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Titled: Mortgage Interest Cut Drives the Market Towards a Bull Market.
Mortgage Interest Cut Drives the Market Towards a Bull Market.
Article Summary: Fed and Ben Bernanke did cut interest with 50 points which helping the US economy to stay out of a recession. Though critics is not impressed by the FED:s decision to move interest as much as 50 points. The slowdown of the US economy is according to critics not as steep that an interest cut is necessary, but Fed seems to be terrified that the US consumer should stop spending money cause the proble
Fed and Ben Bernanke did cut interest with 50 points which helping the US economy to stay out of a recession. Though critics is not impressed by the FED:s decision to move interest as much as 50 points. The slowdown of the US economy is according to critics not as steep that an interest cut is necessary, but Fed seems to be terrified that the US consumer should stop spending money cause the problems in the housing sector.
What is worth to comment is the fact that the situation in the US caused by the subprime mortgage is that the US stockmarket and the emerging markets not been taking off guard. The broad European markets on the other hand have really coming off and not been finding it way back the last couple of months as the US and emerging markets.
As an example the broad European markets is down around 10 % the last three month when the broad Asian markets is up approximate 30%. This is something that historical speaking is very rare and an indication that emerging markets more and more driving the growth independent of the US consumers. Instead the growth comes from consumers within the domestic market of emerging regions worldwide.
In the end of the twenty century the driving force of the bull market was that a specific sector should change the future of global growth world wide. At this stage we see regions that never had any domestic growth from consumers. For the first time domestic consumers within these countries coming up to a level where the consumers themselves can spend money on more than just food on a daily basis, and reach a level where people are able to lend money, buy there own homes and build future wealth.
Today around 80% of the world’s population lives in emerging markets. As stated before this is for the first time in the history of mankind that the impact of the global economic growth have had a direct impact of the daily life of the population in the emerging markets. What exactly that will lead to is hard to know but what we see in China today is something that will follow in country by country world wide. China is first out of the big emerging markets moving in to the world of an open market where supply and demand rules and dictate the trading on a daily basis. Russia is close to get there and India will follow as soon as India infrastructure is improving.
The tremendous move we see in China today is probably the beginning of a bubble and the consequences when that bubble burst will have a great negative impact of the world economy. When this bubble is getting out of hand is as always hard to predict but an prediction is that a significant move in India will follow and move the emerging markets before it in the end getting out of hand.
Until then is an alternative going long emerging markets and holding back on some of the investments in developed countries and regions.
Article Source: http://www.upublish.info
About the Author:
Armand Glans
Armand is writing about the stockmarket, trading and investing - using finance and mortgage affiliate program on his blog.
Keywords: FED, investment, interest, mortgage, subprime
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