A New Year Forecast

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Analyzing the data of the previous year, one can predict a certain change in the market trends.
The expectations of 2009 are higher as people want a stable market.
They want the conditions to be improved.
However according to trade analysts and market gurus, things are not exactly bright and there are chances that the situation will not be bright.
The Great Depression started in the year 1929 and since then one could see the massive stock losses.
As one looks the DJIA performance of the year 2008, one can predict a similar situation.
Although the economy of 1929 was an agro-based economy, one can find similar financial situation.
The situation is not very different from the year 1929 when there was a similar credit contraction which caused a severe meltdown in the economic scenario.
One could see that the collapse of the stock market was a result of this credit contraction.
A market collapse was evident.
The stockbrokers and the creditors were in a tough financial situation.
The stock holders were forced to sell a chunk of their shares.
In 2008 the Federal Reserve promised to back the credit instruments.
Although the money was printed, the money was spent in a number of areas like bad mortgages, bad car loans, and bad credits.
The ultimate aim to increase the flow of money was to decrease the level of inflation.
This will be part of that staged program of the Federal Reserve.
Even the Federal Reserve cannot amend the situation.
The faulty monetary policy can result in a lot of problems.
President Obama is on a war footing to rectify the condition.
All those who are facing a lot of financial difficulties because of a bad loan situation are trying hard to get rid of this problem.
A personal stimulus plan is indeed essential.
Obama has sanctioned money to solve the huge debt problem.
However one cannot stop the loss of jobs.
According to predictions, there will be a loss of more than 60,000 jobs per month.
This is staggering financial condition where employers and employees are in trouble.
Even the public companies have seen a decline in the recent years.
The profit margin has decreased over the years.
The prices of the stocks have decreased and most of the stock holders are forced to sell off their bonds and shares.
The situation is just like the year 1929.
Although there are many who feel that the condition might improve a little in the year 2009, yet not much can be hoped from the severe economic meltdown situation.
Now the bank failures and the job cuts have also affected people from all over the world.
There is limited access to funds these days.
Never before there has been government intervention in economic downturn, but things are different and the Obama government is trying hard to set things right.
However sanction of loans and money may not be the ultimate solution.
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