08S7B trailblazers

US economy

Since our class has done a research on the sub-prime market in the US and some of us still need to present on this topic next term, i just want to share some ideas on the situation of the US' current economy now.

US former Fed-chief Greenspan has expressed a pessimistic view on the US economy that 'the United States has slipped into an awfully pale recession and may continue to languish for the rest of the year. ' He maintains that recovery will not begin until home prices stabilise. Some more signs of recession include declines in manufacturing and housing industries, successive cutting of interest rates ( to encourage consumption as well as lending) , slower rate of growth ( at a 0.6 per cent annual rate over the last two quarters, the slowest pace since the 2001 recession). A benevolent sign might be a slight drop of unemployment rate down to 5.0% from 5.1%.

However, opinions are divided among European economists over the future of the US economy. Britain's central bank suggested that the credit crisis was easing. Basically they see that confidence and risk appetite are returning.

The International Monetary Fund has estimated that the ultimate cost will reach nearly US$1 trillion (S$1.36 trillion) in write-downs and credit losses in the current crisis. But this estimate, based on imperfect information and models, may turn out to have been unduly pessimistic, the BOE said.

However, some other economists have maintained that even if conditions in the financial markets improved, the wider economic fallout from the credit crisis would persist for many months to come. Stastistically,banks worldwide have written off more than US$300 billion since the collapse of the US sub-prime mortgage market.

Reference: http://www.straitstimes.com/Money/Story/STIStory_234469.html
http://www.straitstimes.com/Money/Story/STIStory_233432.html
http://hspm.sph.sc.edu/courses/econ/Monopoly/Mon.html

Sicheng

Labels: US economy

posted by AphelionWang @ 6:40 PM