Quebec January 26, 2009
Posted by wannamakemoney in : Uncategorized , trackbackBrace Yourself For A Wild Ride on Wall Street this Week
According to CNN, Wall Street is expected to be reeling this week from the majority of companies reporting the worst quarter for corporate profits in a decade. Perhaps you don’t have the stomach for it anymore, but last week the Dow fell below 8,000 and kept battling back for the remainder of the week. Worse than expected results from Bank of America and Citigroup have weighed down on the market so far. The financial sector is expected to lose $12.5 billion this year as opposed to $5 billion in profits last year. However, 7 out of 10 economic sectors are expected to decline. CNN claims that analysts figure that if the DOW can hang on to to the 8,000 point level though the next few tough weeks, the market may have reached bottom.
This is how things have shaped up so far:
With 15% of the S&P reporting, Fourth quarter results are expected to have fallen 28.1% from a year ago which would be the biggest decline since it was first tracked 10 years ago. Moreover, while the Fed will meet this week, no one expects them to raise interest rates so that will remain at neat zero.
Other economic indicators that will be reported this week will be:
It is anticipated that the GDP will have fallen 5.2%, which is the biggest drop in 26 years, but the housing report is also expected to be terrible.
The market will also be looking for more direction this week as to how the remainder of the TARP bailout money will be spent by the Obama administration.
This is alarming news. It took the government a year to announce that we were in a recession. How long will it take to declare that we are in a depression?
The American people just need to be told the truth. In this case, Americans knew long before it was announced that we were in a recession. We are not stupid. The foreign papers are pointing to the obvious - that we are in a depression. We need to be told the truth and given details of what will be done, why a certain amount of money is needed and how an economic recovery plan is supposed to work.
It is our money and we have a right to know. Stop treating us like children who can’t be given bad news. We are an amazing group of individuals. We can handle it and we can do our part to get out of this, but we need to know what to do. Tell us what to do.
Ronald Reagan’s chief economic adviser has gone on record that the size of the proposed stimulus is not enough to bring the financial sector out of the mess that they are in and 1 in 10 Americans owe more than their homes are worth. That is dismal. If the stimulus is not big enough, tell us why and how much is needed and how we can pay it down when it finally works.
President Obama is navigating in waters that have not been charted as this country has never faced an economic crisis on the scale of this one. We need to support him, but we deserve to be given details so that we can become part of the process of the recovery and know how our money is spent.
It is not a lot to ask.
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