Plunging US Economy.. Are we in trouble?

[KissMyAxe]

=THOA

When the US actions create destructions all over the world, the same effects also befall on its own country. the country is facing the wrath from the great one.... left, front, back, centre, right, top all kena. What goes around, comes around.

I think this financial crisis in the US is really a massive one. If one should know, the Fed has already pumped in 1.5 trillion dollars into the credit market and yet Libor (interest rates bank charge among themselves) is rising up all the way and the crisis does not seem to be ending. Will another 700 billion dollars make any difference? Nobody wants to lend money because the banks have insufficient capital. Furthermore I think, there are still many more writedowns in the credit swap market, CDS, CDO, and the mortgage backed securities.The problem is that all these financial instituitions are not revealing their exposures to these investment instruments. There is no transparency....

 

[betsybug]

KissMyAxe=Nobody wants to lend money because the banks have insufficient capital.

No. It's because banks have no confidence that they will get their money back (from lending to other banks/businesses). Which is why we have what is called a credit crunch. The money is there; it's just not circulating as it usually does. People rather put them into Treasury bills which is why the returns from those are now nearly zero (!).

In Singapore, banks have recently raised interest rates on loans which is why we will see fire-sales in property (some in fact say this is already happening) as projects get completed and people will feel the pinch in paying up.

Things are going to get pretty rough (i.e. if they are not already pretty bad).

 

[KissMyAxe]

Thats what they actually declared. In real truth (IMHO), the losses due to the subprime loans certainly would be more than 700 billion. That is why so many economists are so sceptical about this amount being able to help the economy.There is no transparency.....No one knows the actual losses these banks are incurring. Even if they know it, I dont think they would want to reveal it. It would caused panic in the global financial markets.......Dont be surprised if these amount may increase to trillion and trillion of dollars in the near future

 

[KissMyAxe]

All along we have read in the media that banks are not willing to lend to each other and also to their customers because they have no confidence in getting their money back. Well this news totally reflects the opposite i.e that American banks have not enough capital to support lending.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aBkx1kVieIqI&refer=home

 

[snuffleupagus]

another recession looming, say goodbye to my extravagant expenditures and hope for the best with fingers crossed.

Dow Jones was a rollercoaster last night ever since they announced the interest rates cut to promote lending and borrowing. But at the end of the day, the lack of confidence overall caused it to plummet again. Nikkei also kena whacked jialat jialat.And our beloved gahmen is now telling us to suck it in and get ready for the ride of our lives. Electricity has gone up though, I wonder how many people will be laid off over the next 2 years. Time to clear my credit card bills while I still have a job.

 

[gsonique]

YES !!!

Take your money and RUN .....:twisted:

 

[Weiht]

YEAH, run straight to me!!!!!!!!!!!!!!!!!!!

 

[snuffleupagus]

so folks,..on a more positive note...i would like to know when you feel the economy will recover?...

 

[5for125]

think some expert opinion is that we are looking at a possible turnaround in 2H09 or 2010. but then again, these are the same people who couldnt have foreseen the current financial storm, so your guess is as good as mine. bear in mind that we are just starting to see the declines to corporate earnings and forecast revisions. companies are beginning to freeze headcount and reduce spending budgets, so more heartbreak is still in order. im pretty bearish and guess it will be 2H2010 before we see some confidence seep back, but i will be happy to be wrong.