Wall Street - the inevitable recession? by Ivana Bruderova

It seems to be very difficult period for the U.S. economy. After a short time of growing since November 2007 to December 2007 a new source of disappointing became the data from the largest banks on Wall Street such as Goldman Sachs. On Wednesday 16, the largest U.S. banks and financial institutions revealed earnings, so impatiently expected by analysts. But the results are not satisfactory.The latest news showed in the end of 2007 people had troubles with payments for everything from credit cards to cars, which means serious loss for banks.Another problem and one of the most warnings is extreme rise of unemployment rate which in December reached 5 percent from 4.7 in November. While in the last year analysts were talking about recession with the chance 1-in-3, nowadays it's 50:50. They compare situation with those in 2001 and 2002. Moreover, the market still has to deal with mortgage crisis and it's consequences. A prices of houses have fallen an average of 8 percent nationwide and people are nervous, they don't know what will happen tomorrow. The reason of payment troubles is undoubtedly higher cost of energy and food which the customers have to deal with. In 2007 the prices jumped 4.1 percent, which is the biggest increase in last 17 years. The agency's data showed the spending in Holiday season was poor, comparable with the year 2002. There are several prognoses how it will continue, each day can bring a positive or negative news.

by Ivana Bruderova for PocketNews (http://pocketnews.tv)

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Edited by Federica Paddeu