George Soros in his recent interview with the Estonia media said that the global credit crisis has bottomed and the financial systems are on the self healing stage.
George Soros said that with the filing for bankruptcy of Lehman Brothers, the financial system that has stopped functioning before that has started to work again. But he also mentioned that the unemployment, the survival of the companies and other financial problems arising from the crisis will still continue to happen.
Regarding this crisis, George Soros mentioned that this is the biggest crisis he has ever seen in his life time. He said that he has never seen such a crisis before and he will not see another such crisis again.
To those points by George Soros, secretary general from the Academy of Social Sciences International Financial Research Center 张明 said in an interview with the Chinese media that he basically agrees with what George Soros have said. 张明 thinks that although the financial market will still have some pitfalls, it needs time to stabalize but the big fluctuations in September period will not occur again. After the big fluctuations in September, with the mesures taken by various countries, the banking credit system is starting to show signs of recovery, the banks self healing process can be seen. But 张明 also points out that the current crisis effect on the real economy will need a longer time to recover. The recovery process will take at least 3 to 5 years. The impact to the real economy has just only begun.
Market analysts said that under the current panic period where people are selling their stocks, George Soros and another investing master Warren Buffett have been buying up big companies stocks around the world. Their buy ups stretches from the US to Australia. They are looking for seeds in the market which can provide long term returns. Recently Buffett spent 5 billion USD investing in Goldman Sachs and invested another 3 billion USD in GE. And in last month, Buffett in an article in The New York Times said that he has started to buy US stocks and suggests investors to start investing in the US stock market. George Soros has also started buying 5% of Australia's Sphere Investments. Sphere Investments is preparing to develope a metal mining project worth billions of USD in Mauritania.
Rebound of German Investor Confidence Index
The ZEW Center for European Economic Research in Mannheim announced yesterday the November 2008 Germany's Investor Confidence Index. The data shows that becuase of the Europe Central Bank action in reducing the interest rates and the determination of the German government to stimulate the economy, Germany's Investor Confidence Index shown a rebound from October's -63 to November's -53.5. Analysts expectation were -63.
The German government this month started implementing its 500 billion Euros economic stimulus plan. The German DAX started to rebound last month from its 3 years low. At the same time, the Euro inter-bank lending rates has dropped the lowest point since February.
Frankfurt Commerzbank AG economist Ralph Solveen thinks that investor confidence has reached a turning point. But this will not change the gloomy situation for Germany's economy in the coming few months because the Investor Confidence Index historical average value is -27.1 and currently it has been negative for 16 months consecutively. Also, a gauge measuring investors' assessment of the current situation fell to minus 50.4 from minus 35.9 in October. The Euro November ZEW economic index is -54, expectation was -60.5.
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