January 30th, 2009
For the year, the GDP was on the positive side,
however, seeing a 1.3 percent increase. However, that increase is marginal and the
slowest since 2001. The Dow slumped Friday on hearing the news but still ended
positive for the week.
Automotive and home furnishings saw a near 25 percent
decrease in sales over the fourth quarter, the worst decline in over 20 years.
Already struggling U.S. automotive companies like GM and Ford, desperate for
bailout cash, is in the worst financial condition ever.
Investment in
business also fell to nearly 20 percent as small and large businesses tightened their
financial belts and foreign investors opted for a wait-and-see position
regarding the U.S. economy.
The first quarter of 2009 will likely see similar
trends as the fourth while not nearly as severe. The recently passed bailout
measure will help with the GDP shrinkage for the quarter. And generally more
people are optimistic early on this quarter as a new government seemingly eager
to assist the economy is doing everything it can think of to stifle any
further declines.
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January 29th, 2009
Shortly after the close of trading on Wednesday, the House
overwhelmingly approved President Obama's stimulus bill to the tune of nearly $8
billion. The vote of 244 to 88 showed that many in Washington have faith in what
the stimulus plan can accomplish for the economy.
The bill still has to
pass the Senate and deliberation is set to begin immediately.
This week
has already seen nearly 100,000 more Americans laid off. Some observers say it's critical that
Senate not delay on approving the nearly $1 trillion bailout. Democrats are
pushing hard for the stimulus to pass. Republicans, however, have not been fond
of the stimulus package, saying it lacks enough tax cuts and contains too much
overall spending. However, it is expected the plan will pass as early as this
week.
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January 27th, 2009
Nearly 4.2 million barrels a day of oil have been cut since
late summer of last year. The value of oil has fallen more than 70 percent since it peaked
just six months ago. The cut in oil production of the past few months has been
done to spur demand for crude oil, but many still have doubts that
the aggressive cuts will help oil prices rebound.
The world economic
recession is the number 1 reason oil prices are down. Most are concerned with
the continuing recession fears and problems most of the industrialized countries
around the world are experiencing. Fears of a prolonged recession have been
keeping demand low and the price of crude oil down.
As recession fears abound, many analysts see oil prices fluctuating greatly in the
next few months. Many say the value could see huge swings between $30 and $60 a barrel. This coming summer should see things level out, but many feel
the value of oil will continue to slide and stay closer to the $30 a barrel
mark. But it should eventually stabilize by year's end.
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January 22nd, 2009
Unemployment numbers have been watched as closely as falling house prices. Many experts believe that unemployment won't likely decrease until we see the bottom in housing starts. Some believe that should be this summer and it will take a few more months before employment numbers rebound.
There's possibly more than a year before the lines at the unemployment centers wane and businesses begin to staff to fill vacant and newly created positions.
The housing crash has reduced overall household wealth, which has directly resulted in small businesses and families sharply reducing spending. Coupled with last year's unemployment increases, nearly 75 percent of all economic spending has been negatively affected.
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January 22nd, 2009
In Britain, unemployment rose to nearly 250,000 each
week during the month of November. Many analysts believe that the the fourth
quarter of 2008 will be the worst for the British economy since 1980, making it
official that the economy fell sharply into recession in November.
The
last time the British economy recessed so quickly was in 1990. It took several
months before the economy rebounded and Britain found its way out of the
recession. Unlike the U.S., many experts believe the recession in Britain will
be short lived. Many believe that the economy will begin to grow again by the
summer.
Now at a seven-and-half year low against the dollar, the pound
will likely begin regaining some of the ground it has lost since September. The
20-billion pound stimulus approved by the British government is currently being
injected into the struggling economy to support businesses from declaring
bankruptcy and avoiding hurting the economy more by adding to unemployment
numbers and increased bankruptcies.
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January 16th, 2009
President-Elect Obama is expected to receive the remainder of the bailout money approved by Congress. Obama has asked for and is expected to received upwards of $385 billion. Many analysts believe that more money for the the bailout will likely come his way as well. It would appear that Congress is in the president-elect's corner when it comes to what to do with the bailout money.
Many are asking for funds. The auto industry and even many who have already received some of the huge bailout amount are asking for new funds.
Obama is moving into the White House and bringing with him enough cash that, if handled correctly, could mean a foreseeable end to the economic downturn. Even President Bush is backing the president-elect, having said Obama should receive the rest of the bailout money to appropriate as he and Congress see fit.
So, will the optimism that was created when Obama won the election in November translate into optimism on Wall Street? We will only be able to find out when he takes office later this month. Most likely the economy will continue to struggle, but with the House and Senate on Obama's side, optimism may eventually win out as the market is injected with the rest of the bailout cash.
Some feel Obama taking office will in fact spawn optimism on Wall Street . The combination of a new government and nearly $4 trillion in bailout money, 2009 may very well see the end to the recession and millions of new jobs being created.
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January 15th, 2009
Showing signs that the economy is getting worse as many have projected, the price of crude fell Thursday to as low as $33 a barrel briefly before settling for the day around the $34 mark.
The price at the pump as yet to catch up to the rapidly falling price of crude oil. For the first time ever it is now cheaper to buy a barrel of oil than it is to fill your tank with gas.
New unemployment numbers helped push the price for crude oil down this week and most indicators point to the price per barrel continuing to fall in upcoming weeks and months. Many analysts believe that oil will likely not rebound till much later in the year, if it does at all.
OPEC has continued to cut back on production. Refineries are scaling back, producing fewer gallons of crude. With demand for oil at a seemingly all time low, many refineries are simply running out of room to store the mass quantities they have of crude oil barrels.
Prices at the pump are expected to fall soon, possibly reaching as low as $1.50 per gallon. That would mark a 50 percent reduction in cost per gallon compared to this time last year when gas topped $3 a gallon.
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January 09th, 2009
Jobless numbers will continue to mount as the next few months will
see more and more joining the ranks of the unemployed. Since no indicators are
pointing to a likely economic rebound in the near future, look for 2009 to bring
more job losses.
If you have a job, consider yourself fortunate. 2008
saw an additional 2.6 million people to lose employment and most are still
looking for new jobs. 2009 will likely see close to 3 million additional U.S.
citizens lose their jobs. That's over 5.5 million over a two year span.
Positions will continue to be eliminated until the economy shows signs of
rebounding.
Unfortunately, no one knows when that rebound will take place.
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January 05th, 2009
Here are five ways you can benefit during a recession:
1. Continued Falling Gas Prices -- 2009 will likely continue
on the trend of cheaper gas prices. Expect crude oil to continue to fall as it
will likely reach well below $40 per barrel.
2. No Better Time To Buy a
House -- analysts suggest that the housing market hasn't bottomed out yet
and won't likely till some time in 2010.
3. Marketer's Heaven -- experts
believe that upwards of 25 percent of all retail stores will close down in 2009.
Marketing expenses are typically the first to go as companies scale back
spending while trying to stay in the green. With the decrease in ad and
promotional spending, now is a great time to spend those advertising
dollars.
4. 0% Financing -- many auto makers are offering zero-percent financing on
new and used cars and trucks. The deals don't stop at the consumer level. Need
a truck or specialized vehicle for your work? Now is the best time to buy or
lease one.
5. Stocks, Stocks and More Stocks!! -- not for the faint of
heart, but for those who can afford to, investing in the stock market makes
fantastic sense right now. Don't invest more than you can afford lose, however.
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January 05th, 2009
Many on Wall Street are beginning the new year
very optimistic as a massive stimulus package would mean much needed relief to
the faltering economy. While most still belief the worst may not be behind us,
there is increasing reason to believe that the economy will be able to handle
the bumps and surprises ahead. Many feel, however, it's going to be one heck of
a bumpy ride.
Greg Church, CIO of Church Capital Management, calls the days ahead a "rollercoaster" that will surely be filled with ups and downs and
a few more surprises.
Optimistic construction spending numbers from the
Commerce Department are further proof that the economy may be rebounding,
finally after heading toward a recession this past year.
The next couple
of months will be crucial for the economy, as quarterly reports trickle in and
housing data is updated. Mmany believe it will be March or April before we can
truly gauge whether the rollercoaster ride is nearing its end.
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