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Posts Tagged ‘economy’

Global Stock Markets Drop Again on Economy Fears

August 20, 2011 Comments off

voanews

Stock markets fell across the globe on Friday, as investors showed new concern about the struggling U.S. economy and the stability of the European banking system.

The three major U.S. stock indexes — the Dow Jones Industrial Average, S&P 500 and NASDAQ — all dropped more than one percent Friday, following their decline of four to five percent on Thursday.

Asian stock indexes dropped sharply Friday, and European markets retreated as well, although not as much as on Thursday.

Analysts said that fear had overtaken stock trading, with many investors worried that officials in Europe and the U.S. will not be able to solve vexing economic and government financing issues.

In Europe, the concern is that banks are not strong enough to handle the continent’s debt problem sweeping through its financially troubled governments. Investors are also worried that Read more…

10 Signs That Economic Riots And Civil Unrest Inside The United States Are Now More Likely Than Ever

August 16, 2011 Comments off

theeconomiccollapseblog

You should let the video footage of the wild violence that just took place in London burn into your memory because the same things are going to be happening all over the United States as the economy continues to crumble.  We have raised an entire generation of young people with an “entitlement mentality”, but now the economy is producing very few good jobs that will actually enable our young people to work for what they feel they are entitled to.  If you are under 30 in America today, things look really bleak.  The vast majority of the good jobs are held by people that are older, and they aren’t about to give them up if they can help it.  It is easy for the rest of us to tell young Americans to “take whatever they can”, but the reality is that there is intense competition for even the most basic jobs.  For instance, McDonald’s recently held a “National Hiring Day” during which a million Americans applied for jobs.  Only 6.2% of the applicants were hired.  In the old days you could Read more…

Anarchy and Austerity: Why London Won’t Be the Last City to Burn

August 11, 2011 Comments off

theatlantic

The Great Recession gave birth to a lost generation across the world, where youth unemployment rates stretch into the 20s, 30s and even 40s. Those millions have responded with violence.

615 anarchy reuters.png

REUTERS

The riots and fires consuming London are a story about senseless violence and crime. They are also a story about urban politics, race relations, education inequality, and British culture and society. But underneath all of that, they are part of an economic story that is universal.

For the last year, Great Britain has embraced austerity to a degree that would make some American conservatives blush. The purpose of shrinking government was to reduce debt. But the effect has been to kill the economy. With the UK tottering on the razor’s edge of recession, consumer confidence is at a record low, unemployment is rising, and even the Read more…

Second U.S. recession could be worse than the first

August 9, 2011 1 comment

rawstory

A second recession, what many are calling the double-dip recession, could be on its way, economists warn. And should it come, it will probably be even more devastating than the previous period of economic woe.

“It would be disastrous if we entered into a recession at this stage, given that we haven’t yet made up for the last recession,” Conrad DeQuadros, senior economist at RDQ Economics, told the New York Times.

The Standard and Poor’s downgrade of the U.S.’s credit rating bodes ill for the world’s financial markets as well as the domestic market.

President Barack Obama, once the debt deal with Congress to avoid a debt default was struck, announced a pivot to focus on jobs.

“I’ll continue also to fight for what the American people care most about: new jobs, higher wages and faster economic growth,” Obama said in a statement to press after the debt deal was passed last week.

While the working age population has grown 3 percent in the past four years, the economy has 5 percent fewer jobs — or 6.8 million less than four years ago. Unemployment stands at 9.1 percent.

Economists don’t think another stimulus package will do the trick, either.

“There are only so many times the Fed can pull this same rabbit out of its hat,” Torsten Slok, the chief international economist at Deutsche Bank, told the Times.

US stocks plunge, Dow falls more than 500 points

August 5, 2011 1 comment

rawstory

The Dow Jones Industrial Average plunged 4.3 percent Thursday, its worst one-day drop in more than two years, as global markets melted down over fears of another world economic downturn.

The Dow was down 512.76 points to 11,383.68; the broader S&P 500 lost 4.8 percent to 1,200.07, while the tech-heavy NASDAQ Composite plunged 5.1 percent to 2,556.39.

More turmoil over sovereign debt problems in Europe and feeble US economic data are stoking “fear that the economy is heading for a double-dip recession,” said Peter Cardillo of Rockwell Global Capital.

“The market is pricing that in,” he said.

Markets worldwide were on edge over fiscal weakness in Italy and Spain and the eurozone’s ability to contain more crisis, as the two countries’ borrowing costs surged in recent days.

Meanwhile the US Labor Department reported that weekly claims for unemployment benefits remained at a high 400,000 last week, as business and government layoffs persisted while new job creation remained sluggish.

All of the Dow’s 30 blue-chip stocks were hit by the sell-off, but losses were most pronounced in the basic materials sectors, energy and financial companies.

China Boldly Goes (Again) Where Moody’s Has Never Gone Before, Downgrades US From A+ To A, Outlook Negative

August 3, 2011 Comments off

zerohedge.com

As was predicted last week, China’s rating agency Dagong, unlike its worthless western counterparts, has come through on its threat to downgrade the US in the event a subpar debt ceiling deal was hammered out. As Xinhua reports, ‘Dagong Global Credit Rating Co. said Wednesday it has cut the credit rating of the United States from A+ to A with a negative outlook after the U.S. federal government announced that the country’s debt limit would be increased.” Confirming that not being branded a NRSRO is the only thing that allows a rater to still think straight (and not in terms of lost client revenue if one goes ahead and tells the truth), Dagong’s decision was spot on: “The decision to lift the debt ceiling will not change the fact that the U.S. national debt growth has outpaced that of its overall economy and fiscal revenue, which will lead to a decline in its debt-paying ability, said Dagong Global in a statement.” So while Moody’s, which is now certified as the Read more…

The Charts The Government Doesn’t Want You To See

August 2, 2011 Comments off

wealthcycles

A healthy skepticism of government statistics is one of those self-preservation mechanisms that keeps us from hurting ourselves. Misleading official statistics too often lead people and businesses to act contrary to their own best interests and plan for scenarios that never happen.

We have always questioned what the government gives us; it’s not only a self-preservation mechanism, it’s part of our patriotic duty in the democratic system.

Take these two charts, presented by Robin Harding over at the Financial Times Money Supply blog. One is of the U.S.’s real GDP in dollars, and one is of the percent change of real GDP. The green bars are the government’s GDP estimates in June 2010, the blue are estimates from a year later in June 2011, and the red are the most recent estimates, from July 29, 2011.

What the charts are screaming is that the government has a consistent tendency to overinflate GDP numbers, and that the United States never really emerged from recession.

Take the second quarter of 2009—which has been continuously revised lower to the tune of a quarter trillion dollars. That’s enough to pay the annual median income ($52,000) for 4.8 million U.S. families—no small error. The percentage change chart shows something starker—a consistent fall of GDP since early 2010

Read more…

Vladimir Putin: U.S. global economy ‘parasite’

August 2, 2011 Comments off

rian

Vladimir Putin: U.S. global economy ‘parasite’The U.S. spends beyond its means and “lives like a parasite off the global economy,” Russian Prime Minister Vladimir Putin said on Monday, 1 August 2011.

U.S. President Barack Obama said earlier in the day he had reached a deal with Republican and Democratic leaders to raise the nation’s debt ceiling by at least $2.1 trillion and avoid a default.

The proposed legislation is expected to be put to a vote in Congress later on Monday.

Speaking at a Russian political youth camp, Putin said the U.S. exists to build up its debt by relying on credit.

It lives beyond its means, taxing the global economy with its problems and living like a parasite off the global economy and the monopoly of the dollar,” he said.

At the same time, the Russian head of government admitted that in the present day situation the United States took a “balanced” decision as a possible default would also have affected the global economy, which would have been “no good at all,” he concluded.

What happens if the U.S. defaults?

July 28, 2011 Comments off

cbc

Blank U.S. Treasury cheques are run through a printer at the U.S. Treasury printing facility July 18 in Philadelphia.The first payments that stand to be affected if the U.S. government defaults on Aug. 2 would be some $23 billion US in Social Security benefit cheques. Blank U.S. Treasury cheques are run through a printer at the U.S. Treasury printing facility July 18 in Philadelphia.The first payments that stand to be affected if the U.S. government defaults on Aug. 2 would be some $23 billion US in Social Security benefit cheques. (William Thomas Cain/Getty)

How a default would unfold immediately appears relatively straightforward. It’s the reaction that no one can predict, because it’s never happened before.

The first move will be made by the U.S. Federal Reserve. The Fed is the Treasury Department’s bank, handling government cheques and lending to banks which borrow using U.S. Treasury debt as collateral.

One day — the U.S. government has estimated it will be Aug. 2 — the Fed will serve notice on the government that its account at the Fed will be in overdraft by the end of the day, in violation of the Federal Reserve Act.

On Aug. 3, some Read more…

Iran Opens Oil Bourse – Harbinger of Trouble for New York and London?

July 21, 2011 Comments off

Oil Price

The last three years of global recession have dealt a major blow to American capitalist ideas trumpeted throughout the world on the value of “free markets.” Wall St has been revealed as a form of casino economy, with the bankster insiders gambling with other people’s, and eventually, the government’s money in the form of bailouts. As the Republicans in Congress, scenting victory in the 2012 presidential elections, hold a gun to the Obama administration’s head and rating agencies consider downgrading U.S. government bonds in light of Washington’s possible defaulting, many ideas around the world that previously seemed implausible because of the dominance of the U.S. economy are garnering renewed interest.

Not surprisingly, many of these concepts originate in countries not enamored with Washington’s influence, perhaps none so more than “Axis of Evil” charter member Iran, which has seen its economy Read more…