Are There Any Advantages of the Stock Market Fall?

By: Andrea Domini

Yesterday all the shares of the leading companies fell down at the stock markets from East to West. The fall started at the Asian markets – in Japan, China, Singapore and some others. Some European countries also experienced a considerable fall of their indices. Russian stock brokers recorded the indices fall of the top systems like RTS and the Moscow Central Stock exchange.
All that is caused by the US economic crisis that threatens to undermine the global economy as well.

Trying to stabilize the situation President Bush suggested reducing the taxes to prevent a prolonged crisis in the USA. The calculations of the authorities are simple – the tax relief must trigger the rise of the consumer activity. The US government assures the world that there are no reasons for worry as they will do their best to prevent the economic recession.
Meanwhile the world's stock markets do not believe that and the main indices are swooping down. Moreover, in spite of the President's assurance, the US building volume has already reduced by 14 %. The financial analysts admit that the US economy has not survived such a fall since the middle of the last century.

It means that, like it or not, quite soon we may face a deep economic crisis in the USA that will inevitable entail the financial collapse of the global economy.

Experienced economists admit that Americans have been living beyond their means for a long time and this cannot last forever. Sooner or later, this will have serious consequences both for the country's economy and the common citizens.

The mortgage crisis in the USA is already one of the results of the consumers' loans which they are in no condition to pay off. What will be with this industry if the rates will rise? Will then credit users be able to cope with their mortgage being insolvent?

It's worth mentioning that a lot of creditors suffer losses on bad mortgage loans given to people with bad credit. After changing the refinance rate, banks had to sell the borrowers' property out. As a result, real estate is falling in price.

The losses have exhausted the banks' funds and they are forced to look for additional sources. The economic slowdown brings credit cards as a source of income into question.
Still, banks and financial institutions are the regulators of the economy, and they will probably give loans to businesses and other consumers to recover it. As a result, the Federal Reserve is going to lower the Fed Rate by 0.75%.

As for the common credit users, they can hope for lower rates though they will be compensated by higher commissions. In the nearest future we can expect the Federal Rate to enable US consumers to take more loans. Thus, you have all the chances to take advantage of the opportunity. It's sensible to apply for a plastic with low APR and fees. Think of applying for a credit card now, if you credit rating is higher than average.

About the Author:
Andrea Domini works for Credit-card-analyzer.com. She is famous in financial circles for her articles and news concerning bad credit card deals, however she is a versatile person and she majors in all credit card deals.