The Economic Crisis

This one started in the United States in the form of bad mortgages and spread
gradually to the rest of the World. The banks that are usually on the side of caution moved aggressively in the game and got burn big time. You look at some of the numbers and they are just staggering. The Dow has tested the just below 8000 mark. In the late 90s the Dow was at 12000.The NASDAQ is now just around the 1500 mark. In the era of the dot-com boom is was at 5000.The US economic shrank 3.8 percent for the fourth quarter of 2008,though for the year is grew slightly. The US government and other countries around the world are throwing the concept of pure capitalism down the drain and going for bail out packages to rescue the situation. There was the 700billion dollar package to bail out Wall Street and the 787billion dollar package for the whole economy which was a hard sell to the Republicans in both house of Congress.The bill did pass though with few republicans voting for it. Throughout the developed world there has been similar packages to help out thought not in the scale of that of the US. Some of the countries that have been hit hardest include the nation of Iceland that now has a female Prime Minister at the helm. She is also of a different kind of sexual orientation and she is opened about it.This situation has been compared to that of the late 1920s and early 1930s,the great depression in case you missed it in your history lessons.Other countries that were suppose to pick up the slack with a US slowdown are beginning to feel the pinch also.Recently about 26million migrant workers in china lost their jobs.There is something that took place with the price of oil that completely changed the manner in which this crisis was going to play out when it started in late 2007.The price of old was rising and peaked around the 147 dollars a barrel mark.High oil price was a big boost for oil producing countries such as OPEC countries,Russia,Brazil,China which have very large oil reserves.Oil prices went down in a hurry though and the above countries did not get as much benefit from the oil prices as I though they would.This is why the crisis I believe has hit a global scale now.The rest of the world now has to watch closely what is taking place in the US because just like in the part I believe that is the country that is going to either take the rest of the world under or pull us out of the current economic crisis.Latest figures show that the US economy shrank by about 6.2 percent during the fourth quarter of the year 2008.General Motors has been in trouble for some time now and the government is taking a different approach after giving it a lot of bailout money.There is take of a bankruptcy filing which will be major news if it actually happens.That fact that the government is letting GM go this direction is prove that they have figure out that not all the companies could be bailout.
Chrysler was the first of the major automobile companies to declare bankruptcy with the barking to the federal government.GM might not be too far behind.Ford seems to be weathering the storm pretty well.So far they have been the lone company out of the big three automakers not to have taken government money.
General Motors is expected to file for chapter eleven bankruptcy on Monday the first of June 2009 at a time when their stock price is down to less than a dollar a share.At its peak the stock price was at 93 a share back in the year 2000.The plan is for them to reemerge as a much leaner and more efficient company.