A not so happy new year awaits us
1) In the third quarter of 2009, delinquencies hit 6.25% of mortgages in the US – about three times the historical norm
2) A recent study McKinsey research found that the recession has changed the US consumer behaviour as more and more of them are opting for cheaper products
3) Retail sales for November actually fell from the month before, according to the International Council of Shopping Centers. The drop of 0.3% is a far cry from the minimum 5% growth the experts expected. Four out of five retailers missed their forecasts, including Macy’s (down 6%), Abercrombie & Fitch (17%) and Saks (26%)
4) Last weekend, another six US banks failed. This brings the yearly total to 130. This will cost another USD 2.3 billion to FDIC’s - a coffer that’s been empty for months now
3) Bernanke has put a spanner of all hopes of a strong economic recovery by stating that despite the recently released better unemployment numbers, the recovery would be painfully slow and he does not foresee any change in their interest rate stance
4) Given the experience of earlier recessions, the unemployment rate in US is unlikely to have peaked (refer to refer to my recently published article in Dalal Street Journal). It might take several months before it peaks and then start to decline as jobs start getting created. Not surprisingly, Bernanke said the U.S. economy still faced headwinds and unemployment could stay high for some time, playing down the impact of last Friday's stronger-than-expected jobs report
5) The global economic and financial crises may be close to an end but the fiscal crisis in a number of top-rated countries could last for "several years," ratings agency Moody's Investors Service said today. Moody’s Investors Service said its top debt ratings on the U.S. and the U.K. may “test the Aaa boundaries” because their public finances are worsening in the wake of the global financial crisis
6) Fitch Ratings cut Greece's debt rating to BBB+ from A- with a negative outlook, the first time in 10 years a major ratings agency has put Greece below an A grade, citing fiscal deterioration in the euro zone's weakest member. The cut followed a Standard & Poor's report that Greek banks faced the highest risks in Western Europe
7) Recently, S&P's has decided to put both Greece and Portugal on negative watch. Coming in the backdrop of the Dubai crisis, this lends credence to the belief that the crisis is far from being over and has the potential to implode elsewhere in the globe
Reads like some sequel of exorcist, eh?
