2008: The year when sh!t hits the fan
1-17-08: The year 2008 started out bad and continues to get worse. The financials are in turmoil. Large American companies are basically begging for cash to help keep their business going. Never in my wildest dream would I have imagine the day when I would see companies such as Citi Group, JP Morgan and Merrill Lynch pandering for cash from foreign governments. This illustrates the severity of the current mess the U.S economy is facing. Unfortunately, I see more bad news ahead.
The government is now talking about a stimulus package which could be in the $150 billion. In my view, putting a few hundred bucks in the hand of consumer probably won’t help much. The problem is deeper than consumer spending. The job market is deteriorating, inflation is high, credit is hard to obtain and unemployment is rising. While getting a check from Uncle Sam so we buy an extra tank of gasoline for our SUV will help a tiny bit, it is not going to be nearly enough to make any impact on the overall economic situation.
What folks fail to realize is recession is a natural part of an economic cycle. Only time will heal this. A short term infusion of cash will not do much. The government is only doing this for political reason.
