The 2008 bear market has seen the federal government taking steps to stop further recession. The U.S. Federal Government created a variety of measures like tax cuts, tax rebates and enhancing unemployment benefits. Bears and bulls are the elements or forces, which drive the stock market indexes.
Bears are referred to as sellers and the bulls are referred to as the buyers. Bear market is said to prevail when the stock market manifests a downward trend for a bit too long a duration. To be determined a bear market, the duration has to be for at least 60 days or 2 months and the percentage drop of 20% or more on the index.
The real estate market has long been subjected to a bear market and other sectors of the economy have also been impacted. According to the S&P’s 500 index, there was a decrease by 9% year to date. The market has reached a point, which has not been existed since the year 2006. This decrease indicates a 15% decline in value.
Also feeling the effects are The Dow Jones Index and NASDAQ. The main cause of concern is that even though enough efforts are being made to stop further decline of the economy, nothing seems to be working.
The Federal government contemplated putting a “stimulus package” in to the economy so that there would be no dearth of liquidity.
Some attempts to relive the economic pressure have included:
Providing unemployment benefits
Tax breaks for the business people
The federal government had decided, as of January, 2008,to reduce rates by 50 base points.
The government tried all these measures but the drop is not being arrested. Needless to say, these events are not going down well with the investors of the stock market either.