Defaulting banks - where will it stop?

[Greg Burnham]

by Anthony Hall [UPI]:

It was all of 18 weeks ago the U.S. economic recovery looked at least semi-solid -- but with reports trickling in that hinted of a backslide.

That would be way back in late April, with the Dow Jones industrial average closing at 12,810 points. This week, having spent January through July ahead for the year, the DJIA skidded off September's high above 11,500 to a low of 10,733, triggering renewed talk of a second global recession.

Back in May, manufacturing reports kicked it off. In New York and Philadelphia, there were signs of manufacturing gains flat-lining. The housing market, an economic cornerstone, was not helping. The trade gap indicated the United States was more broke at the end of each month than at the start, to the tune of $50 billion or so per month. Then, job gains promising for four months, hovering just above a break-even point, started to flat-line as well. Trouble was on the way.

How quickly did that trade deficit number enter one ear and exit the other?

Even under debate in jaded Washington, $50 billion would turn a few heads. It happens to be five Environmental Protection Agencies paid for in one month with a little left over -- a Congressional Budget Office, perhaps.

It is almost the size of the Department of Transportation's annual budget, which hovers between $70 billion and $75 billion.

What could New Jersey do with $50 billion -- or California? Here's something funny: $50 billion in North Dakota? Funny, right?

What would Miami do with $50 billion? How about Minneapolis? How about handing it to Montpelier, Vt.? How absurd is that?

How about giving it to another country? Each month, the United States hands the Organization of Petroleum Exporting Countries roughly $12 billion. The trade deficit with China lately hovers between $25 billion and $30 billion.

How many jobs is that?

Currently, it would seem out of place to revisit President Barack Obama's pledge to double the size of U.S. exports within the next five years given the problems everywhere else.

On the other hand, as overly simplistic as this sounds, isn't $50 billion each month at least the start of a solid jobs program? And one that is tax-free, to boot?

In international markets Friday, sharp losses from the past two trading sessions moderated in most markets. The Nikkei 225 index in Japan lost 2.07 percent and the Shanghai composite index in China fell 0.41 percent. The Hang Seng index in Hong Kong lost 1.36 percent and the Sensex in India dropped 1.22 percent.

In Australia, the SP/ASX 200 index lost 1.56 percent.

In midday trading in Europe, the FTSE 100 index in Britain gave up 0.32 percent, while the DAX 30 in Germany shed 1.92 percent. The CAC 40 in France lost 1.69 percent and the Stoxx Europe 600 index lost 1.18 percent.

ANTHONY HALL || United Press International


(Source: UPI )
(Source: Quotemedia)