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[grizzley]

Its ugly on both sides of the pond......

01/23 Schlumberger Profit Dips as It Sees Weakness Ahead
01/23 Toyota considers job cuts - source
01/23 Capital One downgraded to reduce
01/23 GE Profit Drops 43% Immelt Backs Dividend, AAA
01/23 Samsung Electronics Reports First Quarterly Loss
01/22 Toyota's Toyoda Said to Plan Replacement of Managers
01/22 EBay shares fall on first-time earnings decline
01/22 Lockheed Martin steers Street lower on 2009 profit
01/22 Intel shedding up to 6,000 jobs
01/22 Microsoft Cuts 5,000 Jobs as Recession Curbs Growth
01/22 Sony Projects Record Operating Loss as Demand Falls
01/21 BHP Billiton to cut 6,000 jobs
01/21 United Airlines to cut 1,000 jobs
01/21 Ericsson's profit drops 31% on restructuring costs
01/21 United Technologies' quarterly profit edges up 8% on aerospace
01/21 Toyota Surpasses GM as Biggest Automaker Amid Slump
01/21 Sony's 1st Loss in 14 Years Looms as Analysts See Forecast Cut

[KrispyKoala]

It's getting increasingly dodgy downunder too these days Griz.

Up until now Australia has been pretty well insulated from the worlds financial woes, because of China's huge mineral expenditure here.

News yesterday of China's slowdown caused havoc on our stock markets. There's been no mention of Australia headed for recession until this week when numbers were crunched re China's economy. Somethings starting to crack, even our illutrious leader and chronic world traveller PM has cancelled plans for yet another world junket. When he cancels a trip abroad because of our economic woes, than something's wrong.

[lawrence]

Any idiot can tell you that Chinas economy is going to hell. They are totally dependent on exporting cheap goods to the west and the west is not buying. And if Australias economy is dependent on Chinas then ...do the math.

[Scooby Do]

Jan 24, 2009 4:04:12 GMT lawrence said:

Any idiot can tell you that Chinas economy is going to hell. They are totally dependent on exporting cheap goods to the west and the west is not buying. And if Australias economy is dependent on Chinas then ...do the math.

If everybody wants to buy, and everybody wants to sell, why is there a recession?

[yord]

Very few still trade with up front payments. I would say all companies now trade with credit, they dont have the money until theyve sold the goods they are buying in order to pay off their supplier. Unfortunately you can make more money by sinking the company than paying the supplier off.

[tarrant]

Too many companies and individuals got into the habit of living on credit. Their profits were sufficient to cover the costs of interest.

Banks were happy as they were making huge amounts on that interest. Businesses were happy as they could borrow to buy the next shipment and sell to customers who borrowed to pay.

Similar situations arise whenever there is a boom in the economy until some one pushes the boat out just too far.

In this case, some banks decided there was money to made by lending to people who couldn't afford to repay. Presumably the banks assumed either, these people would use their new asset to borrow further to set up their own businesses or that governments would pay in the form of welfare.

But it didn't work. Huge amounts of debt became outstanding. Banks panicked and withdrew lending across the board. Businesses couldn't pay their suppliers and so laid off staff. Staff couldn't pay their debts and a spiral began.

In actual fact, the situation has already corrected itself and economies all over the world should, in theory, be able to quickly recover.

However, two of the largest economies, the UK and the USA are now suffering a backlash from their press.

In the US, this is largely because of the Bush factor. This has been carried over to Obama in the form of a reaction by some pro-Bush sections.

In the UK this is largely because of the Hague factor. William Hague, the Tory's first leader after they lost in 1997, and still the defacto captain of the Tory ship, has used pessimism as a campaign tactic. For much of the 10 years this had little effect. Principally because so many government policies shadowed Bush. The Tories see the US Republicans as their liege lords.

Bush is discredited and now out of office. The Tories no-longer feel any constraints on criticising the US.

Banks remain nervous about lending. They are conscious of their culpability and fear any further problems will reflect upon them.

Businesses can't buy because they still owe. So they contract and people become unemployed or fear they will be soon.

So workers cut back on their spending trying to pay off their outstanding debts.

Eventually, the situation will right itself. Debts will be paid off. Spending will re-start. Jobs will be created again and the economy will once again boom.

The Paper Tiger that is the UK Tory party will find itself, once again in the doldrums.

The only solution for the Tories and for the world economy is for the Tories to get rid of Hague and come up with some real policies.

But that will take some soul searching by the Tories and I fear they don't have one.

[grizzley]

The engine that has started and carried the world's economy has been the United States for the past 60 years. America always had one "commodity" that others couldn't match....customers. With the current economic recession spreading world wide, who is going to be the knight in white armor to drag the economies out of recession? The debt load in the US both governmental and personal is a all time highs. I see that the third US bank has failed in the 24 days of this new year. We are in it right now. How long is the question.....
www.bloomberg.com/apps/news?pid=20601087&sid=aIFeOX9TTZbE&refer=worldwide