Economy Continues To Worsen
The economy continues to be a burden to many Americans. Warren Buffet, in his annual report to Berkshire Hathaway shareholders, reported that the economy will continue to be in “shambles for the rest of 2009” and possibly even further than that. Warren Buffet is considered to be the greatest investor of all time. In 2008 Berkshire Hathaway reported its worst year ever. Berkshire Hathaway Class A stock once traded at a hefty price of $140,000 and on Friday February 27, 2009 closed at $78,600. Berkshire Hathaway has lost around 40% of its value in the last year.
The stock market continues to decline as investors worry about the government nationalizing fledgling banks such as Citigroup or Bank of America. This would essentially wipe out the value of all outstanding common stock of those institutions should the government completely take over the banking industry. The likelihood of this happening is very unlikely. However, recent comments made by Senate Banking Committee Chairman, Christopher Dodd, said that nationalizing the banks was not completely out of the question. This has sent the Dow Jones Industrial Average into a downward spiral. Investors are very weary about the government getting involved into the banking system. The consensus on Wall Street is that government is not capable of running a complex banking system. Federal Reserve Chairman Ben Bernanke than commented that it would be very unlikely for the government to nationalize the banks. The Dow Jones Industrial Average is down significantly in 2009.
In recent news as well, the failing insurance giant American Insurance International will receive an additonal $30 billion in federal assistance. This money is supposed to be taken from the TARP. AIG is said to be reporting the biggest loss in its corporate history. This loss is expected to come in at around $60 billion.
I would have imagined that our country would experience a financial crisis such as this. I can remember my 8th grade history professor, teaching the class about The Great Depression. One of the things she emphasized was that our country would never have to suffer like that again, because of government intervention. That always stuck in my mind. Today, we are seeing her theory being tested at its fullest. The nation is being divided by the massive amounts of government intervention into our economic system. There are many that feel that the current stimulus package is filled with “pork”. The Republican Party is blaming the Obama Administration of proposing useless jobs that would not really have any longevity. The Obama administration defends the stimulus package saying that it will create long-term jobs in both the public and private economic sectors. The Obama administration claims that their economic stimulus plan will keep the unemployment from rising about 10% and will eventually bring it down to more manageable levels.
Like most Americans, I am very anxious for this recession to be over. This recession has effected the lives of many people. People who were ready to retire have had to put their plans off for several more years. Everyone has been affected one way or the other. The loss of jobs will continue to cripple our economy until the bleeding is stopped. In all, I think that our country will survive. This is not the first time our country has been in a crisis if you look at the headlines from the last 30 years. Doom and gloom is heard everywhere during bad times. However, our country has survived two World Wars, The Great Depression and onslaught of recessions and hard times. In the end, our country will prevail and come back stronger than ever.
In these hard times, identity theft is on the rise. Protect your identity by visting our sponosr below.
The economy continues to be a burden to many Americans. Warren Buffet, in his annual report to Berkshire Hathaway shareholders, reported that the economy will continue to be in “shambles for the rest of 2009” and possibly even further than that. Warren Buffet is considered to be the greatest investor of all time. In 2008 Berkshire Hathaway reported its worst year ever. Berkshire Hathaway Class A stock once traded at a hefty price of $140,000 and on Friday February 27, 2009 closed at $78,600. Berkshire Hathaway has lost around 40% of its value in the last year.
The stock market continues to decline as investors worry about the government nationalizing fledgling banks such as Citigroup or Bank of America. This would essentially wipe out the value of all outstanding common stock of those institutions should the government completely take over the banking industry. The likelihood of this happening is very unlikely. However, recent comments made by Senate Banking Committee Chairman, Christopher Dodd, said that nationalizing the banks was not completely out of the question. This has sent the Dow Jones Industrial Average into a downward spiral. Investors are very weary about the government getting involved into the banking system. The consensus on Wall Street is that government is not capable of running a complex banking system. Federal Reserve Chairman Ben Bernanke than commented that it would be very unlikely for the government to nationalize the banks. The Dow Jones Industrial Average is down significantly in 2009.
In recent news as well, the failing insurance giant American Insurance International will receive an additonal $30 billion in federal assistance. This money is supposed to be taken from the TARP. AIG is said to be reporting the biggest loss in its corporate history. This loss is expected to come in at around $60 billion.
I would have imagined that our country would experience a financial crisis such as this. I can remember my 8th grade history professor, teaching the class about The Great Depression. One of the things she emphasized was that our country would never have to suffer like that again, because of government intervention. That always stuck in my mind. Today, we are seeing her theory being tested at its fullest. The nation is being divided by the massive amounts of government intervention into our economic system. There are many that feel that the current stimulus package is filled with “pork”. The Republican Party is blaming the Obama Administration of proposing useless jobs that would not really have any longevity. The Obama administration defends the stimulus package saying that it will create long-term jobs in both the public and private economic sectors. The Obama administration claims that their economic stimulus plan will keep the unemployment from rising about 10% and will eventually bring it down to more manageable levels.
Like most Americans, I am very anxious for this recession to be over. This recession has effected the lives of many people. People who were ready to retire have had to put their plans off for several more years. Everyone has been affected one way or the other. The loss of jobs will continue to cripple our economy until the bleeding is stopped. In all, I think that our country will survive. This is not the first time our country has been in a crisis if you look at the headlines from the last 30 years. Doom and gloom is heard everywhere during bad times. However, our country has survived two World Wars, The Great Depression and onslaught of recessions and hard times. In the end, our country will prevail and come back stronger than ever.
In these hard times, identity theft is on the rise. Protect your identity by visting our sponosr below.
Labels: AIG, American Insurance International, Berkshire Hathaway, economic stimulus package, Federal Reserve Chairman Ben Bernanke, Senate Banking Chairman Christopher Dodd, Warren Buffet
Credit Card / Financial news blog post by Todd Holliday at 6:12 PM 