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Last week, Bush announced his economic stimulus plan, which was too little too late. The world markets reacted in the same fashion believing that Bush once again is not doing enough. As Bush continues to wastes billions on a failed war, the U.S. economy has tanked. Bush’s attention on what is important to BushCo and the American public are two completely different issues, the latter has been none of his concern. Now, Bush’s lazy solution has hit a resounding “no” from the world economy.

In the last few days every market around the world has closed negative. This is a bold statement that investors worldwide have zero confidence in Bush, his stimulus plan and the ability for the U.S. economy to bounce back. World stock markets are reacting negatively to Bush and his Johnny come lately attitude toward the U.S. economic problems and its effect on the global economy. Today to help stop the bleeding the Federal Reserve cut interest rates by 3.5 percent, the biggest rate cut in more than 23 years. This is not a solution; Bush and the Fed have taken a band aid approach to a hemorrhage. Bush has led the U.S. economy into the toilet and the world markets expect him to get the U.S. out of it, not react with another panic move.

Bush once again sees everything through rose colored glasses and believes that sending out a few hundred dollars to Americans will fix his failed economic policy. Bush believes that when the money is received, everyone will run out and shop. Well excuse me Mr. Bush but I believe most people will use the money to pay credit card bills which they have been living on. Or maybe Americans who are behind on their mortgage will use the funds to help catch up. Obviously the world markets are not buying this economic logic.

On Monday, Asia’s NIKKEI closed down -752.89. On Tuesday, the majority of the world markets are negative with some turn around in the European markets in current trading. The turn around is in response to the Federal Reserve cut but it’s still not a solution as recession looms over the U.s. ecomony.

WASHINGTON (Reuters) – The U.S. Federal Reserve on Tuesday slashed U.S. interest rates by a hefty three-quarters of a percentage point, the biggest rate cut in more than 23 years, in an emergency bid to lend support to a U.S. economy some fear is on the verge of recession.

• The action by the rate-setting Federal Open Market Committee took the key federal funds rate, which governs overnight lending between banks, down to 3.5 percent, its lowest level since September 2005. The Fed also lowered the discount rate it charges on direct loans to banks to 4 percent.

• The move comes amid a massive global stock sell-off brought on by deepening fears that a U.S. recession would drag the rest of the world economy down with it. U.S. stock markets, closed on Monday, appeared headed for a much lower open, although stock index futures pared some losses after the cut.

Reuters: Philadelphia Federal Reserve Signals Recession

• The Philadelphia Federal Reserve’s measure of manufacturing activity in the mid-Atlantic region plunged in January to a level that has typically signaled a U.S. recession.

Plotlines is a detailed look at retail, employment, oil, and bonds in the U.S. economic slump and recession.

Posted by nytexan January 22nd, 2008 | Category: Bush, Federal Reserve, economics, economy, recession | Subscribe to comments | Leave a comment | Trackback URL