Saturday, November 08, 2008
US economy worse since 2001 because of Bush's success, auto bail out coming, 1.2 million lost jobs in 2008, it is just beginning! Thank God for Obama!
The economy suffered its biggest decline since 2001 in the third quarter, ushering in what may be the worst recession in a quarter century and boosting the chances of Barack Obama and his fellow Democrats in the election now Bush's created mess is his to hopefully fix and this is only one of them!. Gross domestic product contracted at a 0.3 percent annual pace, less than forecast, a Commerce Department report showed today in Washington. The last major economic data before the election also showed that a record two-decade consumer spending boom ended last quarter as the credit crunch deepened.
``The crisis really kicked up in late September,'' Ethan Harris, co-head of U.S. economic research at Barclays Capital Inc. in New York, said in a Bloomberg Television interview. ``We're going to be looking at a very unfriendly GDP number in the fourth quarter, with a drop of 2 to 4 percent.'' Consumer spending dropped at a 3.1 percent annual pace, the first decline since 1991 and the biggest since 1980, after President Jimmy Carter imposed credit controls. The median forecast was for a 2.4 percent drop. Worst Since 1950 The 6.4 percent rate of decline in spending on non-durable goods, like clothing and food, was the biggest since 1950.
Cutbacks in investments in business equipment and less spending on residential construction projects also contributed to last quarter's contraction. A narrower trade deficit and a smaller decline in inventories prevented a deeper contraction. Excluding those two categories, the economy would have contracted at a 1.8 percent pace, the most since 1991. The report also showed what may be the last burst of inflation before the economic slowdown forces companies to limit price increases. The price gauge rose at a 4.2 percent pace last quarter, the biggest gain in 17 years. Costs tied to consumer spending and excluding food and energy, increased 2.9 percent, the most in two years. Chief executive officers from Ford Motor Co., Starwood Hotels & Resorts Worldwide Inc. and Caterpillar Inc. are among those in the past two months that have said the U.S. is in a recession. `Slow Pullout' ``You might have a two- or three-quarter negative growth and then a slow pullout,'' There is not going to be a slow pull out this is just beginning
After almost an hour’s delay in releasing its third quarter earnings report, General Motors (GM: 4.27, -0.53, -11.04%) posted worse-than-expected results on Friday at 11:15 a.m. Eastern time, raising questions about whether it can survive the coming year without a cash infusion. The Detroit, Mich.-based auto maker’s losses of $4.2 billion in operating costs and $6.9 billion in cash are due to the economic crisis and a sharp drop-off in sales.
Despite massive restructuring efforts, the auto maker has been forced to look to the government for a federal bailout, and joins with Detroit neighbor Chrysler and Ford in conjunction with the United Auto Workers Union to ask for a rescue package. Chrysler and GM are both faced with liquidity problems moving forward, as well as a 25-year low in profits and sales. GM said it was no longer pursuing an acquisition, which was widely believed to be with Chrysler.
“We’re going to have to work very hard, do all the self-help we can, and we’re going to find a way to get through this,” said Wagoner. “Hopefully the government will be willing to provide the support we need along with all the work we’re doing.” Additionally, GMAC, the financing business owned by both GM and Chrysler, reported a net loss of $2.5 billion for the third quarter, down by $900 million from last year. This was attributed to low used-vehicle prices and poor consumer credit. GMAC also had its counterparty credit rating downgraded by Standard and Poor's from ‘B-‘ to ‘CCC’ and its residential capital counterparty rating downgraded from ‘CCC+’ to ‘CCC-.’ We will own the big three too
I heard yesterday that the big three will be looking for $25 Billion to rescue them and another $25 Billion to retool for the future. Once again it sounds to me like we the people are being suckered again! Then The government reported more grim news about the economy Friday, saying employers cut 240,000 jobs in October - bringing the year's total job losses to nearly 1.2 million. According to the Labor Department's monthly jobs report, the unemployment rate rose to 6.5% from 6.1% in September and higher than economists' forecast of 6.3%. It was the highest unemployment rate since March 1994.
"There is so much bad in this report that it is hard to find any silver lining," said Morgan Keegan analyst Kevin Giddis. Economists surveyed by Briefing.com had forecast a loss of 200,000 jobs in the month. October's monthly job loss total was less than September's revised loss of 284,000. Payroll cuts in August were revised up to 127,000, which means more than half of this year's job losses have occurred in the last three months. There is no silver lining
That is unless you realize we will now have Obama a thinking man at the helm of the mess Bush has purposely created! President-elect Obama said Friday that the country is facing the greatest economic challenge of our lifetime and "we're going to have to act swiftly to resolve it." However in his first news conference since winning the presidency Tuesday, Obama deferred to President Bush and his economic team, noting that the country has only one government and one president at a time.
But, he said, "immediately after I become president I will confront this economic crisis head-on by taking all necessary steps to ease the credit crisis, help hardworking families, and restore growth and prosperity." "I'm confident a new president can have an enormous impact," he added.The president-elect spoke after he and Vice President-elect Joe Biden met privately with economic experts to discuss ways to stabilize the troubled economy.
More evidence of a recession came Friday when the government reported that the unemployment rate had jumped from 6.1 percent in September to 6.5 percent in October. Despite dour third-quarter reports from Ford and General Motors, stocks rose some after two days of heavy losses. Obama's transition to power and early days in office, if not the entire first year of his presidency, almost certainly will be devoted to finding ways to remedy dismal economic conditions. The economy was the top concern of voters demanding a new direction as they ushered into office the Democrat who promised change after eight years of Bush's policies. Obama is confident
I am confident too we were extremely lucky to finally get the right person elected for the awesome task of President to clean up the overwhelming numerous messes Bush has purposely created. We finally have our shining light to lead us and the world out of the dark tunnel Bush has created for the worlds future. Now to keep him alive! Just think of the alternative to that. He is our hope in avoiding the numerous negative scenarios we have often discussed!