A Towering Economic To-Do List for Obama

[groovedaddy]

The dismal state of the economy helped decide Tuesday’s presidential election. And it almost certainly will dominate the early days of the Obama administration.

Few presidents have entered office with an economy in such turmoil. Reflecting worries that the worst may not be over, the stock market continues to languish, with a 5 percent decline on Wednesday, leaving it 35 percent below its peak last fall.

The reasons are myriad: the financial system, though back from the brink, remains deeply troubled. Housing may no longer be in free fall, but plummeting values and rising defaults have impoverished many homeowners and burdened states with widening budget deficits. The once-mighty auto industry is on the verge of implosion.

Consumers who piled up credit card debt are pulling back, a major concern because their spending helped power economic growth in recent years. And with unemployment widely expected to increase to 8 percent or higher, from 6.1 percent, consumers are likely to tighten their belts even more.

http://www.nytimes.com/2008/11/06/business/06challenges.html?th&emc=th

[JohnWxy]

1. The worst is definitely NOT over. we're lookiing at an auto industry which is struggling to just

survive. Mismanagement has been their biggest problem but the Credit Catastrophe just might deliver the killing blow. People who would have been providing some sales now can't get credit because the banks who a few months ago were gambling on drivative instruments (Credit Default Swaps and Mortgage Backed Securities) the risks of which they didn't even know now won't make short term business loans to healthy businesses or consumer loans to anyuone except those with "golden" credit ratings. So the buyers of cars are just not there.

MOre rewards of the deregulation of the financial services industry. Thank you Republican party and Phil Gramm in particular for the CFMA 2000 (and Gramm's wife Wendy who along with lawyers of Wall Street banks wrote the CFMA - http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000">Commodities Futures Modernization Act.).