Stock market drop is bad news … and good news
By Nova Safo
The broad global stocks sell-off is reshuffling the deck of winners and losers. And while there are serious economic concerns that arise from the sell-off, there may also be at least some short-term benefits. The sell-off hit commodities hard, including nickel, aluminum and oil. Many experts say a slow down in Asia, especially in China, means less need for raw materials. “It certainly reduces the rate the treasury has to pay to borrow, and that may reduce the cost of both municipalities and the federal government,” says Karen Petrou, managing partner of Federal Financial Analytics. But Petrou cautions that if bond rates get too low, that could endanger insurance companies, pensions and people’s longterm savings.
The broad global stocks sell-off is reshuffling the deck of winners and losers. And while there are serious economic concerns that arise from the sell-off, there may also be at least some short-term benefits. The sell-off hit commodities hard, including nickel, aluminum and oil. Many experts say a slow down in Asia, especially in China, means less need for raw materials. “It certainly reduces the rate the treasury has to pay to borrow, and that may reduce the cost of both municipalities and the federal government,” says Karen Petrou, managing partner of Federal Financial Analytics. But Petrou cautions that if bond rates get too low, that could endanger insurance companies, pensions and people’s longterm savings.
http://www.marketplace.org/topics/economy/stock-market-drop-bad-news-and-good-news