Can we prevent the recession?
Asked by
squirbel (
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October 8th, 2008
Central Banks Coordinate Global Cut in Interest Rates
In a move of unprecedented scope, the world’s major central banks lowered their benchmark interest rates Wednesday, a coordinated effortto halt a collapse of share prices and a freeze in credit markets that threatens to set off the first global recession since the early 1970s.
The action failed to calm gyrating markets, however, amid the growing realization that a serious and prolonged recession may be difficult to avoid.
The Federal Reserve, the European Central Bank, the Bank of England and the central banks of Canada and Sweden all reduced primary lending rates by a half percentage point. Switzerland also cut its benchmark rate, while the Bank of Japan endorsed the moves without changing its rates.
In another monetary first, the Chinese central bank joined the effort — without explicitly saying it was doing so — by reducing its key interest rate and lowering bank reserve requirements to free up cash for lending.
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9 Answers
I can’t help but wonder if we should even be trying. It seems a natural part of the ebb & flow of economics. In many ways, it’s a correction mechanism and artificially preventing that seems to bring on its own risks.
I should have worded the question differently – because the “Can” I wrote was really asking “Are we capable of” instead of “Will we”.
I agree, rob.
LOL! I just noticed that there is a typo [that I inadvertently copied] in the NYTimes!
Note: “effortto”
Things will get worse before they get better. Whether it will become a technical recession or not is not yet clear.
GA to you, robmandu. You have a point. Real estate values were artificially inflated. They have not fully corrected yet.
“The night is darkest before the dawn.”
@robmandu: the market is cruel and heartless. Yes, the correction needs to happen—but it can happen in a way that makes millions of people miserable and causes significant damage to families and communities, or it can happen in a way that still hurts but isn’t as destructive.
@cwilbur, and the road to hell is paved with good intentions. :-\
I think it’s obvious that we can or are capable of saving the economy from a recession but the question is how do we do it? I think I’m confused. Is the question how do we do it or can we do it.
Yes, the economy is going to continue rolling forward.
Just like rob said, this is a natural correction. and people are scared to put their money back in because EVERYTHING seems uncertain. Once the money brokers have finished shuffling their money around, and the global leaders decide whether or not to tackle the issue of restructuring the global financial system, then “Main Street’ will be more comfortable about their spending and investing.
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