Monday, September 15, 2008

The Crumbling American Economy

A week or so ago, after the announcement that the Federal Government took over control of Fannie Mae and Freddy Mac I commented on another blog that this action is good in light of preventing a possible 1920’s-like depression, but at the same time I said it is frightfully alarming for our general state of the economy.

Today, a week later, it is another blue or rather black Monday, when Lehman Brothers, the 4th largest investment bank in the US filed for bankruptcy and Merrill Lynch, the ‘big bull’ announced that Bank of America have purchased it, saving its skin from filing for bankruptcy too.

When Lehman, founded 158 years ago and who has survived many previous economic slumps including the Great Depression, and another old timer Merrill Lynch, 94 years old, call it quits and unable to raise the necessary funds to operate properly then one can truly state that major financial shifting is taking place on Wall Street.

Is there anyone still out there doubting that the foundations of our economy is crumbling? Our financial services sector is in a total mess.

Add to that the 6.1% unemployment, the horendous $500 billion trade deficit and the even worst $9 trillion national debt. No wonder the Dollar is worth so little these days. Our economy is up the creek...without a paddle... and without seemingly proper solutions too.

Among the candidates, McCain again stated today that "fundamentally the economy is still strong."

Huh!!!! Oh Really!!!! It's laughable.

Obama on the other hand has more specific answers and solutions to some of today's economic problems, but his campaign's constant rheotoric of "four more years of the same" is beyond bland already. Everybody knows McCain isn't Bush so the Obama rhetoric is ineffective. Actually they can't stand one another I understand. Obama will have to change his tune otherwise he won't make it.

But then again, if we look towards the politicians to fix this mess we are looking in the wrong direction.


Boer said...

Ek dink nie mense wat buite die VSA woon besef nie hoe skokkend dit is dat maatskappye soo Lehman ondergaan nie. En ek verstaan AIG is ook in die moeilikheid. En die rippel-effek word baie duidelik in die Ooste gevoel, met markte van HongKong tot Korea wat saam na onder duik. As dit so aangaan kan ek nie sien dat die Demokrate die verkiesing kan verloor nie.

BluegrassBaobab said...

AIG got a government boost of $85 billion in cash last night to keep them in operation.