Global Economic Crisis » Bankruptcy

New rules for Economic development

Stephen Cline — Wed, 30 Jun 2010 07:01:52 +0000

The President of United States called for the Congress to over haul the financial regulation of the country with new financial rules. The announcement was made by Obama on Radio and Internet and was aimed more specifically at the movers and shakers in the American government.
Obama openly blames the Wall Street for its inability to see the economic crisis and its inability to still not able to get itself out of this holes. He calls for a complete relay of the foundations of the American economy without which there would be no growth and prosperity. In the same context the congress is taking steps to protect the American people by boosting surveillance of the fresh economic threats if any to the markets and provide the authorities with some emergency powers to deal with these unseen threats. Obama is thankful to the legislation for taking actions to about 90 percent of what he proposed initially, which included limiting banks power to spend on Hedge funds and private equity funds so that banks do not get them self’s involved in risky trades for profits.
Whereas the republicans are constantly criticizing the Obama government for approving plans which favor spending. The plans that Obama has proposed are termed as recopies for disaster an calls for a better budget, clearer priorities and restraints on specific areas.

Global Recovery=American Spending

Stephen Cline — Wed, 23 Jun 2010 13:25:04 +0000

The global economy is once again being depended on when the Europeans have cut back on spending due to the weakening of the euro; the Chinese exports will have to be depended upon the consumption of the American population. The old habit of American customers spending huge on products will hope fully sustain the global recovery process. This can assure that the American people are the last resort for the shaking global economy.
Even after the silence of the Euro debt crisis and the mediocre increase in American jobs, the spending pattern of the millions of people in America still determines the global economy. The problem is if the American people can continue their spending ways or if their spending will stop and they will go into conservation mode and reduce their huge debts. If the former happens and they start using their plastic cards and increase the already huge debts, leading to the creation of another financial bubble. But if the latter step is taken by the American people, then the consumer goods production will increase and new jobs will be created leading to a positive growth.
But it looks like the creation of a huge bubble has already started taking place with people buying more which can be known from the increase in the U.S. trade deficit. This increase in Trade deficit is also because of the increase in the American dollar value when compared to the euro and the high costs that American goods will be sold at in the European markets.

The Economy Requires Charity

Stephen Cline — Wed, 23 Jun 2010 13:23:34 +0000

When a suggestion comes from the world’s wealthiest person, it has to make sense no matter what. The billionaire Warren Buffet has given almost 99 % of his personal wealth to charity and believes that the U.S. economy needs charity from individuals who have more that they need. He attributes his wealth to the “wildly capricious” nature of the U.S. Economy. The unpredictable nature of the U.S. economy has made many extremely wealth and thinks that by giving away this wealth, the U.S. economy can be brought back on track.
Warren Buffet and Microsoft co-founder Bill Gates are together trying to inspire other billionaires to pledge their dollars for the betterment of the American people. Buffet owes all his wealth to the market system that is prone to producing unfavorable and disoriented results which have served most well but for them to keep serving, the money from accumulated in one place needs to spread around. It is all a matter of Fate that the capricious economy follows to accumulate wealth in one place. Bill Gates and Warren Buffet have together started a drive known as The Giving Pledge to pursue other billionaires to support them in this initiative and give up at least half of their personal wealth to charity.

Demand Rises as Production Increases

Stephen Cline — Wed, 16 Jun 2010 04:41:08 +0000

The American factories have increased the levels of production to pre recession levels but the consumption and other sources of using these produced goods have reduced. The economists are eager that inflation is not increasing and U.S recovery cannot be lead by manufacturing alone.
Growth without inflation is something that the economists have not figured. The manufacturing levels are rising steadily but will have to stop churning out goods since the demand is not increasing. The manufacturers are recovering from the worst recession ever since 1930s and working overtime to replenish the empty inventories, growing demand overseas and upgrading equipment. The only way the federal bank can keep growth in sight is by holding the interest rates near zero.
Many manufactures have hired employees in the recent months and the average overtime has increased. There is a global demand for agricultural equipment and building construction equipment. The level of inflation dropping is the because of low fuel prices and reduced customer demand. The home construction market is sluggish at best and will be the hardest to recover with very few houses beginning construction. But the manufacturing font showing signs of recovery and banks trusting the manufacturing sector shows signs of economic improvement.

Trade Deficit Increases

Stephen Cline — Wed, 16 Jun 2010 04:38:30 +0000

The U.S. economy witnessed in the months of April its trade deficit widen due to fall in exports and also imports fell to a certain degree. The gap is now 0.6% to 40.3 million dollars. This is the highest since December 2008 and is a matter of concern for the policy makers.
But the good news came from shipping statistics which showed that shipments remained at their 2nd highest levels, this even after low demand for pharmaceuticals, generators and other food crops. The amount of exports and imports is predicted to grow in march but still its contributions to the growth of the economy will be minimal.
The U.S. stocks rose as good news spread in Asia about the economic recovery at the global level. The shares rally was seen in the Standard & poor index. But the worst part is the bad hiring spree is continuing by companies and till the hiring does not start, the economy is not going to better.
Many companies have yet to feel the impact of the European debt crisis and the effect of the increased gain of the dollar against the euro has been felt a little.

Budget cuts in Europe=Bad for America

Stephen Cline — Wed, 09 Jun 2010 05:00:10 +0000

The U.S. economy got another blow from the European crisis this time in the form of budget cuts. The British PM’s announcement of the extreme cut back in the form of government spending along with the German austerity plan detains, caused the U.S. economy to feel the shock waves.
This move is going to reduce the creation of new jobs in America and will have a negative effect on the already snailing U.S. economy. This will have a similar effect on the economy of the rest of the world. The British Prime Minister David Cameron expressed his concerns over the consequences of the debt crisis in Greece, Spain and other similar European economies. Already the European debt crisis has had a profound effect on U.S. and global stocks and plunging stocks are a common new since. This will lead to American and global customers to cut back on their spending in anticipation of another recession.
The German austerity plans will have an sudden impact on the imports and exports of the American economy since Germany being an export powerhouse. And after Germany, Francs is rumored to follow suit with its own austerity plans that will further effect American and global economies.

Debt causes Stress

Stephen Cline — Fri, 04 Jun 2010 12:44:21 +0000

A recent survey done by the GfK poll concluded that the debt is causing them stress. This survey’s 46% participants were stressed and 23% were at high stress levels. But 53% of the people were optimistic and felt no stress.
Thought the U.S. economy is seeing a u turn from the previous year’s condition when there were fewer jobs and bad recession along with shrinking economy, still the moods of the citizens are not being uplifted.
Many people don’t consider this as an improvement since 10% of the population is still unemployed and the pay slips of many employees have seen a reduction in value. Many people are on the verge of foreclosure and only few with a good credit are going to expect to get new loans. The positive side of this stress is that people are paying their debts much faster than any other time. The Federal Reserve reported that the people are cutting their debt at the fastest rate in more than 60 years.
The high repayment rate of debt is at the cost of reduction in customer spending and this again is causing slow growth and inturn is leading to U.S. economic drag, therefore leading to a positive growth.

Violent times for Markets

Stephen Cline — Fri, 28 May 2010 09:00:25 +0000

The stock markets the world over are taking a beating. They are on a roller coaster with constant variations in the stock’s value.
The American Dow Jones fell by about 300 points in one day, making it the biggest drop since two years in a single day. This is expected to continue with the debt crises looming over Europe and its inability to manage it along with the Korean War threat and the over-haul of the financial regulations in the United States have come to scare the already jittery investors of the 2008 crash.
These issues need to be resolved for the stock market to see the light of the day again and this cannot be done within a week. The signs given by the different economies are confusing for the investors and the fear that the crisis that halted Europe may spread to other countries is giving them nightmares. Despite the fact that reports suggest that the employment level in U.S. is steadily rising, the fears of investors is taking over optimism.
Many economists predict that this uncertainty will only slow down the growth but will not take the U.S. economy back into recession. But only time will tell if he markets will gain the trust of the investors back in time before it’s too late.

Mccotter Discussing Unnecessary Chrysler Bankruptcy

Stephen Cline — Tue, 16 Feb 2010 04:24:15 +0000

Rep. Thaddeus McCotter on local Michigan TV

Inside Story – General Motors Bankruptcy

Stephen Cline — Sun, 14 Feb 2010 04:26:00 +0000

Car giant General Motors (GM) has filed for bankruptcy protection, marking the biggest failure of an industrial company in US history.
A look at the factors that led to the biggest failure of an i…