Bleak Economic News Gets Bleaker

December 4, 2008 06:00 PM
 

via a special arrangement with Informa Economics, Inc.

Economic stabilization plan in U.S. to now focus on housing sector


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


I continue to travel throughout the U.S. and can see the pained and near shell-shocked looks on many as they try to understand and deal with the plunging U.S. and world economy. Some updates...


-- Bleak economic news gets bleaker. Dismal U.S. unemployment numbers were released this morning, including a very large and bearish revision to job losses -- the U.S. economy has lost more than 1.2 million jobs in the last three months alone following revisions to Sept. and Oct. that showed even steeper job cuts than first reported. An official recognition earlier this week that the U.S. entered recession in Dec. 2007 is leading many to think U.S. economy watchers do not know what they are doing. There is growing concern in China about its economic outlook and fears of unrest. U.S. and world equity markets continue to plunge. Americans and others around the world are shell-shocked from a virtual economic war of wounds.

-- What it means. Even lower energy prices ahead (with some predicting $25 per barrel for the lows) and plunging fertilizer prices by next spring, which if realized could and likely will impact the U.S.corn and soybean acreage battle. Stepped-up stimulus plans are on the drawing board by the U.S., Europe and other countries desperate to at least stabilize conditions but unable to date to do so. U.S. meat producers fret about a dramatically slumping world economy and what it could do to export sales. Key to the world economy is China -- if its economic growth drops below 8 percent, an ugly situation gets uglier.

-- Biggest help ahead: aid for the U.S. housing sector. The Federal Reserve and Treasury Dept. are working on several ways to lower long-term interest rates, at least for new home buyers and perhaps giving existing homeowners a chance to refinance at levels most never expected a few months ago. That could eventually stabilize the housing sector and begin to right a very troubled and key portion of the U.S. economy.

Bottom line: The U.S. and world better have leaders that can and will step up and work together.


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


 

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