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China Stocks Priced for Hard Landing Signal Rally to Top Brokers

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The lowest Chinese stock valuations since economic growth collapsed three years ago are a sign to the nation’s biggest brokerages that it’s time to buy.
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U.S. Economy Heading for a Hard Landing

December 7th, 2010 Comments off

U.S. Economy Heading for a Hard Landing
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Home> Money> Invest> U.S. Economy Heading for a hard landing for U.S. economy Heading for a hard landing ? | Posted: October 22, 2008 | Comments: 0 | Views: 127 | it]]> Ask a Question Ask invest our experts your questions here … 200 characters left Related Questions What are the benefits of investing in equities Who? was the inventor of the share (stock) market) Is the stock market overreact Journal of Finance, please advice on the shares held in Nairobi Stock Exchange is probably good in the short-term Syndicate this article to clipboard U.S. Economy Heading for a hard copy of landing

: Australasian Investment Review

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Article Source: http://www.articlesbase.com/ – U.S. Economy Heading for a hard landing

The U.S. economy is in far worse shape than many people think in the U.S., and for a hard landing position.


American consumers, the change for 70% of demand and consumption in the huge, $ US14.4 trillion economy, are getting in trouble and cutting back spending be offset by lowering transport services.


In fact the credit cuts are now much deeper than anyone thought after the release of up to date figures.


The IMF said overnight that the U.S. seemed to sink into recession, it said.


The fund said in its latest World Economic Outlook that the U.S. is now ready to expand, 1.6% this year and a bare 0.1% in 2009.


, was that an increase of 0.3% and a decrease of 0.7% respectively from the prior forecast three months ago, in which the IMF had raised the April WEO forecasts, citing a improve economic conditions in the U.S..


This improvement this year was 2.8% in the second quarter relates to economic growth.


The estimates were before the latest figures on consumer credit, however, also reduce a history of U.S. consumers to reduce or credit, to say the lifeblood of the economy has.


store sales figures for September by some large retailers overnight sluggish growth for most, that downturn was for those selling more expensive products such as department stores.


But it is no wonder, after the Fed’s previous report.


figures Tuesday night by the Federal Reserve on consumer credit show the largest decline in the history of the recorded figures.


At the same time major industrial nations, Alcoa, a 52% decline suffered in the third quarter results and has survived to the mighty General Electric in the removal of a share repurchase program for capital.


The national center for U.S. auto dealers warned that 700 would be out of business this year alone, and more would follow in 2009, when the credit was relaxed do not freeze soon. Car sales fell 27% last month and freeze the type of credit works that will drop to increase in the coming quarter.


And in a dramatic move, the Fed expanded the boundaries of its “lender of last resort” understanding by displacement temporarily frozen $ US1.6 trillion commercial paper market, which from day to day lifeblood for American business.


At the same time, Fed chairman, Ben Bernanke held out hope for a rate cut, but said the U.S. economy was heading into tougher times.


The Fed said it would create a new Commercial Paper Funding Facility to purchase three-month debt from banks. and non-financial companies

It is probably one of the most important decisions, because if this vital short-term debt that may not be for U.S. companies (Employers) rolled at maturity, the American economy will be crunched to a halt.

show
The move desperately figures that 28% of the market would fall due this week and another 12% next week was necessary.


The Fed’s figures last Friday showed that in the week ending last Wednesday, the market had already $ US215 billion contract in the past three weeks and nearly all new lending was done overnight.


that 28% will not be rescheduled to 40% of the huge amount, the U.S. economy crunched through October at the latest, it was the U.S. central bank to act.


Without moving the Fed, a type of bank, the U.S. economic crunch to a complete standstill in a matter of weeks, throwing hundreds of thousands of people out of work and setting off a domino chain of corporate bankruptcies in all sectors.


The freezing of the commercial paper market, why people like Alcoa and GE have cut their share buybacks and why the Bank of America lowered its dividend by 50% and is looking for up to $ US10 billion increase in new capital

It is on the acquisition of Countrywide Financial Services and Merrill Lynch and the additional burden on them to support his finances impose. but it’s like all other banks and has extensive reduction in lending.

But it is clear to consumers, the engine of the U.S. economy have been denied loans by banks and other lenders even before the outbreak of the recent phase when the credit crisis turned to one it freeze.But is nothing you can do Fed immediately to ease the pressure on consumers: each week, tens of thousands of them losing their jobs, their homes, after they cut their pay cut and hours and are denied credit at a rate not thought possible until the Fed releases the credit data for August, a month before the crisis with the tide of failures and bailouts in the U.S., starting with Lehman Brothers worsened.


The Fed reported that consumer credit fell by $ US7.9 billion in August, the biggest drop since the statistics began to be collected in 1943, up to $ US2.58 trillion.


Bloomberg said that economists an increase of $ US5 billion in consumer credit forecast in August, it was the Fed’s report as a complete shock to the market.


Total consumer credit fell at a rate of 4.3% in August, which since January 1998.


revolving debt such as credit cards of $ US612 million in August and non-revolving debt, including auto loans fell, fell from $ US7.3 billion €.


That was a month before the fall dive 27% in the U.S. auto sales last month, it is likely that consumer loans dropped sharply again in September.


The news of the Fed move and the sharp contraction in consumer credit (one of the Fed, “Key Economic Indicators”) makes it easier to understand the contents of a speech overnight by the Chairman, Ben Bernanke, in which he painted a bleak picture of the U.S. economy.


He would have known about the move to try and stop the rot in the commercial paper market and the sharp drop in consumer credit, it was no wonder he said:

“The economy had shown signs of slowing even before the recent upsurge in financial-market tensions.

As is the case for some time, the housing market remains a major source of weakness in the real economy and be in the financial markets. But the slowdown has spread economic activity outside the housing sector.

“Private wage and salary agreements have continued to close, and the decline in employment, together with earlier increases in food and energy prices have eroded the purchasing power of households. This sluggishness of real incomes, together with tighter credit conditions and declining household wealth, now shows through more clearly on private consumption.


“In fact, since May real consumer spending are significant. Awarded the meantime, the economy worsening sales prospects and a heightened sense of uncertainty have begun more heavily on investment spending as well.

br /> “The intensification of financial market turmoil and the further deterioration of the functioning of credit markets should also increase the restraint on economic activity in the near future. “


” All in all, economic activity is expected to later this year and into next be subdued year. The increased turbulence in financial markets that we have experienced of late may well lengthen the period of weak economic performance and further increase the risks to growth.


“To support growth and reduce the downside risks, continued efforts to stabilize financial markets are essential. The Federal Reserve will continue to use its powers to the functioning of the market and liquidity . better “

Meanwhile, the chairman of the National Automobile Dealers Association says the credit crisis and economic problems are likely to 700 dealerships in the U.S. lead to go under this year.


the Automotive Press Association in Detroit speech, Annette Sykora said quick action will be necessary to ease the squeeze and restore consumer confidence and help industry.


fund estimated 94% of American car buyers make their purchases, Mrs. Sykora says but even those can not with good to high scores and solid credit records finance.


Dealers with good credit are having difficulty financing their inventories.


It’s the same story in home lending and in credit cards where credit lines and revolving credit line agreements are terminated or denied.


According to the National Auto Dealers Association, there are around 20,000 auto dealers in the United States. Over 430 dealers in the past year, closed and 295 closed in 2006.


The estimate of 700 dealers out of business does not include new dealers that will enter the market.


Some buyers are not required, because they fear for their jobs or can not be the right vehicle if you are looking for more fuel-efficient models.


Whatever the cause, it means consumers spend less. September retail sales figures should be made in about 10 days or so and probably miserable reading, along with consumer spending figures a little later, in October

. IMPORTANT: AIR reports about financial markets and investment products in the widest possible sense. The AIR website and all content is for general information only, and are treated as such, the specific needs, investment objectives and financial situation of the individual to each user account was not taken. Individuals should therefore talk with their financial planner or advisor before making any investment decision.

From “http://www.articlesbase.com/investing-articles/us-economy-heading-for-a-hard-landing-613317.html”

(ArticlesBase SC # 613 317)

Australasian Investment Review About the author:

Australasian Investment Review (AIR) is a free service, the daily news global financial markets with a focus on Australia, New Zealand and Asia. Every day our team of experienced journalists present you with a concise expert opinions and analysis on trends and backgrounds to digest that matter in these markets. Subscriptions are at aireview.com.au

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