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.
