Archive for the ‘meltdown confidence’ Category

U.S. Must Confront Possibility of Long, Deep Recession

October 16, 2008

By ADAM GELLER, AP National Writer 

NEW YORK – The U.S. has not endured a deep and prolonged recession in more than a quarter century — enough time for many Americans to forget what one feels like.

But unlike the last two relatively short recessions, this one could be much longer and more severe, potentially bringing with it anxiety and job losses not seen in many years.

“In thinking about recessions, people will naturally think back to the last couple” in the early 1990s and in 2001, said Paul Ashworth, senior U.S. economist at Capital Economics in Toronto. “What they should be looking back at is further.”

That requires dredging up memories of the economic slides in the 1970s, when an Arab oil embargo starved the nation of energy, and the early 1980s, when unemployment and inflation soared.

The last recession — coinciding with the collapse of the tech stock bubble and the terrorist attacks of 2001 — lasted just eight months. It was known more for the slow “jobless” recovery that followed than for the depth of the downturn.

Many economists agree that the nation won’t be so fortunate this time.

“I don’t think we can escape damage to the real economy,” former Federal Reserve Chairman Paul Volcker said this week in Singapore. “I think we almost inevitably face a considerable recession.”

The Fed’s current chairman, Ben Bernanke, delivered a more measured, but similarly grave assessment to economists, saying the recent financial turmoil “may well lengthen the period of weak economic performance and further increase the risks to growth.”

The signs of stress are starting to show: The U.S. has lost 760,000 jobs since late last year, and retail sales in September plunged 1.2 percent, the largest drop in three years.

Every recession is driven by its own dynamic and psychology. The current slump started with the collapse in the housing market and got worse with sharp restrictions on credit that pressured consumer spending and businesses.

That is a different environment from 1973, when an oil crisis was the culprit, squeezing U.S. businesses and consumers. In the early 1980s, raging inflation and high interest rates took their toll.

Both periods saw millions of Americans out of work. In 1975, the unemployment rate peaked at 9 percent. In 1982, it jumped to 10.8 percent.

Read the rest:
http://news.yahoo.com/s/ap/20
081015/ap_on_bi_ge/meltdown_
recession;_ylt=AtgNO7MiepobjPABCppxQ_qs0NUE

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Stock Market Dives 733 or 8% on Fears of U.S. Recession; Second Biggest Drop Ever

October 15, 2008

I’m no economist but apparently I am smarter than the current Fed Chairman Ben Bernanke and President Bush.  They still have not acknowledged the recession we are in now….even after former fed Charman paul Volcker said we were in a recession yesterday.

DA!

We can all read and think and I stated categorically last March 8, 2008, that the United States was in a recession.  I made this statement after mulling over the facts starting around September 2007.  Turns out I was fully seven months ahead of former Fed Charman Paul Volcker who made the declaration yesterday.

Go figure!

By Matt Egan
Fox Business

Fears the U.S. will sink into a recession slammed Wall Street on Wednesday, sending the Dow plunging 700 points lower and below the 9000 threshold.

An ugly report on retail sales served as a wake-up call for the markets, reminding Wall Street that even as the ailing credit markets appear to have improved, the economy is still in a precarious state. 

Today’s Market

According to preliminary calculations, the Dow Jones Industrial Average lost 758.80 points, or 8.15%, to 8552.03, the broader S&P 500 dropped 92.11 points, or 9.23%, to 905.90 and the Nasdaq Composite lost 150.68 points, or 8.47%, to 1628.33. The consumer-friendly FOX 50 fell 64.93 points, or 8.68%, to 683.27.

The economic pessimism kept the pressure on the markets on Wednesday as the major indexes ended at session lows, never even peeking into positive territory. The selloff add to modest losses from Tuesday, combining to erase more than half Monday’s record 936-point surge on the Dow. 

“There’s still a little bit of gloom and doom in front of us,” said Michael Mainwald, head trader at LEK Securities. “Until some of these government-sponsored rescue plans work their way into the [financial] system, we’re going to have these 3% to 5% moves either way.”

Read the rest:
http://www.foxbusiness.com/story/markets/futures
-decline-earnings-return-prominance/

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U.S. Secretary of Treasury Henry Paulson (R) listens as Federal ... 
Above U.S. Secretary of Treasury Henry Paulson (R) listens as Federal Reserve Chairman Ben Bernanke (L) talks about financial markets, fear of recession and the Market Stability Initiative in the Cash Room of the Treasury Department in Washington, October 14, 2008.
REUTERS/Larry Downing (UNITED STATES)

I’m no economist but I can read and think and I stated categorically last March 8, 2008, that the United States was in a recession.  I made this statement after mulling over the facts starting around September 2007.  Turns out I was fully seven months ahead of former Fed Charman Paul Volcker who made the brilliant deduction today, October 14, 2008, that the U.S. was in a recession.  The current Fed Chairman Ben Bernanke and President Bush have still not acknowledged the recession we are in now.

Read the rest:
https://johnibii.wordpress.com:80/2008/10/14/obama-
really-believes-in-wealth-redistribution-money-goes-
from-those-who-earned-to-those-who-didnt/

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By TIM PARADIS, AP Business Writer

NEW YORK – Investors agonizing over a faltering economy sent the stock market plunging all over again Wednesday after two disheartening reports convinced Wall Street that a recession, if not already here, is inevitable. The market’s despair — fed by a stream of disheartening economic data — propelled the Dow Jones industrials down 733 points to their second-largest point loss ever, and the major indexes all lost at least 7 percent.

Traders work on the floor of the New York Stock Exchange, October ... 
Traders work on the floor of the New York Stock Exchange, October 15, 2008. U.S. stocks slid at the open on Wednesday as investors worried that efforts to ease the credit crisis would not avert a recession, overshadowing solid profits from Coca-Cola Co , a bellwether for consumer spending.REUTERS/Brendan McDermid (UNITED STATES)

The slide meant that the Dow, which lost 76 points on Tuesday, has given back all but 126 points of its record 936-point gain of Monday, which came on optimism about the banking system in response to the government’s plans to invest up to $250 billion in financial institutions.

Wednesday’s selloff began after the government’s report that retail sales plunged in September by 1.2 percent — almost double the 0.7 percent drop analysts expected — made it clear that consumers are reluctant to spend amid a shaky economy and a punishing stock market.

The Commerce Department report was sobering because consumer spending accounts for more than two-thirds of U.S. economic activity. The reading came as Wall Street was refocusing its attention on the faltering economy following stepped up government efforts to revive the stagnant lending markets.

Then, during the afternoon, the release of the Beige Book, the assessment of business conditions from the Federal Reserve, added to investors’ angst….

Read the rest:
http://news.yahoo.com/s/ap/20081015/ap_on_bi_st_ma_re/
wall_street;_ylt=AigXgb9565eUtw4z5BSaNZys0NUE