Economic Crises

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Economic Crises Powered By Docstoc
					Presented by Daniel Toriola
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Economic Crises By Jason P. Jones

The steady stream of positive economic news may indicate that the US economic crisis might be nearing the end. Less than three weeks ago we witnessed the stock market plummeting to very low levels, the unemployment rate surging to it’s highest level in recent years and the housing industry hemorrhaging even more. The Dow Jones industrial index is at its lowest just hovering at 6,926 points. The unemployment rate has reached a 26 year high, pegging at 8.1 percent for the month of February. The unemployment rate is even expected to reach 10 percent by the end of 2009. On the housing front, First American CoreLogic, has estimated "about 8.31 million properties had negative equity at the end of 2008". These negative trends could send the foreclosure rate higher if homeowners walk away from their homes. But now, everything seems to be reversing, if the current news and trends are to be believed, the economy might be on the recovery stage. It all started with the Citigroup's announcement that it no longer needed government money to stay afloat and since January 2009 has been profitable. The day Citigroup announced they made a substantial profit the first two months of 2009 the Dow Jones Industrial average jumped to 7,198 points and rallied further throughout the week. This good news was also followed by the announcement of the Commerce Department that the home and apartment construction has risen by a hefty 22.2 percent in February compared to the month of January this year 2009. This is further supported by the increase in house sales in specific area’s of the U.S. First American CoreLogic, reported that in "Fairfield sales jumped 226% in the fourth quarter of last year compared to the same quarter in 2007 and home prices during that period fell 19% to $179,500". The increase in house sales has been attributed to the ultra cheap prices and the now very low mortgage rates. A recent survey showed that the "30-year fixed-rate mortgage averaged 5.16 percent for the week ending February 12, 2009". This is a substantial decrease to 2008's 5.72 percent. Source: Mortgage Rates The overwhelming optimism in the state of the economy is further supported by the declaration of the

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Presented by Daniel Toriola
Treasury Department's Timothy Geithner to help banks clean up bad assets that are mortgage related. The amount of bad mortgage securities the government will be absorbing could amount to as much as $1 trillion. The government won't be doing this alone as the private sector will be involved. The majority of the money will come from the government's $787 billion stimulus package. The sudden confidence in the economy is further strengthened by the new that the U.S. savings rate has increase substantially. The savings rate is placed 3.6%, up from 2.8% in November 2008. The high saving rate indicates that this stock rally is more than just a bear run as most experts believe. It seems it can be sustained as Americans becomes more savings conscious. This announcement further pushed the stock market upward. The Dow Jones Industrial average is now at 7,775 which is its highest finish since February 13 of this year. This upbeat mode has affected other country's stock markets and forced them up too. In Europe Germany and France's indexes rose mildly by 0.4 percent each. While Asia is more enthusiastic as Japan and Hong Kong's stock market piled a whooping 20 percent for the last two weeks. Yes, it seems were back in business. Compare the Best CD Rates (Certificate of Deposit Rates), Online Savings Accounts, Credit Cards and Mortgage Rates , and Bank reviews at

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Presented by Daniel Toriola
Tarnishing The US Image- The Economic Crises By Joseph Shalaby

The economic crises that the country is undergoing one after the other are tarnishing the US image with their negative presence. The scope of the economic crises has repeatedly been compared to the financial troubles the United States experienced in the late 1920s. Suggestions have even been made that the looming recession is actually going to transform into a full fledged depression with devastating effects. How can any country present an untarnished image when the economic strength has dwindled to that of an embarrassing status? Internally, the people of the country are split on what they believe the true role of the US government is as well as on the merits of bailing out the “haves” while the “have nots” get nothing. This is clearly evidenced by the furor of constituents who lashed out against local representatives and demanded that they vote “no” against the stimulus package. Why should those who have squandered the money of others be given even more to squander? The current crises only serve to point outcertain flaws in the manner that the US economy functions. Economic growth in America is fostered by the crazy idea that only more spending will create a strong economy or improve the strength of a failing economy. This kind of mentality tarnishes the image of the US in the eyes of many, starting with the US taxpayers who opposed the stimulus package on the grounds that throwing good money after bad is never a good idea. Or perhaps it is the idea that corporations that have proven themselves as foolhardy, ambitious, irresponsible, or any one of a number of other non-flattering words can simply look to the US government to bail them out and then go have a grand party to celebrate. Of course, as with any government or country, certain flaws are going to exist and eventually become exposed to the world. This is expected. However, when others question the entire basis upon which the US economy now operates, the US image is going to take a huge hit. Gone are the principles that spurred such a fantastic country to emerge and prosper. In place of calculated growth backed by financial savings and realistic expectations, something new and different came into being. The US economy evolved into a big conglomerate with one sole purpose in mind- to make more and more money without actually having any money touch hands. Speculation, artificial ups and downs generated by catastrophic events or even rumors, and the government’s flailing attempt to solve a manmade disaster with a government-orchestrated solution that does not have the backing of many US citizens can only lead to a once impressive image becoming sadly tarnished with egg on its face. The manner in which the US government handles each economic crisis should make the government look stronger, more in control, and more responsible. However, when individuals from other countries are throwing their hands up in astonishment or laughing in amazement at the wisdom or lack there of, one can only conclude that the US image is truly tarnished. Unfortunately, unlike silver, one cannot simply apply a bit of polish and a smidgen of elbow grease to remove the tarnish and restore the US image back to a visage of power and control. Joseph Shalaby is a Mortgage Broker in Southern California with nearly 10 years of expertise and leadership in the real estate industry. His firm American Mitigation Group

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Presented by Daniel Toriola is a leading authority on mortgage crisis resolution, including: loan modifications, and short-sales.

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Presented by Daniel Toriola

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