The Recession is Still Threathening Us, The DOW Falls.

This week we are seeing the shadow of a new recession. Although the GDP growth in the US is being higher than the expected, today, the Dow had a day in red and felt by 0.31% to 9712 points. But there Isn’t motive to alarm, this week we had many macroeconomic news.

We must be optimistic, according to the Inflation record in the European Union of the 16 , the Eurozone inflation felt more than expected by a 0.3 per cent year on year in September. This means that the ECB will not have to raise interests in order to contain the inflation, and the European economy will continue be boosted at least the whole 2010.

In despite of these good news, there are some black clouds in the skyline. The PMI of Chicago has been unexpectedly low this month, 46.1 points versus the 50 points of August. This means that central United States are destroying economic activity, and if we sum that this month the market lost 254.000 jobs instead of the expected 210.000, it’s not difficult to understand why many people is opting for sell their risky assets.

The financial system under review.

The International Monetary Fund IMF, warned of the danger of a new recession, banks are living in a happy hour, they can lend money with a very low price of the resources while charging a high interest rate. Credit restrictions are dangerously contracting consumption, and their excuse is that we are in danger of a collapse. The issue here is to fairly evaluate the loses of the Financial crisis, otherwise:

”A failure to reveal the true scale of the losses they are likely to face and boost capital held in the banks would undermine the economies of the US, the UK and the Eurozone and could generate a renewed vicious spiral where weak banks damage economic prospects, raising default rates and further threatening the health of banks”, the IMF said.

Related posts:

1. The European Interest rate is likely to continue low in 2010
2. Bernanke says that the recession is over but there are still problems with the financial system
3. The big European Banks are having profits again
4. Wall Street is returning to the past, the technology falls and the oil rises.
5. Wall Street affected by the High Unemployment rate