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The Credit Cruncher was conceived to help you to keep up to date with credit crunch and recession developments, it provides some helpful credit crunch advice and it addresses personal debt. The Credit Cruncher also seeks to explain how the credit crunch started and shed some light on the worldwide recession. Recently, we have begun to look at how BREXIT will affect the UK economy. Please feel free to leave comments where relevant.

14 Oct 2008

Gordon plays his hand

Gordon Brown plays to his strengths and his latest moves to encourage Europe to stand behind their banks have played a major part in the recovery of the stock markets, but is the stock-market a realistic indication of economic well-being?
There are two major problems facing the Western Economy, on the one hand there is the collapse of the 'market' as share prices plummet, on the other there is the major recession just around the corner. Only one of these problems has received what could turn out to be a temporary reprieve.
How was this done? In fact it was quite literally a confidence trick... a bluff (that will hopefully work) to show the world that we are in charge of our own economy, but the chips on the table are all ours...
In a very real sense this 'trick' is much-needed to counteract the over-playing of doom and gloom that has affected the markets. The markets have done what they do best, they have over-reacted, the big gestures by all the leading Governments will help to inspire confidence in the markets alone - this should arrest some of the loss of confidence in the Western economies around the world, but it will not avert recession, the best we can hope for is that it takes some of the 'edge' of the worst of it.
Don't get me wrong, I am against market intervention in principle, but if you are going to do it, you have to do it big and right now Gordon is going for it - only time will tell if it will be enough to prevent a meltdown in the stock-exchange. He is now leading from the front and has the confidence in his economic beliefs to take the rest of Europe with him.

Related posts:
The Bush plan is approved
The Bush plan falters
The Bush rescue plan begins
Government Intervention


Rachel said...

I am hoping things will improve towards Christmas. People always spend more then and if spending goes up then hopefully the whole economy will improve.

jay said...

I have heard people say that they will still spend a load a Christmas - I'll leave it up to them to stimulate the economy...could be bad news by about February when the credit card bills are all in though...

Ross Taylor said...

Jay, pardon my French, but Credit Card providers must be bricking it right now.

At a time when they'd probably want to reign in credit limits they are going to getthe biggest UK battering ever when the middle class try to prove how much they love their kids by buying the whole of Woolworths on tic.

jay said...

I think they would be bricking it more if people stopped using their credit cards and paid them off!!