Anyone questioning the effectiveness of the Obama administrations attempt at righting the U.S. financial ship (which was taking on significant amounts of water pre-Obama), should read this article from London's Financial Times (link). Here is a portion of the article which clearly spells out the current state of financial affairs in the U.S.....
"...his stimulus bill has clearly made a significant contribution to stabilizing the economy since its passage in February. His cap and trade bill to reduce carbon emissions passed the House of Representatives in June. He has set in motion significant overhauls of the financial regulation and health care.
Second quarter gross domestic product declined by only one percent, compared to 6 percent in the first quarter. House prices have stopped falling, and in some markets, are actually rising; sales in new homes actually jumped 11 percent from May to June. Big banks are recovering, and some have made enough profit to pay back the borrowed TARP funds. The S & P 500 index is up 48 percent from its low in early March. Best of all, the nation lost the fewer jobs in July than most pundits predicted. The unemployment rate has actually declined slightly to 9.4% (much to the conservatives chagrin, who predicted 10%).
Are we out of the woods yet? Clearly not, although there is plenty of statistics to suggest President Obama has stopped the bleeding. Needless to say, the recovery program has involved significant amounts of spending, some of which, such as TARP and the bailout of some financial institutions, we fully expect to recover, and are already receiving some pay backs from the larger banks already. The much maligned "cash for clunkers" auto buy back program has proven to be a huge success, riding our landscape of older high polluting vehicles, getting cash back into the economy, and the only current issue is spot shortages of automobile inventories at local participating car dealerships. Is an income tax hike in the offing? Maybe. It would be a short term solution to reducing the deficit, although small enough on the lower to middle class to have a marginal effect on economic sales growth. Clearly, our financial health will get a much needed shot in the arm once we reduce the amount of money spend waging two "wars" in the Middle East, which has, and continues to be draining our economy. Out of the woods? Not nearly, although considering the positive numbers in our economy today, it night be a decent time to consider moving a small portion of our portfolios back into the stock market in smart, conservative blue chip stocks. Anyone who follows the market has seen significant increases in some sectors, and anyone smart enough to buy B of A has reaped major profits.
The point being that it is time for the nation to get their chins up, and be more positive about the future. All of this negative rhetoric is only serving to delay our recovery. If we can achieve a paradigm change in attitudes, consumer confidence will grow and 3rd quarter numbers will be even more positive than the 2nd. Out of the woods? No, but we are clearly on our way.
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