Tag Archive for US economy

Swiss Franc Rising – Economic Miracle or Walking Zombie?

swiss-franc-picture-courtesy-of-the-investment-site-at-wwwdoitinvestcom If you are a forex trader, you of course noticed the advance of the CHF (swiss franc) against most of the other currencies. According to the OECD’s calculations, the swiss franc is 44% overvalued against the dollar and 42% overvalued compared to the euro. And this has happened steadily in the last 6 months or so, without a retreat.
What would be the explanations?
One of them, widely accepted among the forex traders, is that the CHF is a so-called proxy (similar indicator) for gold and other commodities. It is understandable that the investors are not willing any longer to bet on the gold, which has risen 6 times during the last years and which is causing a “tulip mania” among masses. And whilst other commodities are harder to trade and more volatile, the CHF is still a paper currency, backed by the Swiss National Bank, which has some advantages. Read more

How Long Will the Financial Crisis Still Last? (3)

recession-street-how-do-the-shops-close-downHere we go again with one more doitinvest.com survey on how long might still last the current financial crisis / recession. Compared to the last two surveys we had a couple of months ago, this one seems to be pretty more optimistic. This optimism is fueled by the recent slow recovery of the stock markets (see the Dow Jones recovering sharply in the last two weeks), as well as by the pace of the bad news pouring in at a slower pace.
The financial investing experts surveyed by doitinvest.com point out at four main causes of their optimism: Read more

Will Further Interest Rates Reductions Boost The Economy?

Well, our survey has different views included, as usually. The answers tend to be pretty structured though, so let’s see the results.

The theory, as previously explained by doitinvest.com in a previous investing blog, says that the interest rate cut executed by the FED should boost the US economy. By reducing the refference interest rate, FED actually reduces the borrowing costs of the US banks. This is because the banks attract an important portion of their cash through loans from FED at the official interest rates. obviously, the lower the refference rate is, the lower the costs for the banks, which in turn are encouraged to lend money at smaller costs. The ultimate beneficiaries in this lending chain are the final consumers/companies, which should benefit from borrowing facilities available at lower costs. Read more

FED Warning On More Tough Times Ahead

bernake-feds-chairmanFederal Reserve Chairman Ben S. Bernanke warned today in an interview that a fiscal stimulus package will be enough to generate an economic recovery. He also added that the government may need to buy or guarantee banks’ problematic assets to revive growth.

“Fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system,” Bernanke said in a speech held today at the London School of Economics. “More capital injections and guarantees may become necessary to ensure stability and the normalization of credit markets.” Read more

US jobs losses, less money to spend or invest

On Friday, June 6 2008, a striking piece of news came sharply on the market. The  U.S. employers shed jobs for a fifth straight month in a row. The May unemployment rate jumped to its highest in more than 3-1/2 years, partly because more people were trying to come back into the workforce, a Labor Department report released Friday showed.

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