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Cablegate: Media Reaction: Global Economy: Sub-Prime Mortgage Crisis

Published: Tue 15 Jul 2008 11:53 AM
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TAGS: KMDR OPRC OIIP ETRD BR
SUBJECT: MEDIA REACTION: GLOBAL ECONOMY: SUB-PRIME MORTGAGE CRISIS
1. Another Package
Editorial in liberal Folha de S. Paulo (7/15) says: "Frightened by
the galloping economic crisis, the Bush administration announced
another billion dollar package to help the financial crisis. ...With
another billion dollar contribution, the Bush government and the Fed
are trying to stem the contagious flow of the crisis. Judging by
the pessimistic reaction of the markets yesterday, other
considerable battles will come."
2. The Turbulence Continues
Editorial in center-right O Estado de S. Paulo (7/15) comments:
"Pressured by the mortgage crisis, the Fed slows down the fight
against inflation. ... The crisis was, in great part, facilitated by
the excess of liquidity permitted by the Fed, in its long process of
reducing interest rates. With this policy, the American Central Bank
allowed prices to increase. ...the Fed started to export inflation
to the rest of the world and became a threat to Latin America. In
fact, the fight against inflation will be much more difficult
without the participation of the world's most important central
bank. But, will the Fed be prepared soon to initiate a new phase of
higher interest rates? Unfortunately, no other central bank can keep
waiting for an answer. It is necessary to act, and in Brazil, the
effort for the adjustment has already started."
Story
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