Markets in USA & Canada

摘要

In the April issue of Steel Markets Monthly we highlighted the threats from troubles in the house-building sector - cutting steel demand directly and indirectly (by reducing demand for durables) possible financial havoc. It has taken a few months, but these real world troubles have spread via the sub-prime lending sector to the financial world. As usual, reaction delayed has been reaction exacerbated; after being over-eager to make risky loans banks suddenly turned reluctant to lend at all. The resulting drying up of liquidity caused the panic sweeping through world stock exchanges. Central banks' swift provision of an emergency stream of liquidity and the Federal Reserve's cut in the discount rate helped towards calming markets, but the ripples are still spreading and there are bound to be casualties. A few failures are necessary, in the long term interests of the proper functioning world markets, pour encourager les autres; profligate lenders and feckless borrowers should not be able to depend on rescue by government or overly generous banks, but there is always a danger that innocents will suffer along with the guilty.