Our economy is expected to grow negative 2% in Q4.
The Feds announced the they will invest $400 billion to drive down interest rates, making home and business loans cheaper to revive the economy.
Today, within minutes of the opening bell, our stock market plunged 300 points. With fluctuations, almost every risk asset is down considerably, and it’s worldwide. The dollar and volatility are up.
Moodys downgraded Bank of America Corp, Citigroup, Inc, and Wells Fargo & Co. Barney Frank is giving credit to the Dodd-Frank Financial Bill which separates the banks, thus, hopefully avoiding a domino effect if one big bank fails. Moodys gave the lower rating saying the U.S. government is getting less comfortable with bailing out large troubled lenders. The only problem with this is that they are too big to fail. The results of these banks failing will be disastrous.
Our President submitted a crazy jobs bill that has $8 1 billion in tax cuts and 1.5 trillion in tax increases, which includes taxes on everyone. My favorite is the $200 “fee” for Veterans to join Medicare. We don’t have a spending bill and we went two years without passing budgets in Congress because the Democrats were worried about not being re-elected. The government is dysfunctional at the moment.
We are hitting the world debt ceiling and, QE1 and QE2, while possibly saving us from hitting the debt wall, devalued the dollar and caused inflation.
Greece is in danger of default. They have a Socialist economy that relies on heavy taxation so the people reacted by not paying taxes. Italy was downgraded by the S&P. And here, in the United States, where we are bankrupt and borrow 60 cents on every dollar, are bailing out the European Socialist PIGS (Portugal, Ireland, Greece, Spain and now Italy).
Confidence worldwide is down understandably.
We might be at the beginnings of a recession(depression).