Fed Rate Cut: Future Stop, Zero?

Financial Crisis Thoughts

There is indeed need sometime for overcoming this financial crisis. Anyhow, I would like to share some point of view of this crisis.

The public / people are holding shares, due to unseen future, tends to listen to many parties' comments and sources. When unexpected shares down, it seems like there is some reason to be blamed or expected, just like you know what is happening and report why it is happening, such as news from Japan, and Asia where there is a downtrend. Well, for me, it really creates confusion whether the Asia market is affecting the US economy or the US economy relates to Asia, and so on.

Due to unseen future and confusion, people would suggest to have some proof that it's really a financial crisis. This is how market works to get proof, I suppose. I guess the simplest task is by teaching people when everything is bad, take out all money, right?

It really creates less cash flow in the market. When this happens, the purchase power is getting low whereby people prefer keeping money or transform into another entity.

Without the purchasing power, companies stuck with sales target, and therefore supplies > demand. Create higher unemployment rate.

Next, while everyone believes that the economy is not in good shape. Therefore the crude oil demand is getting low. With the demand low, who would like to keep crude oil stock that does not has fixed cost.

I wonder if the economy is good, the crude oil price would be higher? I believe this is the crucial stage and the longest stage for a economy to heal. While oil operator would like to achieve higher profit as before, the other business operators are trying hard to get sales, budgeting the expenses, create jobs, and to maximize the profit for the public share holder.

In a nutshell,

1. Market shaken when big company shakes.

Indicator : The biggest proof, the biggest the market shakes.

2. There is an excessive cash flow before the Big Event e.g. Olympics. Indicator : Why things happen after the event.

Nobody would announce the company is in bad shape before the event, as it would jeopardize the Olympics.

3. When there is an increase of jobless in a specific area.

When there is an increase of credits in a specific area.

Gosh! Bank should have known this and so with local authorities.

For New Formula

1. Get down to people on unemployment issue.

2. To break link between economy and crude oil.

It is time for alternatives sources, a more variety in energy savings. Those operate crude oil, should start with alternatives sources, creates varieties of jobs.

3. Bank should spend money on improvement of the system.

Such as how much bank would save for bad times.

Financial institution would work with local authorities with identified issue. Bank is the centre of money collection for every product that is being introduced.

I guess nowadays, when everything is fine, everyone works on separate ways which is selfishness. If everything went wrong, everyone is linked together.

Thank you.

Steven @ Oct 29, 2008 20:15:42 PM