So… Greenspan is to the US Economy what Kissinger is to US Foreign Policy?

The Federal Reserve can’t do much about a recession in normal times, and a credit crunch with a liquidity crisis aren’t normal times. The housing bubble pulled the economy out of the recession in 2001, but there were no job gains to solidify the fundamentals. Getting more money into the hands of people who will spend it will help on many levels, but job creation is even more important, because tax cuts are worthless to people without a job.

Market records 10th slump in a row
Strong recession fears in the United States have dragged the Australian share market lower for the tenth consecutive session.

About 11:45am the All Ordinaries index had lost 147 points or 2.5 per cent to 5,709.

The ASX 200 was down 137 points to 5,658.

All sectors slipped into the red in the first two hours of trade with mining stocks among the hardest hit.

BHP Billiton was down almost 5 per cent while its rival, Rio Tino, lost about 5.5 per cent.

Macquarie Group was down about 2.3 per cent.

The Australian dollar was buying 87.5 US cents.

Merrill Lynch losses hit Wall St
There have been sizeable falls on American equity markets in response to another big banking loss and more concerns about the US economy.

Merrill Lynch has unsettled the market by making write-downs of about $US14 billion (nearly $16 billion) related to the mortgage market meltdown, and booking a quarterly loss of almost $US10 billion.

It has been the worst quarter in the history of the world’s biggest stock-broking firm.

On the economic front, a survey from the Philadelphia Federal Reserve indicates factory activity in the mid-Atlantic region has contracted more than expected this month, with its index of business conditions registering its sharpest drop in seven years.

At the same time, Federal Reserve chairman Ben Bernanke has told a Congressional committee a fiscal stimulus package could aid the economy, and reinforce the central bank’s cuts in interest rates.

New figures out of Washington show a big 14 per cent slump in new housing starts across the US.

On the New York Stock Exchange, the Dow Jones industrial average has closed down 307 points at 12,159 – a slide of 2.5 per cent.

The high-tech Nasdaq composite index has dropped 48 points to 2,347.

The British market is still in retreat – London’s FT-100 index has fallen another 40.5 points to 5,902.

Yesterday in Australia, it was day nine of the decline. The All Ordinaries index shed another 14 points to close at 5,857.

The resource sector was the major drag on the overall market, with BHP Billiton shares down $1.02 to $36.50.

US central bank ready to tackle recession risks: Bernanke

The chairman of the US Federal Reserve, Ben Bernanke, has voiced his support for an economic stimulus package to avoid a recession.

Wealthy may be next in line in US home crisis

A house in the wealthy Chicago suburb of Hinsdale is far beyond the reach of most Americans.

Unfortunately, it may also now be too expensive for some of the people who already live there.

Sharon Sodikoff, a broker associate at local real estate agency Prudential Homelife Realty, says some residents may have to sell up.

“There is a section of the population here that over-extended themselves to buy here and then keep up the facade of wealth,” she said.

“In the next year or so they’ll be forced out in dribs and drabs.”

The Headrick-Wagner Consulting Group says the average home sale price in Hinsdale in the 12 months to September 30 last year was around $US1.15 million ($A1.3 million).

With a picturesque little downtown area and large, expensive houses, the suburb seems a world away from the housing slowdown that seems to have brought the US economy to the brink of a recession.

But even there, far from the housing crisis’ epicentre, high earners with good credit may be heading for trouble as their adjustable rate mortgages (ARMs) adjust beyond their means, local real estate agents and others say.

In a normal housing market they would be able to sell, but now they are stuck.

More on this story here:
Wealthy may be next in line in US home crisis

Aust traders brace for Wall St fallout

Australian markets are expected to struggle in early trading following a tough session on the New York Stock Exchange.

Another dose of financial and economic worries resulted in Wall Street’s Dow Jones index closing 307 points lower.

The slide was mirrored on Australia’s overnight futures market, which recorded a 2.7 per cent slump.

The United States selling was fuelled by a $US10 billion quarterly loss at broking firm Merrill Lynch, and gloomy Congressional testimony from the Federal Reserve head Ben Bernanke, who endorsed a Government spending plan to stimulate the flagging US economy.

BT Financial Group chief economist Chris Caton has told ABC Radio’s AM program there is an even chance of recession in America, which would shave some growth off the Australian economy.

“We are probably growing somewhere around 3.5 per cent at the moment – it may slow us to less than 3 per cent,” he said.

“But that may take some of the pressure off the Reserve Bank in Australia to raise rates again.”

All the above are from here:
ABC Business News

BTW, I think Bernanke is an idiot and is in way over his head!

People have said for years, Kryten, that “any time the US sneezes, the rest of the world catches a cold”, so things look pretty grim for the world with the US on the verge of “pneumonia”. The financial institutions are pretty much all multinationals now, so everyone has the opportunity to participate in the Ponzi schemes operating in other countries.

So, how’s that globalization working out for you, world?

Investors have wiped $35 billion off the value of the Australian share market today after steep losses on Wall Street overnight.
The domestic market dropped for the eighth consecutive session.

Citigroup has reported a quarterly loss of $11.1 billion and write-offs of more than $19 billion due to the sub-prime mortgage market collapse.

The US President has called on OPEC nations to release more oil on the market, as soaring prices are hurting the world’s biggest ecomony.

Democratic White House hopeful Hillary Clinton has accused United States President George W Bush of “begging” for cuts in oil prices in “pathetic” encounters with Gulf leaders.

A sharp drop in consumer confidence is seen as insufficient to spare home and business borrowers another rise in official interest rates next month.
The Westpac-Melbourne Institute index of consumer sentiment has plunged 8.3 per cent to its lowest level in 14 months.

If interested, you can read the details here at the (Australian) ABC:
ABC Business News

Cheers! 🙂

Cheers!

We’re in agreement on the sales tax idea, at any rate.

Seeing as this has been most likely a distraction already I’ll stop.

I’m totally unaccustomed to seeing the property tax as anything other than a local tax, so I can’t judge the implications, especially in light of things like California’s Prop 13 and Florida’s Save Our Homes which distorts the system all ready.