This Article is About
debt crisis
us unemployment rate
real estate sector
The Real Reason Behind The Debt Crisis Is The Absence Of Solvency In Markets
Join 1000's of Authors at StreetArticles Today!

The Real Reason Behind the Debt Crisis is the Absence Of Solvency In Markets

By e-Focus Stock Watch

After last week’s decision when central banks cut the swap rate by 0.5% markets are celebrating. With no doubt this action will give liquidity to the banking sector since the rising demand for dollars leads to higher borrowing cost. But we should not disregard problems which still exist in the global economy and maybe lead markets further down:

• the real reason behind the debt crisis is the absence of solvency in markets which leads to liquidity problems. Undoubtedly the decrease in swap rates will give a boost to the money markets but still the root is that markets does not trust anyone anymore. Even German 10-year bond showed significant increase at 2.26% the same happened with Spanish 10-year bond at 6.70% and Italy’s 10-year bond at 7.26%. The yields above are showing the global concern about the European countries and how much unwilling are central banks and private investors to finance them . Concluding, the benefits from this central banks decision maybe are for short term period but also means that for one more time central banks came too late and used the wrong medicine

• U.S stocks are not cheap since they trade 21 times average earnings of last 10 years according to data compiled by Yale economics professor Robert Shiller when at the same time the average since 1880 has been 16 times

• the US unemployment rate is still too high 9%, number which does not really reflect the real unemployment rate since a big proportion from them are part time workers so they cannot really help U.S. growth since they have not enough money to spend

• countries such as Spain or Italy are on the way to IMF. Greece’s crisis picked after IMF came and saw behind curtain of Greek corruption this means that maybe IMF unveil secrets in Italy’s or Spain’s economy that will lead market closer to the bottom

• at the moment China’s economy hold global economy from total collapse but the last results from the real estate sector are showing a significant slowdown that reflects to the Chinese economy too… even though I believe the Chinese economy will continue to expand the question is for how long

• we should not forget the Santa Claus rally that boosted by yesterday’s news. Usually it takes place around middle of December and picks New years eve but this time maybe came earlier especially after last week’s 7 consecutive negative closes


Street Talk

Hi George, In addition to those reasons, wrong strategies and solutions is costly and a whole lot of wasting of taxpayer's money. Unfortunately, people like Warren Buffet is not even proposing to raise taxes for the rich. That is totally not the answer. If you will read my article (part 1 for now) you will learn more. But we need to all team up to educate the American people and our leaders in the government. Regards, Daniel

Reply
  about 9 years ago
You May Also Like
The US Debt Crisis: Good News And Bad News
Well folks, the proverbial snowball is going to continue to keep rolling down the mountain. With the debt ceiling agreement deadline looming, it looks like the Senate Democratic leader Harry Reid along with Presient Barack Obama have finally caved, and have agreed, along with the Senate Republicans to raise the…
By: Scott Oberholser in  Politics  >  World Politics   Aug 01, 2011  
4
  Likes: 3

Greece Debt Crisis 2011: Could China Be the Savior for Greece And the Eurozone?
Recent Development in Greece Debt Crisis 2011: The financial market has been sporadic in recent weeks as Greece is neogotiating a bail-out package with the EU and IMF to help cut its government deficit. There has been rumors that the bail-out packaged maybe delayed till September as EU and IMF…
By: Chun Tak Nicholas Tsoi in  Investing  >  Day Trading   Jun 20, 2011  
0
  Likes: 1

House Passes Deal to Raise Debt Ceiling
Look I have to be honest I do not think that this is a good thing for the United States. I mean how much debt are we already upside down in? Too often our society is always taking the quick fix route. This is what has happened today with raising…
By: Travis in  News and Society  >  Economics   Aug 01, 2011  
0
  Likes: 0

Why Do Employees Leave And How to Retain Them
It might come as a striking surprise for many that at a time of exceedingly harsh economic climate, with the US unemployment rate hitting double-digit numbers for the first time in decades, the majority of those who leave their jobs do so because they quit, rather than because they are…
By: Ted Pass in  Business  >  Consulting   Feb 24, 2012  
0
  Likes: 0

Best Way to Invest Your Spare Money
Real Estate Property regardless residential or commercial if one has some spare property and can wait for patiently then no doubt can still make enough money. Though the property boom has gone and people are not investing in real estate market like 1-2 years back but the demand is still…
By: Property Vakil in  Real Estate  >  Selling   May 07, 2011  
0
  Likes: 0

Swiss Billionaires Business Office Addresses By Advisor BEN Campbell
Switzerland is not only "super-secret about everything, it is also the center of the economy of the world. Switzerland now has more than $2.5 QUADRILLION in assets. And, most of that is controlled by a group of about 201 SWISS BILLIONAIRES. SWISS BANKERS SWISS BANKERS when they want "contact information"…
By: Ben Campbell1 in  Investing  >  Stocks   Apr 26, 2016  
0
  Likes: 0

How Does Capital Properties FX Help You Learn Forex Trading Step - by - step
At Capital Properties FX, we are a young team of highly dedicated professionals with over 7 years of experience in online currency trading. If you plan to dive into the lucrative world of forex trading, we can help you learn everything you need in the least amount of time. Our…
By: davidjack2 in  Investing  >  Stocks   Jan 21, 2016  
0
  Likes: 0

Bookkeeping Monster Offers You Best Bookkeeping Service By Experts
The systematic way of classifying, recording and also reporting of financial transactions in large, medium and small companies is known as bookkeeping. By outsourcing such services is an essential bookkeeping prerequisite for each company. Any pivotal data ought to never be neglected in light of the fact that the subsequent…
By: Mike Jensen in  Investing  >  Stocks   Oct 28, 2015  
0
  Likes: 0

Tax Free Investments Available for Frisco TX Investors
Many are familiar with Roth IRAs and traditional IRAs as types of investments that are tax free, but they are not the only tax free investments Frisco TX residents can take advantage of. Although IRAs are effective places to park your money until retirement, there are several other ways to…
By: Stephen Cheung in  Investing  >  Stocks   Aug 10, 2015  
0
  Likes: 0

2015, The New 2008
It has been 7 years since the financial crisis of 2008 gripped the world, although it still makes the news on a regular basis. Perhaps in order to avoid chaos, just before the crash many leaders were quoted as saying everything was fine and knowing that it wasn’t. “The subprime…
By: michael61 in  Investing  >  Stocks   Dec 30, 2014  
0
  Likes: 0

Forex Trading Tools: Developing Your Skills for Consistent Profits
Foreign exchange is recognised as the most liquid of all financial markets because it involves trading on a global level. This means everyone from individuals to corporations, banks, and governments can participate and do so with other goals in mind rather than just for investment. News and events at the…
By: Ondrej Machacek in  Investing  >  Stocks   Aug 12, 2015  
0
  Likes: 0

Want to Know More About Forex? A Great Article Awaits!
Forex trading opens up great opportunities for making a profit, but also great opportunities for making a loss, especially for inexperienced and undisciplined traders. However, there are always ways to increase your chances of making a profit and reducing risks. The currency exchange market is hungry for savvy traders who…
By: Ondrej Machacek in  Investing  >  Stocks   Oct 27, 2015  
0
  Likes: 0

Online Trading In India -
Our UFXMarkets winding up their worldwide service through online Forex trading company, Forex trading in India, Forex trading online India, online commodities trading, UFXmarkets, online futures trading, stock indices for an assortment of online trading community. The top most online commodities Trading are giving their world services by esteemed trading…
By: ufxmarkets in  Investing  >  Stocks   Dec 24, 2013  
0
  Likes: 0

What You Need to Know When Looking at Short Term Investment Strategies
As a general rule, investing should be considered as a long-term game, with most independent financial advisers keen to point out you should be looking to keep your investments in place for at least five years, but there are situations in which you would be looking for more short term…
By: Don Meyer in  Investing  >  Stocks   Apr 17, 2011  
0
  Likes: 0

Getting the Best From Your Stock Investment Strategies
Are you looking to get the best from your stock investment strategies? When it comes to investing, investors first need to decide on whether to choose a strategy where they are personally responsible for choosing their own stock picks or whether to find a fund to invest their money for…
By: Don Meyer in  Investing  >  Stocks   Mar 29, 2011  
0
  Likes: 0

Article Views: 1772    Report this Article