Markets are nothing but a James Bond movie

It is evident that financial markets are unstable and lack liquidity. No matter how hard the Federal Reserve tries to pump in cash in the banking sector, the U.S. dollar seems to be seeing a downward turn. When after a long drop dollar does go up for a single day investors rejoice thinking 'tomorrow never comes'. It certianly looks like a bond movie to me, James Bond- Reserve Bank trying to save the banking sector and the investors - the heroine, and the slowing economy (credit losses) - villian. The only problem in the real situation is that the rescue process may take as long as a year, that is if the markets recover on consumer confidence.Comments are welcome on what others think about this.

Liquidity problem still prevails

Financial Markets are still facing liquidity problem. The U.S. Federal Reserve is trying it's best to maintain confidence among investors by cutting interest rates on the borrowing loans given to banks. Due to interest rate cuts government securities have risen giving a safe investment option compared to the volatile equity markets. Rising bonds have still not brought any respite to the weakening dollar, which has weakened against the euro, the yen and the pound. The fall in dollar price has effected the commodities too, at one time these were traded to hedge against equity risk but now the commodities cannot go any higher as a correction was going to happen and now it has. Oil and Gold are overvalued and they are bound to go down. Not a good time to buy gold. The Federal Reserve needs to come up with a very good plan to bring some confidence back into the markets. But one thing is sure that this credit loss crisis is far from getting over, it will continue in the next year too, unless there is a miracle.

Indices rise on Fed. cut news

Markets in the U.S., Europe and Asia rose yesterday,18th March 2008, after news was going round that the Federal Reserve will cut the interest rates further on direct loans offered to banks. The markets witnessed a very good trading day showing an increase between 3 percent to 4 percent in the markets overall, showing some amount of confidence generated among the investors. Apart from this there were still concerns among investors that the credit loss crisis faced by banks is going to widen even more, discouraging people from taking home loans. The Manufacturing also slowed down a lot, effecting the industry and it's earnings. At one end the Federal Reserve is figthing hard to retain investor confidence by cutting interest rates and on the other end investors are loosing hope of any recovery in the credit loss situation, creating more liquidity problems in the market, which is lowering the dollar rate against the Euro, the Pound and the Yen, putting the pressure back on the Federal Reserve to come up with a concrete, effective and a permanent solution to the economic slowdown. It is very likely that the Federal Reserve may not be able to bail out all the banks during this year, it is very likely that this situation is going to continue in the next year also.