whats happening in the stock markets?

Answer 1

Economies have been booming due to China's need for resources to feed their production capacity and the availability of cheap products.

There was a housing boom in the US that encouraged some lenders to give 'Sub-prime' mortgages to people whose credit rating would normally not qualify them. This was OK as long as the housing market remained buoyant but when housing markets in started to slow down the lender was faced with the possibility of foreclosing on property less that the loan value.

Many lenders then sold the high interest loans to other financial institutions at attractive rates. Perhaps because they were buying in bulk the buyers did not perform 'Due Diligence' in evaluation of the assets.

Now people are defaulting and leaving the institutional buyers in a short fall. The assets don't cover the liabilities. At the same time oil prices have been cyclic and this affects the investments some large companies have made in exploration activities.

If the U.S. or Europe lose their purchasing power it will directly affect China's resource requirement. The US Dollar is falling, China has billions of US$ in reserve. It would be smart for them to transfer to the Euro but if they do the Dollar would crumble, further affecting buying power for much of China's market.

So the buoyant world market is based on many tenuous threads which are subject to disturbance.

I'm not an economist but I've seen a few recessions and this looks like the trend to me.

Answer 2

For anybody reading The Economist, The Financial Times, Wall Street Journal etc., there is no mystery to what is happening.

There has been plenty of warnings about an impending correction due to the frothy credit markets. Now the experts hotly debate whether the correction is temporary or not.

Stay tuned to CNBC ... you can also get Reuters TV and Bloomberg via the Net.

Answer 3

It's a reaction to the overheated situation in the US where it just became too easy for people to get loans (mortgages) to buy real estate.
Now, banks and other financial institutions find that many people cannot pay back their loans.

Overheating - easy access to credit - also took place in the private equity market.

Answer 4

It's a slight correction, a little pull back.

The market was due for this.

Be patient and things will turn around soon!

Oil prices came down today, and it sparked a rally.

Hang tough!

Answer 5

Overheated.. Good time to watchlist some good stocks.

Answer 6

watch DJ closely and u will roughly knows
how singapore stocks will react.

If djia goes UP
sgx will rallies

read this: (last night djia)
http://www.marketwatch.com/news/story/asian-stocks-may-pace-rallies/story.aspx?guid=%7B33B0CA0B%2D900B%2D4993%2D97F1%2D1F452F95B0FF%7D&siteid=yhoof

Answer 7

It's going too high, time to drop.