Worldwide interest rate cuts see stock markets recover
The concerted effort to repair the damage to the worldwide economy saw interest rates reduced across the board yesterday. In a move which seems to have gone a long way to at least halting the falls of later we saw rates slashed by authorities in the UK, US, ECB, Switzerland, Canada, Sweden and China. It seems that finally we have all governments around the world singing from the same hymn book!
The move has been well received by investors and major stockmarkets around the world have bounced by around 2% on open. Whether these improvements hold remains to be seen as there is still a lot of bearish news around and companies are still suffering.
As we have mentioned on a number of occasions it is feasible to compare economies with large tankers in that a movement at the head of the vessel will take a long time to register and a change of direction is not instant. However, with stock markets traditionally said to look at least 9 months ahead it looks as though there is at least some hope for the future.
But what is plan 'B' is this one fails?
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