Today, is the day of reckoning for Japan’s economy. With the economy shrinking and companies shrinking budgets, profit outlook, and layoffs, Japan is now technically in a recession.
Japan’s Quarterly GDP contracted at -.1%, a sure sign that the economy is going in the opposite direction. The annual GDP shorted 1.6% from last year, but the economists had pinpointed it right on the nose. Tertiary Activity has also fallen .6% too.
So, not only the big news in Wall Street is not only the bailout fiasco with Hank Paulson, but also overwhelming concerns for the auto industry.
The Big Three are getting their asses handed every which way, and on the very reality that they might not be around much longer. Washington as of now is debating a $25 Billion care package to “save” the car industries, jobs, and anything else related to automobiles. Of course there isn’t any rescue package without conditions, and Washington would like to push the Big Three to start rolling out more efficient automobiles and also take care of immediate issues within. Possibility that CAFE standards will be interwoven into the rescue deal?
Well, let’s only hope for the best outcome, because of the multitudes of jobs that are on the line.
On news of this company and that organization laying off people left and right, we can safely say, that the US is in a recession, which probably could be cycled out within a year or two. The real possibility of the US falling into depression is what scares me.
George Soros, mentioned late last week that everybody is at high risk of falling into a depression. The problem with the depression issue, is that despite the government interventions, “new deals” and certain care packages that are issued, a depression can really rob some time from us.
The great depression started with Black Monday 79 years ago in 1929. The worst of the effects were not really felt until a few years later, and didn’t fully recover until a decade later in 1939, when Europe went to hell in a handbasket with World War II.
Let me fill you in on what you should know for Forex Market related news today:
For one, keep in mind that traders will keep heavily in mind the USDJPY and EURUSD. So far so good for the USDJPY, as there was a small upspike within the 96 yen range. Nothing though compared to widespread blowout that was experienced when the US Federal Budget Balance was an Epic Fail late last week.
The EURUSD will keep their eyes peeled on the Trade Balance announcement, which they expect a deficit of 5.7 Billion.
For the United States, Henry Paulson is going to blow the usual hot air and discuss the bailout in doomsday style commentary. Capacity Utilization, Industrial Production, and Empire State Manufacturing will be the big news shots for the day.
Keep your chin up and Trade on!!!
Tom Howell
GoForexTrade.com
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