DOUBLE DIP RECESSION

DOUBLE DIP RECESSION (OR LONG TERM DEPRESSION?)

(Figures from ABC News)

Early in the day, the Dow was down more than 500 points. U.S. stock markets started a sell-off Wednesday after the Fed announced its latest effort to boost the economy but added that there are "significant downside risks" to the global economy.

Global stock markets followed the negative trend reflected on the U.S. markets.

Today was the biggest one-day point and percentage drop on the Dow since Aug. 10. It was also the biggest two-day point drop on the Dow since November 2008, when the economy was in the depths of the recession.

Today's drop erased a year of progress on the Dow. It closed at 10,739 on Sept. 22, 2010, just slightly higher than today.

WHY STICK AROUND WAITING FOR THE OTHER SHOE TO DROP? (Worst Week on Wall St. Since Oct 08)

Investors are clearly panicking about the threat of another recession in the U.S. and Europe. 

Utilities Safe Haven in Down MarketWatch Video

Markets Plunging After Fed ActionWatch Video

European leaders cannot seem to come up with a bold consensus to deal with the crisis in their economies, while there was yet another example of the bickering in Washington as GOP leaders failed to pass a stop-gap funding bill in Congress.

"There is a lot of bad news out there about the global economy and also a worry that no one is going to do much about it," said Hugh Johnson, chairman of Hugh Johnson Advisors. "It was a dark day on Wall Street."

Stephen J. Carl, principal and head equity trader with The Williams Capital Group, said that the markets continued to "snowball" after the Federal Reserve's cautious economic outlook on Wednesday, followed by a jobless claims report this morning. On Wednesday evening, the Dow Jones industrial average closed down 284 points at 11,125.

NATIVE ENGLISH SPEAKERS-TIME TO BEGIN CONSIDERING A GLOBAL JOB FOR TOMORROW?

 

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With Americans facing severe pressure from joblessness, falling home prices and stagnant incomes, it's unlikely this latest market tumult will do much damage to already fragile consumers. Still, it's yet another brick in the wall of cynicism and skepticism that's been built around the recovery generally, and the stock market specifically.

 

Sum of All Fears: Stocks, Commodities Tumble Over Risk of Recession, European Implosion

Depending on your perspective, the day's action could be attributable to a variety of factors, including:

Disappointment in Bernanke: "Today's market reaction is like a child throwing a tantrum after not getting what it wanted from daddy," gold trader Hal Paxton quipped via Twitter. The Fed's plan to spend $400 billion on 'Operation Twist' and a separate pledge to being buying mortgage-backed securities apparently left some traders wanting more — of what I have no idea. (See: Fed Action Fails To Boost Animal Spirits: "Marginally Helpful," Says Former Fed Governor)

Risks of a Global Recession: Weak purchasing managing index reports out of China and Europe, along with another disappointing U.S. jobless claims report, reinforced concerns about the global economy. "A recession is at this point unavoidable," writes NYU Professor Nouriel Roubini. "Only issue now: Will it be a mild G7 recession or a severe recession plus global financial crisis as bad or even worse than the 2008-09 one?"

 

With the stronger dollar overseas now is the perfect time to invest in something that has the greatest rate of return. YOURSELF!

 

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