Happy New Year! If you are like most people, that may sound a bit like wishful thinking this time around. And, I’m afraid, with good reason.
Consumer confidence in the United States fell to a record low this month…while prices of single-family homes in October fell a record 18 percent from the year before.
The S&P 500 has lost about 40 percent, says Reuters. Only the 47.1 percent fall in 1931 during the Great Depression exceeds this.
For the past twelve months, an estimated $10 trillion dollars has been lost from stock markets, the news agency reports.
Any good news?
Well, yeah. I suppose. Sort of. If you have money or can get money (many can’t nowadays even with pretty good credit scores) then you can probably find a house to buy that is pretty cheap compared to a year ago.
But there aren’t enough of these people, apparently, to fuel a recovery anytime soon.
The Barack administration is likely to pump hundreds of billions into the economy in an effort to breathe some life into it.
But these all seem a drop in the bucket when placed against all the negative things happening to the world’s economy.
Our subprime mortgage mess has dragged down governments in Europe and Asia and there is no telling where this will lead: social unrest in places such as China (which already has some); another round of deep recession and maybe deflation in Japan; a weakening of the once mighty German economic machine?
Layoffs have struck pretty much all industries–the health care industry being a notable exception.
Of course there will be those who profit from all of this–that is always the case. They are the exception, though, and by no means the rule.
It would be nice to think that a new administration will be able to sweep this all away. Maybe. Maybe not.
The Financial Times is reportedly carrying an interview with the soon to be ex-Treasury Secretary–Hank Paulson–who tells the paper the U.S. doesn’t currently have the tools to effectively battle something that he calls “really historic.”
Great. Just what we wanted to hear. But we do need to hear it because it is true. Funny how outgoing officials tend to say more honest things then entrenched ones!
Had he said this early on, maybe it would have scared us all more (though it is pretty damn hard to see how) but maybe it would have been the splash of ice-water in the face everyone needed?
We will never really know one way or the other.
2009 is upon us…Here’s hoping for a much better picture when it comes time for 2010.