EconomicCrisis.US

Wall Street has spent much of the past month worrying that trouble on the other side of the Atlantic, and the weak jobs picture in the U.S., will combine to force a nasty double-dip recession and a new bear market.

Given the proximity to our own scary financial crisis, it’s no surprise to see concerned investors flee from risk, wiping out 14% of the value of the S&P 500 in just six weeks.

But what if, after all, those double-dip fears are overblown?

The bulls argue the U.S. economic recovery remains on track, the euro has reached a short-term bottom, earnings will continue to impress and companies’ balance sheets are fortified with enough cash to withstand a little turbulence along the way.
Read the rest of this entry »

A dire warning has been issued by one of the world’s top economists. Arthur Laffer, author of several important books on economic theory including his latest, “Return to Prosperity: How America Can Regain Its Economic Superpower Status” was also an adviser to the Reagan Administration during the 1980s and a member of the Economic Policy Advisory Board.

His economic models have been proven to work and withstood the test of time. Now Laffer has declared that the US economy is heading for a big fall early in 2011.
Read the rest of this entry »

American International Group Inc.’s bailout had a “poisonous” effect on the U.S. financial system because it demonstrated the government would protect Wall Street firms from their own risk-taking, said a Congressional panel.

The Federal Reserve could have acted earlier to find a privately funded solution for New York-based AIG before the September 2008 rescue, the Congressional Oversight Panel said today in a report. The bailout, which has swelled to $182.3 billion, transformed banks’ financial bets into fully guaranteed obligations, the panel said.
Read the rest of this entry »

Political observers of every stripe agree it will be the deciding factor in November’s midterm elections. And between now and Election Day, there will be key milestones to measure just where the economy is heading — and perhaps more importantly, where voters think it is heading.

Here are five indicators that campaign strategists will be watching for:

1. August jobs report

The government’s monthly jobs reports have become the single most important proxy to measure the economic health of the nation and the political health of the Obama administration, with a significant portion of political Washington glued to computer screens at 8:30 a.m. on the first Friday of each month, waiting for the results.
Read the rest of this entry »