. Water Industry Network HC : Lehman Brothers in August last year, this fifth-largest U.S. investment bank in the business 80 years, from 2007, the highest price 170 U.S. dollars has slumped to August 2008 of two U.S. dollars, the last because no company is willing to bail out the bankrupt. Ten years ago, in 1998, Long-Term Capital Management crisis, the Fed has organized 14 Financial Agencies to save, this time to save Lehman Brothers refused to participate in the initial plan, leading to other big banks, “to see how it died!” The most Houlei Man brother is really dead, but less than 48 hours later, the Federal Reserve Board to quickly open the discount window to investment banks and other financial institutions, so that Goldman Sachs, JP Morgan Chase were not affected, but can not stop the financial tsunami sweeping the globe.
August 3 this year, Greenspan said the U.S. economic recession is approaching the end; but China International Finance Research Institute, said Song Hongbing, the United States from the consumption-led economy, as the financial crisis and an aging population, the next ten year in the consumption decline, these elderly people in the United States lost nearly half of the financial crisis, the future had to live frugally. In March this year, the U.S. government 780 billion U.S. dollars of stimulus plan, create only 15-20 million jobs, the unemployment rate failed to improve. The above analysis, he thought the United States ended the era of high consumption, mass consumption in the past by the European and American consumers have been triggered by the end of economic prosperity. Many foreign economists hope that China will lead consumption in Southeast Asia against the global problem of excess production of consumer goods, but said Song Hongbing, the Chinese population aging will occur in 2035, only twenty years later than the United States. The face of weak external demand in China, depend heavily this year to promote economic investment. As for consumption, the disparity of wealth in China, 1% of the population controls 50% of the wealth, as in other countries have a large middle class. The export-led China to boost domestic demand, there will be a painful transition.
Eyes through non-traditional monetary policy created by the stock market rise, the final result? No one can know in advance, and now are sitting back to levels before the crash of Lehman Brothers. Stock market return to “normal” level (ie in the level before the financial tsunami), economical and can return to “normal” level? According to “Time” magazine, since 2007, the United States mature business turnover drop 30 percent or 50 percent; contraction has become a trend!
S & P 500 index from 1970 to 2007 in the past 38 years, average annual investment return of 10%, 26% during the year from negative to positive 37% of the year are. The next 10-20 years, S & P 500 could still generate 10% annual rate of return it? RichardBookstaber that the credit contraction starting from 2008, now only rely on product price to attract more buyers, of course there are the days of short-term rebound. Quantitative easing policy in support of an estimated 2008? 2009 (October only) The U.S. budget deficit will reach 1.8 trillion U.S. dollars, surged four times over last year. The huge fiscal deficit can be long and still nothing happens? U.S. bank this year to 0.25 of a percentage interest rate available to the Federal Reserve to borrow money to buy ten-year interest rate 3.75 PCT bonds, real earn 3.5 PCT, thus to “create” Bank net profit; also can take advantage of low interest loan funds to customers, support them to buy homes, buy a car or even play the stock market, but the situation is “normal” it? If it is “abnormal”, then how long can this situation?
HSI return to the level before the Lehman crash
Accident this week is the first anniversary of Lehman Brothers. Day last year, the financial tsunami triggered by various governments and successful quantitative easing monetary policy to prevent the collapse of the global financial system, the Hang Seng Index to return to the level before Lehman Brothers crash. But this recession is over, or just a “break in”? Hedge fund managers MichaelSteinhardt that nobody dares to long-term bullish today, everyone can catch up again a short amount of ground in the credit crunch Environment It is impossible to occur long-term economic prosperity, everyone guessing by the March 7 U.S. stocks began rising in the end may be how long? U.S. stock short-selling by the end of July to the lowest level since February of this year (particularly the financial sector), just short of 87 million shares, or a large margin call to action has been largely completed by the end of July.