A move by the world’s central banks to lower the cost of borrowing exhilarated investors Wednesday, sending the Dow Jones industrial average soaring 490 points and easing fears of a global credit crisis similar to the one that followed the 2008 collapse of Lehman Brothers.
For the past couple of weeks we have examined the critical issues facing some members of the EU. The need to properly address the unfolding crisis cannot be overstated, with a failure to calm developing market fears potentially impacting every other major economy around the world, including the United States.
WASHINGTON — The U.S. Postal Service said Tuesday it has lost $5.1 billion in the past year, pushing it closer to imminent default on a multibillion-dollar payment and to future bankruptcy as the weak economy and increased Internet use drive down mail volume.
Last week, after much angst and indecision, the 17 nations making up the core of the European Union (which fully utilize the euro as their common currency) agreed to a framework to resolve their financial crisis. In a nutshell, the countries involved needed to address three core issues.
NEW YORK (AP) — An agreement to contain the European debt crisis electrified the stock market Thursday, driving the Dow Jones Industrial average up nearly 340 points and putting the Standard & Poor’s 500 index on track for its best month since 1974.
Last week in a procedural vote to move along a piece of legislation, the U.S. Senate voted by an overwhelming margin of 79 to 19 to establish a mechanism to retaliate against countries that consistently and intentionally undervalue their currencies. While the legislation may seem evenhanded in its treatment of every currency manipulator, it is squarely directed against the Chinese government which is, to the surprise of nobody, keeping the yuan undervalued so as to encourage both production and employment in their domestic export sector. Needless to say, if the yuan is undervalued, then the U.S. dollar is overvalued, and if the Chinese artificially expand their export activity, then the U.S. will see its export sector unfairly restrained.
Republicans primary politics are moving front and center, and claims made by various candidates are being heavily scrutinized for their accuracy. Hopefully, most are factually correct while some are patently absurd, such as Michele Bachman’s claim that she can bring back $2 per gallon gasoline. Still others are of questionable accuracy, such as Texas Governor Rick Perry’s claim that Social Security is a Ponzi scheme and an outright lie to this nation’s young people, that is, the system will not provide them the benefits guaranteed under current law. Some other Republican presidential wannabes have stated this is totally untrue — particularly Mitt Romney — while others seem to waffle on the issue. So, who seems to be correct on this issue as it relates to Social Security?
NEW YORK — Lurching higher in its week of whiplash, Wall Street recorded one of its biggest gains of all time Thursday after investors seized on a few signs that the economy might just be able to avoid a new recession. The Dow Jones industrial average soared 423 points. It had already fallen 634 points Monday, risen 429 Tuesday and fallen 519 Wednesday. Never before has the Dow had four 400-point swings in a row.