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.

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The president of the Federal Reserve(Fed),Ben Bernanke,pointed last Tuesday that from a technical point of view, the recession in USA is ”provably over”.However, has also pointed that the US recovery will be ”relatively slow in the beginning and unemployment will only decrease gradually”.

”I’ve seen some agreement in the forecasts of recovery from the community of analysts.But the general opinion of the most of us is that the economic growth in 2010 will be moderate”.added.

Bernanke also asked to put ”urgent” actions to overlook the ‘’structural” weaknesses is holding nowadays the financial system.

”We must urgently approach the structural weaknesses of the financial system, particularly in the regulatory frame, to ensure we do not suffer again the enormous costs of the lasts years
The president Obama has also the same opinion about the necessity of ”urgent” measures in the financial system to prevent a new crisis of the current to happen.”

In his speech in the Brookings Bernanke Institution has rated positively the intervention of financial regulators in September 08, after the Lehman Brothers bankrupt. According Bernanke, the fast performance of these organisms served to reach the stabilization of the global economy which was close to the collapse.

From this point of view,Bernanke has admitted that,nowadays, the fear to a landslide of the financial system is lower and the economic activity is stabilizing.

According Bernanke, after a ”drastical” contraction of the economy, the recession of the United Startes and the rest of the world has apparently touched the bottom and
the perspectives of a return to the economic growth seem good.
However, Bernanke warned that the financial conditions continue under ”high pressure”.
There is still stress in a lot of markets all over the world,financial institutions are affording significative additional loses and a lot of companies and homes continue experimenting a considerable difficulty to obtain credit” pointed Bernanke.
Geithner: ”we’re still recovering”
Coinciding With the Bernanke’s speech in Washington, The president of the treasure,Tim Geithner, assured in an interview from ABC that the current economic situation in the US is ”completely different” than a year ago. However,also pointed that there is still to early to affirm that the economy is recovering.

”I would not say that we are already recovering.We define recovery(…)as the moment when people comes back to work, when people is able to find job again,when business are investing on (..) and we haven’t still reached that point”

said Geithner.

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