Another Black Friday (and is already doing Custom)

Another black Friday (and is already becoming habit) Buenos Aires, Argentina February 28, 2009 black Friday for the U.S. economy. Black Friday for world markets. Black picture without a light even in the distance. Uncertainty in the markets: gain for the dollar against the euro. It was confirmed the data of Gross Domestic Product (GDP) of U.S. fourth quarter. It was no surprise that it was contracted, but it has done in the extent it did. The contraction of GDP of the U.S. economy was not 3.8% as previously estimated at 6.2% beginning but Can there be much difference between the preliminary and final? For those who are suspicious of all, perhaps speculate that have biased the estimate downward to give the Obama administration time to take and launch economic stimulus plans and consolidation of the financial system so that when you know the definitive data, not impact heavily on the mood of the markets. For the rest, the U.S. statistics are reliable, not like some countries of underdevelopment. But back to the health of the U.S. economy, clearly it is not at its best.

The picture appears darker when considering the poor health of its banking system. What use is the reorganization plan for the banking system if the U.S. Treasury should leave urgently to save a major financial entities directly?

With the new intervention, the U.S. Treasury will have 36% of the shares of Citigroup (NYSE: C). This is intended to shore up the fragile capital base of the entity. The value of the shares in the company felt the blow and fell significantly, bad news for holders of these roles. He also felt the blow U.S. stock market where the S & P500 index reached its low of the last twelve years. Obviously some of the U.S. banking system entities do not stand to wait until the full implementation of the recovery plan recently approved banking system . Concerned about the situation of the U.S. banking system for two reasons that I mentioned previously in other articles, the possibility of occurrence of new episodes of crisis in the banking system to deepen the economic recession and the failure that it exhibits in this context to reactivate the wheel required for credit recovery. But the continuing instability in the financial system and generates an additional concern is the risk that a bank run occurs, a possibility considered but not very latent and increasingly likely to occur. In another negative news released on the day Yesterday, Fannie Mae (NYSE: FNM) announced that it lost U.S. $ 58,707 million in 2008, (in 2007 had lost $ 2,050 million), despite a 55% increase in net income.

The mortgage giant asked the Government $ 15,200 million to cope with their difficult financial situation. The entity has a liability now exceeds its assets. Can you trust this entity can generate in the short term mortgage loans to recover the property sector? And what has happened across the Atlantic? Also bad news abounded in the last hours. Finland and Denmark officially entered recession, rising unemployment in the group of countries comprising the European Union (which stands at 7.6% of EAP) and the Eurozone (8.2% of EAP), Fall inflation rate in the EU (-0.6% in January) and in the Eurozone (-0.8% in January) with a higher risk of deflation and problems in Eastern Europe that forced the realization of a bank bailout together during which the World Bank, European Bank for Reconstruction and Development and European Investment Bank. Regarding the latter, the situation of the banking system in Eastern European economies of particular concern to some economies Western Europe since the majority of banks in Eastern Europe are in the hands of Western European entities (primarily entities Austrian, Italian and Swiss). Certainly the crisis is revealing the fragility of the developed economies and excessive level of exposure to risks of financial systems.

Already more than a year and a half of the outbreak of the crisis, it is difficult to determine the extent of it. Every moment becomes more comparable to the costs of the crisis of 30 'and it is not surprising that the excess in several respects. What new episodes will surprise us next week? Is also difficult to imagine how hard to imagine that once and for all, leaders of major economies decide to join to coordinate their economic policies. The private sector must do its share and commit to economic recovery. The "every man for himself" and showed not work Could he have learned the lesson?