"Crisis of Confidence" For World Economy

Americann · Aug 17, 2011

There is "crisis of confidence" according to Australia's Swan.

World Bank industry has the major crisis of confidence now. Thanks to who?

The Democrats are all prepared to follow Michael Moore's dictum "There's plenty of money left in the country. All we have to do is take it"

Welcome to 1937.

It's a bit tough to have confidence in an economy that creates money out of thin air and a currency is only as good as the government that backs it. I think we have come to the end of the line with the fantasy money but as a society we don't know where to take it from here.

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waltky · Aug 21, 2011

The sky is fallin'...

Stocks: Fear takes center stage
August 20, 2011: Gold keeps hitting record highs as fearful investors turn to the metal as a safe haven.

Nervous investors hoping for a reprieve this week will be disappointed. The past month has been nothing but a disaster for stock market investors. The S&P posted its biggest four-week loss since March 2009. Meanwhile, safe haven plays like gold and U.S. treasuries have soared, with gold hitting a new record high day after day. This week will be fairly quiet as far as scheduled economic and company events, but fears about the U.S. possibly heading into another recession and the financial crisis in Europe are expected to weigh heavily on trading.

The big event for investors will be on Friday, when Federal Reserve Chairman Ben Bernanke will give his keynote speech at the Kansas City Fed's annual retreat in Jackson Hole, Wyo. Bernanke is faced with a turbulent and declining market combined with investor fears that the U.S. economy is heading into an economic downturn, just as he was when he appeared at the same event one year ago. At the time, the Fed chairman reassured investors by raising the possibility that the Federal Reserve would do another round of quantitative easing in his speech. The central bank implemented that plan a few months later.

Investors aren't sure what to expect from Bernanke on Friday. Some believe he will bring up the possibility of a third round of quantitative easing - commonly nicknamed QE3. Others think Bernanke will only re-emphasize the central bank's statement from earlier this month, when the Fed said it planned to hold interest rates at near-zero levels for at least two years. Either way, investors hope to see some sort of clear leadership from the Fed chairman. "What's worrying the markets is the perception that there isn't much more that can be done by the Fed and politicians," said Rob Lutts, chief investment officer with Cabot Money Management. "All three -- the White House, the Fed, and Congress - are in a bind that I have never seen before."

Headlines out of Europe will also dominate market direction this week. Europe's financial situation is a mess, it's getting worse, and Wall Street has zero confidence that politicians will be able to fix it. Those fears have spilled over into the region's banking sector, where rumors that European banks are having trouble getting financing are stirring up ugly memories of the weeks leading up to Lehman Brothers' collapse. Many believe a default is inevitable. "Europe is at a very pivotal point right now [as far as] deciding the fate of the whole euro zone," said James Keenan, a portfolio manager with BlackRock.

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Stock market begins to feed economic fear
Aug 21, `11 - The stock market is starting to feed economic fear, not just reflect it. Stocks have fallen four weeks in a row.

Some on Wall Street worry that the resulting blow to confidence, not to mention 401(k) statements, has set off a spiral of fear that could push prices even lower, cause people and businesses to pull back and tip the economy into a new recession. "I'm nervous that fear will lead companies to stop hiring and people to stop spending," says Jim Paulsen, chief investment strategist of Wells Capital Management, famous for his usually bullish take on the markets.

A home sales report this past week showed that more sales than usual fell apart at the last minute, which suggests plunging stocks and dismal economic news gave buyers cold feet. At least 16 percent of deals were canceled ahead of closings last month, four times the rate in May. Beth Ann Bovino, senior economist at Standard & Poor's, says that another big plunge in stocks could "push us closer to the brink."

The Standard & Poor's 500 stock index ended Friday at 1,123.53, down 5 percent for the week. The average is down 16 percent during the four-week losing streak. One reason for the drop is fear that another recession, if not certain, is more likely now. The run of bad economic news started last month when the government said the economy grew much more weakly in the first half of this year than thought. Growth, at an annual rate of 0.8 percent, was the slowest since the Great Recession ended in June 2009.

The economic weakness has made investors more likely to sell stocks at the first hint that things are getting worse. And last week, they got signs aplenty. A regional survey by the Federal Reserve said manufacturing had slowed in the mid-Atlantic states by the most in more than two years. Existing home sales fell in July for third time in four months. Another report showed that exports from Japan, the world's third-biggest economy, had slumped for the fifth straight month. Japan is still reeling from the effects of an earthquake and tsunami in March.

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"Crisis of Confidence" For World Economy

There is Crisis of Confidence?

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Americann Banned

waltky Well-Known Member

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"Crisis of Confidence" For World Economy

There is Crisis of Confidence?

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No

Americann Banned

waltky Well-Known Member

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