If you are sitting in your office or at home thinking: "What am I going to do next? The economy is getting worse by the day," you are not alone. For the first time in a generation real fear has gripped the nation. This was reflected in the action of the markets since the beginning of the month.
Global markets are at multiyear lows, as is the U.S. Dow Jones Industrial average. The S&P index sank below the psychological 800 level.
This past week, attention was focused on central and eastern Europe, where the recession is gaining momentum on the downside. Now add to this mix the banking crisis. Investors are fearing a lack of solvency among the big international banks. Credit default swaps are rising, with Korea hitting a three-month high. Then you have the crisis in Japan, where GDP is falling by an annualized rate of 12.7% in the past three months.
The U.S. labor market is in a free fall, with unemployment at a record high levels, while the purchasing manager's index fell to its lowest level on record.
Stop! Enough, you say.
Just to end this conversation, gold traded above $1,000 per ounce and U.S. government bonds rose in a flight to safety.
Do you believe this is the bottom?
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Reader Comments (Page 1 of 1)
2-22-2009 @ 3:52PM
blogs11111 said...
No I don't think it's the bottom because the global economies are spiraling down faster than ours and ours is going pretty fast. I think since China is such a big exporter they run the danger of falling into a depression. Actually I think Asia in general and India will fall into a depression as Europe and America fall into a deep and long recession or possibly a depression. This is global and the central bankers and teasuries don't have enough money to cover the debts and deflation of assets. The only way they can help this is by changing confidence but I think most people will see through media's pollyanna assesments. Things are spiraling down fast, the further they go down they harder it will be to reverse it. I think it's too late to change any of it, maybe they could soften the blow but the only thing that will eventually turn things around are time and innovation by the people, not by the governments.
2-23-2009 @ 7:22PM
craig said...
I think we haven't reached the bottom yet, if i'm right then one of the eastern european countries may well default which could lead to a default in ireland,spain or italy.
China relies heavily on exported goods but it has been surprisingly resilient with GDP still at over 6% and vast reserves with which to spur domestic demand should it need to without any borrowing.
I think by the end we are gonna see asian countries becoming more powerful (relative to more westernised economies) due to having less debt weighing them down.