The Fed has cut interest by 75 basis points. But is this going to stop recession in the US and possibly in the world economy? I cant answer for sure and same would be the case with most if not all.
But, has the Fed and the US govt. over-reacted to the situation? In my assessment, they have. Even if someone was in any sort of doubt about the state of the US economy, the actions of the Fed would have convinced one and all that something is really really wrong. Nothing can be assessed for sure till we have a clear estimate of how much will all the banks lose in the next 1-2 quarters (even some of the banks themselves may not have an answer to this!!!)
Interestingly, all the talk about the so called decoupling of Asian economies has disappeared with the meltdowns of the last 3-5 days. I write this as one among the many losers in the equity markets who have suffered in the last week :-(
Good time for an MBA...
PS: I'm not anything close to an expert in economics. So if anyone finds this piece a complete waste of time, please enlighten me with your views.
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