Will Banks and Financial Markets Recover in 2009?

Will Banks and Financial Markets Recover in 2009?
(From The Guatamala Times, By Prof, Nouriel Roubini) Read whole article, click on link.

So what lies ahead in 2009? Is the worst behind us or ahead of us? To answer these questions, we must understand that a vicious circle of economic contraction and worsening financial conditions is underway.
The United States will certainly experience its worst recession in decades, a deep and protracted contraction lasting about 24 months through the end of 2009. Moreover, the entire global economy will contract. There will be recession in the euro zone, the United Kingdom, Continental Europe, Canada, Japan, and the other advanced economies. There is also a risk of a hard landing for emerging-market economies, as trade, financial, and currency links transmit real and financial shocks to them.
So 2009 will be a painful year of global recession and further financial stresses, losses, and bankruptcies. Only aggressive, coordinated, and effective policy actions by advanced and emerging-market countries can ensure that the global economy recovers in 2010, rather than entering a more protracted period of economic stagnation.

Nouriel Roubini is Professor of Economics at the Stern School of Business, New York University and Chairman of RGE Monitor (www.rgemonitor.com), an economic and financial consultancy.

Bank of England cuts official interest rates to 2 pct, ECD cuts to 2.5 pct

ECB verlaagt rente tot 2,5 procent

De rente in de eurozone is spectaculair verlaagd. De Europese Centrale Bank (ECB) heeft het belangrijkste tarieft met 0,75 procent omlaag gebracht naar 2,5 procent.
De afgelopen maanden is de rente ook al fors naar beneden bijgesteld; zowel in oktober als in november ging er een half procent af.
Zelden worden zulke grote rentestappen gezet, meestal blijven verhogingen of verlagingen beperkt tot een kwart procent. De snelle en forse daling heeft te maken met de economische crisis. Door de rente te verlagen (geld goedkoper te maken) hoopt de ECB dat het opgedroogde kredietverkeer tussen financiële instellingen weer op gang komt.

Te ECB website had a time out, possibly due to heavy traffic. They should fix that! We do not all have limitless time.
Key ECB interest rates
The Governing Council of the ECB sets the key interest rates for the euro area

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Bank of England cuts official interest rates to 2 pct ahead of European Central Bank decision

LONDON (AP) -- The Bank of England has slashed official interest rates by 1 percentage point, bringing the rate down to 2 percent, as it attempts to ward off a prolonged recession.
Thursday's decision by the central bank comes shortly before the European Central Bank is also expected to announce a cut in rates, widely tipped to be at least three quarters of a percent to 2.5 percent.
The cut in Britain takes rates down to their lowest since 1951 and many economists are predicting they will fall further in coming months, to as low as 1 percent or even zero.
Official figures have confirmed that the 15 countries that share the euro are in recession, while in Britain, the government has warned the economy will contract by over 1 percent in 2009.

The Swedish Riksbank cut rates by a record 1.75 percentage points.


(Dec 4- 13.45 CET) Pre-Market trading points to lower openining for US markets.