Low December Prices

Prices for goods in general have fallen in December to help lighten the mood over the economy though job losses and the economy as a whole are generally still getting worse. The only other good news is the price of gas as it continues to steadily fall. The mood still hasn't improved much since people still don't have the money to spend on the lower priced goods.

http://biz.yahoo.com/rb/081223/business_us_usa_economy_sentiment.html

Recession

A report released today announced that the U.S. has been in a recession since December of 2007 according to the National Bureau of Economic Research. The whole report can be read here on CNBC's website.

Click here to watch CNBC's review on the NBER report

The Week Ahead for Wall Street

The past week for the American financial markets brought record lows for the Dow and S&P 500 as they fell to levels not seen in many years. To compound this problem CitiGroup's stocks fell even lower bringing more questions as to how to revive the company to survive the crisis. In addition, the Big 3 Automakers flew to Washington DC to speak with lawmakers to request money in the form of a bailout or a loan. What worked against the automaker execs was their arriving in individual personal jets. Lawmakers pointedly asked them about this and if it would be possible to get rid of the jets as a showing that the execs understand the current situation. All execs sat still showing they would keep their personal show of wealth. Investors and projecting that the times though will continue on a downhill slide. Hope is still around as President-Elect Obama is holding a conference with his economic advisors as to what to do about the current situation. Questions that are hoping he answers include CitiGroup and Detroit automakers.

http://biz.yahoo.com/ap/081123/wall_street_week_ahead.html

The big three bailout still in progress

Congressional leaders have agreed to grant the big three more time for the bailout case. Till now the Detroit giants have been unable to present a strong case for their claim on the $25Billion bailout. The congress has asked the General Motors Co, Ford Co and Chrysler to present a detail plan as to how they are going to spend the money.

A two day session took place in Capitol Hill to discuss the bailout for automakers this week. All the three automakers were unable to convince the government that once the $25billion is granted, they would not need further assistance from the government. They were also unable to prove that the companies were getting mere cost efficient and competitive. To make the matter worse the CEO’s of the three corporations came to Capitol Hill in the private jet.

The congress has agreed to give some more time to the three auto giants to put up a strong case. The next testimony will take place on Dec 2rd 2008, which would play a major role in deciding the fate of these corporations. The speculations are that if the government doesn’t support them soon, then at least one of the three corporations will not survive till the next year. It is also estimated that the one going down may take the other two with it.

http://www.latimes.com/business/la-fi-bailout21-2008nov21,0,2593789.story?page=1

Facing reality: Recession

Recession is the word of the week. Several countries such as China, Germany, Italy, The UK, have reported a drop in GDP and increasing unemployment.

The UK will officially enter into a recession if the forth quarter does not get any better. It is also expected that GDP growth will not be seen until 2010. The UK has also performed bail outs and might be planning a fiscal stimulus package, which can have a negative effect if that package seems "reckless" or just too desperate.

In China, Hong Kong has reported their lowest drop in exports since 2002. It has reported a growth of 3-3.5% compared to 6.4% last year. While unemployment has raised to a 3.4%.

Germany and Italy have officially reported a recession which are the two strongest countries in the Eurozone. Spain is expected to follow. But France is the exception, they have actually reported a growth of 0.1% from June to September.

The USA is not on a recession yet but unemployment has also raised to 6% and retail stores have experienced a drop in sales.






http://money.cnn.com/?cnn=yes
http://news.bbc.co.uk/1/hi/business/7729253.stm
http://news.bbc.co.uk/2/hi/business/7729018.stm
http://news.bbc.co.uk/2/hi/business/7729652.stm

G-20 Summit

Leaders of 20 major nations worldwide are meeting in Washington over the next few days to begin/continue a discussion on how to best handle the current financial crisis that is affecting markets worldwide. Several, if not many, are working towards reform to bring all markets into step to work together more efficiently. The general concession is that one meeting will not solve all the problems and everyone needs to work together to figure out individual solutions and to bring everyone up to speed. It was also said that the solution may have to wait until the next administration to continue though that may or may not actually help.

Pushing for Change at G-20 Summit - Nov 13, 2008; CNN Money

GM in the line for bailout

On Friday General Motors reported its quarterly loss, which was worse than expected. GM indicated that it may file for chapter 11 unless the federal government rescues it.

According to cnn.com, GM reported quarterly loss of $4.2 billion dollars. Last year it reported a loss of $1.6 billion. The only thing that can save the biggest automaker of the nation is the help from the government or if the economy improves drastically.

The speculations are that if GM goes down, it will drag many others with it. If GM files for chapter 11, then it would sell the cars at far lower rates, forcing ford and Chrysler to follow the same. It may impact the already tumbling economic condition of ford and Chrysler.

Many are saying that the government needs to take a decision in a few weeks before an auto giant goes down and starts a chain reaction.

http://www.latimes.com/classified/automotive/highway1/la-fi-autos8-2008nov08,0,5869714.story