptible to collapse in coming months.

Many analysts believe that the actions being taken by governments in relation to the economic recovery plans of the countries can only cover part of the real sector deficits begin to perceive.

Perhaps one of the most clearly affected the automotive industry, where large companies like General Motors has already announced the reduction of 10,000 jobs in 2009 and Chrysler, which temporarily closed 4 of its production facilities, because the fall in demand for vehicles.

Given this, some economies have sought to remedy the problem with bailouts and debt securities issues on the international market, such is the case of Brazil, which has just 1,000 raise million U.S. dollars and 25 million in Asian markets, by issuing ten-year bond whose yield was around 6.127% per annum.

This situation reflects the liquidity of the market is moving towards economies with growth potential despite the crisis, which does not necessarily apply to other, sure to start issuing debt to finance their domestic needs. These economies may look to Colombia, Panama, Chile and Venezuela, carrying some debt issues in the international market in the coming months.

is obvious that the shortage of available credit, will deepen the As financial institutions require greater amounts of money first to support public deposits, which led to panic may be pulling the financial system and secondly the loss of market value of investments and long-term .

In this sense, one of the largest banking concerns at this time lies in credit card debt, because with the massive wave of unemployment and excess consumption in previous years that generated high debts that have accumulated in time, the industry could suffer another collapse, having to supply with funds the non-payment of these debts.

Impact end of the crisis will depend largely on market reactions and their duration may be much greater than originally expected, since everything depends on the setting to achieve economies and the nature of the social impact they have. The higher the impact, the crisis may be extended although the numbers of companies start to be positive.


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