Tuesday, July 15, 2008

The Second Day Of Our New Reality

What a compelling day:

The Dow dropped below 11,000 for the first time in two years.

In a news conference, President Bush attempted to allay fears about the economy; instead, anybody with an IQ of 100 or higher will be tempted to stockpile several months worth of food and cash--oh, wait, this is what the CDC recommends for emergency preparedness due to Avian Flu or Terrorism. Read the transcript of the President's statement, and be sure to scroll down through the reporters' questions and the President's answers.

Meanwhile, Fed Chair Bernanke abandoned his June assessment that the threat of an economic downturn had diminished, telling lawmakers that growth and inflation risks are increasing.

There are ``significant downside risks to the outlook for growth,'' and ``upside risks to the inflation outlook have intensified,'' Bernanke said in semiannual testimony on the economy to the Senate Banking Committee in Washington. Do you need that sentence translated into English? It's something like, "I've been wrong, I've been sitting on my hands as has the Treasury and the Bush Admin, and now things are getting really baaaad."

Bernanke said that stabilizing financial markets remains ``a top priority,''

The Fed chief spoke less than two hours after government figures showed that the economic boost from U.S. tax rebates began to fade in June and inflation pressures increased. To read further, go to Bloomberg.

And despite widespread concern about losses suffered by Fannie Mae and Freddie Mac, the Bush administration’s call for quick passage of legislation to authorize the use of government funds to save them ran into heavy fire, especially among some Republicans concerned about taxpayer liability.

The opposition threatened to slow down the rescue plan if lawmakers insist on making major changes to the package, which would allow the Bush administration to use the United States Treasury to help Fannie and Freddie by lending them money and buying their stock.

And the WSJ says we're not alone, in Europe's Economy Takes a Hit:

The rising risk of recession in Europe shows that despite the strength of emerging-market economies such as Russia and China, the economic downturn that began in the U.S. last year is spreading to other regions, battering hopes that the global economy might have "decoupled" just enough that the rest of the world could coast through a U.S. downturn relatively unscathed.

Want a break from all this? Time to get Shiny, Happy....


Anonymous said...

A leading economist Nouriel Roubini says, "This will turn out to be the worst financial crisis since the Great Depression and the worst US recession in decades." I'm probably one of the few real estate agents who hasn't drunk the koolaid and put on a false, cheerful face. I fear this is just the beginning of more economic pain to come.

Diana said...

If your not a fan of Shiny, Happy People (unthinkable, I know) here's a funny, bubblicious post I came across today...


Real C'ville - The Bubble Blog said...

Thanks for the tip on the Onion article, Diana! Very amusing, with lines such as ""The U.S. economy cannot survive on sound investments alone."

The link isn't working (Blogger's luddite tendencies!) so we made a 'tiny url' for

"Recession-Plagued Nation Demands New Bubble to Invest In"


Anonymous said...

This is getting depressing. Could you please snark some more about some overpriced local house?

Real C'ville - The Bubble Blog said...

Here's a link to the economist that anonymous #1 mentions, Nouriel Roubini.


You must subscribe to read full stories. We have, and are looking forward to learning some new stuff.

Thanks, Anon.

And Anonymous #2? We're working on getting back to the houses. It's just that the wider world has been calling us....