in the equity markets, were infected by the insecurity and fear caused by the new coronavirus. On Monday, there was a real race, which started in Asia and spread all over the world. In Stockholm, sweden, fell the exchange rates prevailing at the opening of almost 7 per cent.
it was in a nosedive of the price of oil, as a consequence of the fact that Opecländerna does not come to an agreement with Russia on the reduction of the production process. Saudi arabia retaliated by lowering their prices, and the increase in the flow rate out of their own taps.
There was plenty of oil at the outset. The world economy is beginning to slow down prior to the coronavirus began to spread in China. As the newly emerging superpower " slowing down as the gravity of, and got it soon, the global effects of, for example, in a further reduction in the demand for oil. Fossil fuels are damaging the climate, but it is still a heavy economic component.
it is Clear that the companies involved in the production and export less, making less profit. If international supply chains are broken, is reinforced in the case.
the price war will receive the consequences. Russia refused to cut production in the economy and the government budget is highly dependent on oil and gas exports, however, are now receiving a slap from the other direction. The US's shale oil is more expensive to produce than Middle eastern oil, and the need for a higher price, in order to be successful.
nor did the kingdom of saudi Arabia is, however, osårbart, because the public finances are overstretched. When a similar price war broke out in 2014, it hit hard against the oil cartel Opec.
if you need a fix, even before the covid-19. Kursrekorden had met each other, because of the growth in the real sectors of the economy was quite good for a long time, and the low interest rate environment made equities an attractive option for investors. To those who have made a buck, lose a portion of the increase is in itself not a disaster.
the bad thing is that the börsraset to reflect the uncertainty that the virus creates. Psychology plays a good role to play. No one knows how long the flu lasts or how wide on the turn. It is clear that the companies involved in the production and export less, making less profit. If international supply chains are broken, is reinforced in the case.
as the largest economy in the world, was a problem child long before the infection arrived. The growth has been pitiful in the last two decades, the state's mountain of debt is immense, and the banks are full of bad loans on their books. And now, sitting in the northern part of the country, it is the most productive in the quarantine. In the rest of Europe is affected, inevitably, no matter how many people are infected, the country has been.
the Central bank's task is not to keep the stock prices up, but the oiling system. Unfortunately, the scope for monetary stimulus is very limited. The Federal Reserve lowered the discount rate by 0.5 percentage points, the european central bank will decide on Thursday, but it is a little bit under the zero. Other tools, such as to facilitate lending to firms in trouble need to be used.
the responsibility of the policy makers. Either interest rate cuts or konjunkturstimulanser kill the virus, but the side effects can be mitigated.
it have been bad to minimize risk. If students become ill, their parents will stay at home from work. Children who are spending the winter holidays in the north of Italy, is hardly likely to have been in the way to and from school.
it may require different forms of support. Companies that do not have their components are able to produce, but still have the fixed costs. Providers who are not able to go to work, it can also get into trouble with their bills.
The Swedish state coffers are well-stocked. There are ball bearings that can get the wheels to continue to roll.<