An abundance of bad news is out about our economy
The Nasdaq opened Monday down 64, or 2.5 percent, to 2,468 after last week’s news that the S&P downgraded the United States’ credit rating from AAA to AA-plus because Congress couldn’t agree on a satisfactory debt-ceiling package that included sufficient spending cuts. It is sending shock-waves throughout the markets in an economy that was already on shaky ground. The Dow Jones Industrial average on Monday opened down 192, or 1.7 percent, to 11, 252. Stocks are retreating, but the gold price is skyrocketing as investors flock to that commodity as a safe haven.
Although former Federal Reserve Chairman Alan Greenspan thinks Europe is worse off than the United States, others are painting less rosy pictures. Economist Nourie Roubini, chairman of Roubini Global Economics and co-author of Crisis Economics, writes in today’s Financial Times that things are bad both here and abroad, and the “misguided decision by Standard & Poor’s to downgrade the U.S. at a time of such severe market turmoil and economic weakness only increases the chances of a double dip and even larger fiscal deficits.”
Financial Times Managing Editor Gillian Tett recently told genConnect at the 2011 Aspen Ideas Festival that the pessimism about the economy is definitely justified.
“If you look back at periods of early financial history, whenever you’ve had a credit bubble of the size that we’ve lived through, it always takes a long time for economies to adjust afterwards and anyone who thinks we could have come out of the 2008 crash and immediately rebounded …was simply fooling themselves,” Tett said.
A more realistic model of the future, she continued, is one in which the U.S. and many other western countries “continue to bump along the bottom for quite a long while” before they fully recover.
“Right now there are some very big structural imbalances in the global economy” that contributed to the global financial crisis but still haven’t been addressed,” she added – such as the $14.3 trillion American debt burden, emerging market countries becoming more competitive, and the future of the Euro, to name a few.
“As long as those fundamental structural imbalances remain unaddressed, there will continue to be considerable nervousness around, which is dampening down growth and sentiment,” Tett concluded.
Even if you feel like you have to pinch pennies in this economy, it doesn’t mean you have to scrimp on your fashion. Kathryn Finney, author, speaker and creator of The Budget Fashionista, spoke with genConnect at BlogHer’11 about how the fashion landscape has scaled back to become more sustainable since she started blogging in 2003. The wallet-friendly blog is her way of “figuring out how to live a great life without going overboard.”
In 2003, people didn’t have to think so much about how much they were spending because getting credit was easy; people racked up credit-card bills without as much worry. “At that time period, people were very focused on luxe items, people weren’t really focused on what they were spending,” said Finney, who in 2010 joined Maria Shriver and Elizabeth Warren on AOL’s list of the Top Ten Women in Money. She added that many people had racks of great clothes in their closet but no money in their 401K. “It wasn’t sustainable.”
So Finney was able to start the Budget Fashionista and essentially launched the “budget fashion” movement. So if you’re looking for deals on top fashions and styles that won’t break your bank during the recession, check out Finney’s tips on The Budget Fashionista today!
For related stories on genConnect:
- John Boehner v Obama: 6 Things You Should Know About the Debt Debate
- U.S. Recession Has Cost You $7,300; What Have You Cut Back On?
- California’s Gavin Newsom: Battling Unemployment (VIDEO)
- CNBC’s Maria Bartiromo: America and the Global Economy (VIDEO)
- Andrew Ross Sorkin Discusses ‘Too Big To Fail’ (VIDEO)
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