APOCALYPSE – 2011 – The Looming Prospect of a Stock
Billions of dollars in tax payers money has been given away on a platter to the ever greedy banks as part of the stimulus package. President Obama's magic did work for a while and the green shoots did arise much to the relief of many economic analysts. however the old issues still remain alive. The U.S. data on Jobless claims is still not what the president would like to see. amid loud protests, the CEOs of these banks are taking home hundreds of millions of dollars as bonuses. The retail credit growth is still sluggish and new home construction is a far cry from the heady days of 2007.
These were the same banks that were beaten black and blue in the stock market crash that ensued the sub prime crisis in October 2008. These banks have now fortified their capital reserves solely on the blood supplied from the U.S. Federal Reserves. President Obama has announced that it is pay back time for the banks but it remains to be seen how much the banks would be willing to give back.
The fiscal package and stimulus package did create an illusion of renewed consumer spending. The U.S. Federal Reserves poured in hundreds of billions of dollars to revive the economy. as a result it plunged the great nation into debt that is now close to 13 trillion Dollars. The government mimicked the effect of consumer spending for a while but it can not go on for ever. Soon inflationary pressures would build up on the economy and the Federal Reserves chairman would have no other way but to raise the interest rates.
Banks have many skeletons on their cupboard. they have not disclosed the number of homes that are ripe for foreclosure. A rise in interest rates would increase the mortgage rates and would deal a death blow to the new home sales. it is a rough estimate from analysts that seven million homes would go into foreclosure in the year 2011. this time, the U.S.Federal Reserves would not be able to bail the banks out of the horrible mess.
The U.S. economy would slip into a double dip depression that would be as painful as the great depression of the thirties. The poor results of the corporate giants would begin to show up in the last quarter of this year.. Oil prices and the interest rates that would soon be on an upward spiral would trigger the worst stock market crash. The crash would have far reaching effects and would not be a short-lived phenomenon. Some pundits have predicted a level of 400 for the S&P 500 index by the year 2014.
APOCALYPSE – 2011 – The Looming Prospect of a Stock
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