Worldwide government leaders hoped their recent summit would calm investors even though they didn't really come up with anything specific. But it looks like a non starter. Asian markets opened down on Monday morning, showing disappointment that more didn't come out of the summit, European markets followed suit and U.S. stock futures are indicating a lower open as well. Also, news broke that Japan and Hong Kong slid into recession.The value of both the Yen and the U.S dollar rose as investors looked for safety. Their actions show they were disappointed with the summit and with the fact that world leaders didn't take more concrete steps to avert a global recession.
What did the Group of 20 agree to do? They all agreed to act independently to be sure financial markets, products and participants are subject to supervision, but no coordinated plans were developed. The fact that the leadership of the U.S. is in flux for the next couple of months until President-elect Barack Obama is inaugurated in late January didn't help matters. While he sent Representatives to the meeting only President George Bush attended.
The Group of 20 also agreed there should be tougher accounting rules, a review of compensation practices and greater cooperation between national regulators, but nothing made it into writing. Hopefully, nations will continue to work behind the scenes to develop more concrete plans soon. The world is watching and waiting for economic direction, but the economic ship still seems to be zigging and zagging with no clear path.
The only two issues that appear to be on the agenda in the U.S. Congress during its lame duck session is some kind of economic stimulus and a possible bailout for the automobile industry. Given the fact that the makeup of the Congress will be dramatically different in January, I doubt we'll see anything major pass until next year.
Lita Epstein has written more than 25 books including "Reading Financial Reports for Dummies" and the "Complete Idiot's Guide to Value Investing" (due out in January).
The only two issues that appear to be on the agenda in the U.S. Congress during its lame duck session is some kind of economic stimulus and a possible bailout for the automobile industry. Given the fact that the makeup of the Congress will be dramatically different in January, I doubt we'll see anything major pass until next year.
Lita Epstein has written more than 25 books including "Reading Financial Reports for Dummies" and the "Complete Idiot's Guide to Value Investing" (due out in January).
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Reader Comments (Page 1 of 1)
11-17-2008 @ 11:27AM
william lindblad said...
The problem is larger than the combined ability of the G-20. It is unique, diverse, complicated and above all, confusing. Even if a combined effort is to be made - where do you start? The blame centers on the U.S. simply because it is the largest market and has received the most media attention, but similar banking and housing problems exist from New Zealand to Ireland to the Baltic regions. The cancer is all over and one reason why the individual leaders worry more about their own back yard first.
Either ALL get together on a firm game plan in the next six months or the economics of the entire world will continue to slide downward until a depression level is reached. They have to find a way to stabilize and restore confidence as humans run on hope.
Housing is at the bottom and that has to be cured first.