Recession Being Felt Worldwide

from Guajardo: With the global market going into a recession the G8 is keeping a close eye on the increased value of yen which threatens to shake global stability. The dollar is rising against all currencies but yen which has a 12% increase to the dollar. There are thoughts of maybe a coordinated effort from both countries on the economy to alleviate this somehow. Japan's Prime Minister Taro Aso said that a stimulus package of 27 trillion yen- $275 billion- will be distributed to expand credits for small businesses and give back to families. Reactions to this in Japan is mixed. It's debatable whether this package will help boost domestic demand. Mitsubishi UFJ Financial Group, Japan’s biggest bank, said it would raise up to $10.6 billion by issuing new shares, the latest sign that diving stocks are likely to shred profits at Japanese lenders.

The thought of the second largest economy going into a recession has countries cautious and in need for a plan of action. Already countries are making decisions and releasing stimulus packages and rescue plans to encourage institutions to lend more in order to help the economy. The Swedish Parliament approved a $200 billion rescue package. A large Swedish bank requested a credit line from the central bank and the largest Swedish bank, Swedbank, announced a new share issue to raise more capital. The Federal Reserve announced it will be supplying New Zealand with $15 billion. IMF is bailing out Hungary and Ukraine.These actions are important to the stability of the global market in the long run, but the rate that it is occurring is creating panic. David Shairp, global strategist at JPMorgan Asset Management calls it “the new apex of the crisis.”