euro|topics - Could the stock exchange crisis last?

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Tema destacado del Viernes, 17. Agosto 2007

Could the stock exchange crisis last?

The stock markets continue to undergo a considerable decline because of the high-risk mortgage crisis in the United States. The press analyses the weakness of the financial market and wonders if the current crisis will get any worse.

Die Presse - Austria

"Not only will the global financial crisis triggered by the US mortgage market cause further turbulence on the markets, it will unsettle the currency markets and slow down the global economy," Josef Urschitz concludes. "All [the experts] agree that there's more behind the turbulence than the payment problems of a couple of 'sub-prime' US mortgage financers who have made investors nervous. It's looking increasingly like what we're witnessing is a serious crisis in the financial system that will keep the world on tenterhooks for some time to come - and despite the comforting words and fervent denials of politicians and the financial sector, will also have a negative impact on the real economy. At the very least, the result could be a slowdown, if not full-blown recession, on important markets. Those who think this is just about a summer sale on the stock markets and that everything will go back to how it was before by September are probably mistaken." (17/08/2007)

Népszabadság - Hungría

Could there be a repeat of the great crash of 1929 and the worldwide economic crisis it triggered? asks Miklós Blahó. "The uneasiness that has been evident for weeks bubbled over into a full-blown nervous breakdown yesterday, with the world's stock markets suffering average losses of between three and four percent. The Budapest stock market was also affected. This had the effect of considerably weakening the country's currency. We can only hope that yesterday's Black Thursday lives up to the events of 1929 only in name... The global economy is growing rapidly, although this growth is mainly due to the Chinese and Indian markets rather than the US market. Nonetheless, it seems likely that the markets will recover - albeit slowly - from the crash. We'll just have to wait until all the risky loans have been paid off and the insolvency proceedings of all the investors hit hard by the crash have come to an end." (17/08/2007)

La Stampa - Italia

"When stock markets plunge into disarray, one question arises immediately: is this a crisis as big as the 1929 crash? Leafing through the past ten years' press, it is easy to note how frequently an analogy is made between the Great Depression and the occasional fall in the stock market." Giuseppe Berta, professor of industrial history, recognises that there are "of course affinities. The stock exchange also feeds on irrational impulses that incite instinctive acquisitions. ... The difference, from an historical point of view, is the capacity institutions have to deal with this panic. In 1929, this was lacking ... : the Great Depression was a fall no one knew how to respond to. ... If swinging from euphoria to panic is part and party of stock exchange mechanics, government efficiency and institutions' foresight are indispensable counterweights.” (17/08/2007)

The Independent - Gran Bretaña

The daily considers that "it is vital that central bankers resist the pressure to push through interest rate cuts beyond very short-term injections of liquidity. Recession is not a serious prospect with the global economy growing at a healthy rate. Moreover, any free market needs the prospect of failure if it is to function properly. Those financial institutions that have left themselves overexposed on account of their imprudent borrowing or lending must be left to deal with the consequences. Cutting interest rates to inject confidence artificially into the system would make financial speculation a one-way bet. Unwise investors and borrowers in the City and Wall Street have been bailed out too often in this way in the past by central banks. And unjustifiably low interest rates for an extended period of time have contributed to the present mess. Put simply, if you make money too cheap, people will get greedy and begin to make misjudgements. This is what has happened over the past five years." (17/08/2007)

» de toda la revista de prensa del Viernes, 17. Agosto 2007

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