This crisis, like Lehman, only more dangerous

life is Not more than 50 persons in Restaurants and Bars: The new rules announced by the Federal Council yesterday in the fight against the spread of the Corona

This crisis, like Lehman, only more dangerous

life is Not more than 50 persons in Restaurants and Bars: The new rules announced by the Federal Council yesterday in the fight against the spread of the Coronavirus, meets us in everyday life is becoming stronger.

This is probably one of the main differences to the great financial crisis of 2008. At that time, people were able to pull even during the turmoil still to the houses, without the fear of getting sick. Because the crisis came from the financial system and they are infected with their toxic assets – the consequences of fire hazardous speculation – first of all, the balance sheets of large and small banks. Even as the US investment Bank Lehman Brothers in September 2008, in the maelstrom of the crisis went down, it was clear what to do: if you wanted to prevent that the Virus spilled over to the real economy, had to help the banks.

The Coronavirus is but for a totally different kind of crisis. The Virus infected people – workers and consumers from all walks of life, from all professional groups and all regions, in short: the economy as a whole. A lot of what people normally do – eat at the Restaurant, a fashion show to organize, to Italy to buy a car – no longer do you now. Therefore, the Recession is increasing worldwide threat, and therefore, the big question is: What can be learned from the financial crisis of 2008 to learn? And what is very different today? What still goes and what not goes?

In the black October of 2008, were able to reassure governments that the people with a sentence that their Money is safe on the bench.

The not so easy today, because the flow of money is different than the course of a Virus. What then and even today to help liquidity assistance, short-time working allowances, increased public sector investment can be helped:. The hope is That bridge loans help the often small and medium-sized enterprises, the heavy revenue losses to get through these days and weeks. Because the teachings of ten years ago was: The economy contracted, although the labour market remained, however, thanks to the measures relatively stable.

The Coronavirus, however, may be even more insidious, as it were, the toxic securitisation papers to the banks. It all sectors of the economy are threatened equally, the number of fires that need to be deleted, is now incomparably larger than it was then. It is, if you will, from the Bar on the corner of the Coiffeur to the global group.

The American citizens now know: Significant help is expected from Trump to

in Addition, the political environment was at the time a different. Everyone Involved was quite clear, that you can't solve the problems against each other, but only through a joint international effort would. Already in mid-November 2008, only a few weeks after the collapse of Lehman brothers, met the heads of state and government of the 20 leading industrial and emerging countries in Washington, a package of measures to vote on. And another difference: In the White house a President who was not also just as a brilliant head resided at the time with George W. Bush. But at least he was willing to address the problems – without regard to personal survey of values, and without the invective of his political opponents.

for Almost twelve years later, on Wednesday of this week, sits To be the successor to Donald Trump in the Oval Office and tried in a televised address. Trump acts erratic, as he read the Text that goes before him on the Teleprompter, for the first Time. Instead of the Worries and hardships of the people, he explains, the US had to do it with a "Chinese", a "foreign Virus" to. It almost sounds like he's talking not about a disease, but a military opponent. An international action plan? Fail display. Instead, he announced, accidentally, that for 30 days no Goods from Europe into the United States delivered are likely to be. The appearance with Trump, the Situation will be calm, the device in two ways a disaster: In the world markets the prices break, once again, vigorously. And the people in the USA know since then: The thoughts of your President's circles, even in the biggest test of his previous term of office, not to the problems of the country, but still only to him – a significant help in the matter is not to be expected from this man. "The operator of my fitness studios has just sent you a more thorough, more detailed and more considered Plan for dealing with the Coronavirus around as the President of the United States," tweeted a pediatrician from Maine.

With interest rate cuts, the Virus does not scare away

To be sitting this time, ECB Chief Christine Lagarde in Frankfurt. The financial markets turn. It is Thursday, and all eyes are on the ECB, the supposedly omnipotent magician. It will follow Lagarde, Mario Draghi, in 2012, promised to save the Euro zone with all available means – "no matter what the cost it"? But the French analogy: "Non". Even worse is your answer to the question of how the Italian government could help their credit interest rates are shot in comparison to Germany in the amount of: "We are there to ensure these interest rate differences, level," explained Lagarde. In case you may be right – but it is not what want to hear the financial markets, it is the opposite of a confidence is a measure. The result: The loan rate for Italy to rise further.

Lagarde said her office: "I'll be different", you should not compare with its predecessor. Different Yes, but different? Lagarde sees it so: The governments of the EU member States, the EU as a Whole, are now required. And unlike a financial crisis, the Coronavirus is probably eh not with interest rate cuts to scare, especially since the ECB has fixed the benchmark interest rate already at zero percent. And: What should companies make in times of corona crisis, even with the cheap money?

as Long as the Virus spread across the globe and supply chains, tear apart, will invest, the economy is hardly on a larger scale. Also, the negative Deposit rate seems to be largely exhausted, especially because this measure is detrimental to the banks and the savers against the ECB applying. And so dam Lagarde and her colleagues were on Thursday, although liquidity injections for banks. The Bank rate remains unchanged. Draghi's Arsenal – but virtually empty fired.

the US Central Bank, the Fed, which has lowered in previous Downturns, the benchmark interest rate around four or five percentage points, not a lot of room. Their main guiding principle was already at the beginning of the crisis, with only one per cent. Also, the purchase of government bonds, and otherwise serves to push long-term interest rates down, this time will be far less effective than in the past, since the manoeuvring, long-term rates only just above the zero line.

all of This Trump is not from the custodians in his desperate search for a culprit for the emerging economy to reproach lull of inactivity. Fed Chairman Jerome Powell, however, has had no hand, to a car manufacturer components available, on the basis of blasted supply chains and the production bring it to a halt. He can stimulate neither the trade, nor to the Restaurants in the country, your sales to replace losses that you may suffer in the absence of guests, or because of government imposed closures.

Created: 14.03.2020, 07:28 PM

Updated Date: 14 March 2020, 07:03

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