Weak US data worries wise money
Stocks suffer as a combination of weak economic and corporate news reinforced fears of a prolonged global recession.
Where to start; news from China showed that the economy there is in sharp decline removing any hope that China's growth will cushion the impact of the global downturn and reversed optimism sparked by China's announcement over the weekend of a huge US$600bn stimulus package.
Earlier corporate news from the US added to the gloom with Circuit City, the second largest electrical retailer in America, filing for bankruptcy protection, DHL announcing 10,000 job cuts and shares in the troubled car maker General Motors tanking to their lowest level since 1946 on fears that a bailout by the government will wipe out any remaining shareholder value.
Also weighing on sentiment was the announcement of a further cash injection by the US government in AIG to the tune of US$150bn after the ailing insurance company recorded a third quarter loss of US$24bn.
Fannie Mae, the nationalised, US mortgage finance company also reported a massive loss in the third quarter amounting to US$29bn, with repossessions running at a total of 67,519 homes, equivalent according to the Times to a town the size of Dayton, Ohio!
More disappointing news on the UK housing market came from the Nationwide Building Society when it announced that its net mortgage lending plummeted 70% over the last six months and warned that the whole UK mortgage market would fall by 80% this year.
Home sales continue to fall according to the latest survey from the Royal Institute of Chartered Surveyors (RICS). If this was not bad enough the British Retail Consortium said that retails sales fell for a fifth straight month in October down 2.2% the biggest decline since May 2005.
It would appear that more time is needed before the effects of last week's 1.5% cut in interest rates by the Bank of England kicks in but no doubt this data will increase the pressure on Gordon Brown and to deliver meaningful fiscal measures to reinforce the monetary stimulus provided by the central bank.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
Where to start; news from China showed that the economy there is in sharp decline removing any hope that China's growth will cushion the impact of the global downturn and reversed optimism sparked by China's announcement over the weekend of a huge US$600bn stimulus package.
Earlier corporate news from the US added to the gloom with Circuit City, the second largest electrical retailer in America, filing for bankruptcy protection, DHL announcing 10,000 job cuts and shares in the troubled car maker General Motors tanking to their lowest level since 1946 on fears that a bailout by the government will wipe out any remaining shareholder value.
Also weighing on sentiment was the announcement of a further cash injection by the US government in AIG to the tune of US$150bn after the ailing insurance company recorded a third quarter loss of US$24bn.
Fannie Mae, the nationalised, US mortgage finance company also reported a massive loss in the third quarter amounting to US$29bn, with repossessions running at a total of 67,519 homes, equivalent according to the Times to a town the size of Dayton, Ohio!
More disappointing news on the UK housing market came from the Nationwide Building Society when it announced that its net mortgage lending plummeted 70% over the last six months and warned that the whole UK mortgage market would fall by 80% this year.
Home sales continue to fall according to the latest survey from the Royal Institute of Chartered Surveyors (RICS). If this was not bad enough the British Retail Consortium said that retails sales fell for a fifth straight month in October down 2.2% the biggest decline since May 2005.
It would appear that more time is needed before the effects of last week's 1.5% cut in interest rates by the Bank of England kicks in but no doubt this data will increase the pressure on Gordon Brown and to deliver meaningful fiscal measures to reinforce the monetary stimulus provided by the central bank.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
Labels: credit crunch, unemployment, US recession, wise money
posted by Drs Search @ 9:35 AM
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