Recession is coming soon?

World index falling precipitously almost by the day due to a lot of bad news~Citigroup’s USD10 billion loss;Merill Lynch was reported loss of USD15billion due to soured mortgage investment. KLCI sustained last week due to the election rumour.But till now,our Prime Minister hasn’t given a clear hint. This causing the KLCI acted as a roller coaster, plunged from 1500+ to 1400+ within a week,evaporated RM81.7billion.

Wall Street investors are asking what it will take to revive it.Politicians are scrambling to offer a stimulus package and Fed Chairman Ben Bernake is slashing interest rates.

The wobbly economy is overtaking Iraq as the issue weighing most heavily on the minds of America’s voter. The White House and Congress are almost certain to enact some kind of stimulus package.But like all such temporary,feel good measures will quickly evaporate. In reality only one player has the power to do anything swift and decisive~the Federal Reserve(FED). And its chairman has hints clearly for further reducing interest rate at the Fed’s meeting on 29Jan,2008. The cure he is prescribing may be worse than the disease.
It is likely to lower rates everytime growth slow or joblessness rises. As a result,it will never tame inflation until it becomes a clawing,bellowing threat. Then, we will have to suffer a real recession.