Us economic looks bleak ahead,this why americans must realise their American Dreams slipping away day by day since depression days.The troubles of mortgage finance giants are pushing up home loan rates to their higest levels in five years.While the us inflation is up since 17 years.the average interest rate.
The average rate for very big,so called 'Jumbo Loans' which cannot be sold to Fannie Mae and Freddie Mac was 7.8%,the highest since December 2000.
Loan rates are rising because of concerns in the financial markets about the future of Fannie Mac and Freddie Mac,which own the guarantee nearly half of the nation's US$12 Trillion mortgage markets to foreign bond investor.
The Washington can only try to stablise the Market by adding the cost is being passed on to comsumers via mortagage markets when,the the time US have the highest inflation ,unemployments,when personel income become flactuate.The rate hike is the greatest concern to home owners,whose mortgages required them to pay only the interest on thier lons for the few years.If such borrowers are unable to refinance into lower-cost loans,many of them will face the propects of having to pay both interest and principle at higher,adjustable rates.
Let's me show you example for borrowers with a US$400,000 loan,such a jump could send their monthly payments to US$2,338 from US$1,417 that estimate the mortage payment .Im wondering how on earth the americans going to face this reality of future.
US economy not going to be looks bleak but the Confidence level with foreign fund manager is sinking day to day by removing out billion Fund out from US soil.
Only Obama policy looks much more brighter future for US to bring the confidence back in America compares to any John McCain policy.
JUDGMENT CALL
Robert J. Samuelson
Globalization’s Achilles’ Heel
Countries are becoming more interdependent and nationalistic. This combustible combination could lead to instability.
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We've been having the wrong discussion about globalization. For years, we've argued over whether this or that industry and its workers might suffer from imports and whether the social costs were worth the economic gains from foreign products, technologies and investments. By and large, the answer has been "yes." But the truly significant questions about globalization, I think, are harder to answer. Is an increasingly interconnected world economy basically stable? Or does it generate periodic crises that harm everyone and spawn international conflict?
Let's concede that the present U.S. economic slowdown—maybe already a recession—stems mostly from familiar domestic causes: the burst housing "bubble," shoddy lending practices and households' heavy debt burdens. All have depressed housing and consumer spending. Still, global factors, notably high oil and food prices, have aggravated the slump, and there is a general anxiety that we are in the grip of worldwide economic and financial forces that we do not understand and cannot easily control. This sense of foreboding is not unreasonable.
It helps explain the yawning gap between the economy's actual performance (poor, but not horrific) and mass psychology (almost horrific). June's unemployment rate of 5.5 percent, though up from 4.4 percent in early 2007, barely exceeds the average since 1990 of 5.4 percent. Contrast that with consumer confidence, as measured by the Reuters–University of Michigan survey. It's at its lowest point since 1952 with two exceptions (April and May 1980). The expectation is for things to get worse. People fear what they don't understand, and the global economy seems both mysterious and menacing.
The good that globalization has done is hard to dispute, though some do. Trade-driven economic growth and technology transfer have alleviated much human misery. If present economic trends continue (a big "if"), the worldwide middle class will expand by an additional 2 billion by 2030, estimates a Goldman Sachs study. (The global definition of middle class: people with incomes from $6,000 to $30,000.) In the United States, imports and foreign competition have raised incomes by 10 percent since World War II, some studies suggest. Job losses, though real, are often exaggerated. In the late 1990s, U.S. trade deficits increased while unemployment fell.
But a disorderly global economy could halt or reverse these advances. By disorderly, I mean an economy plagued by financial crises, interruptions of crucial supplies (oil, obviously), trade wars or violent business cycles. This is globalization's Achilles' heel. Connections among countries have deepened and become more contradictory. Take oil producers. On one hand, high oil prices hurt advanced countries. But on the other, oil countries have an interest in keeping advanced countries prosperous, because that's where much surplus oil wealth is invested.
Global money flows are now vast with oft-unintended side effects. In the past six years, foreigners purchased $5.7 trillion of U.S. stocks and bonds, reports economist Harm Bandholz of UniCredit. From 2004 through 2007, that included 80 percent of new marketable Treasury securities and 40 percent of new corporate bonds. He says the inflow of money cut U.S. interest rates by 0.75 percentage points. So: surplus savings from Asia and the Middle East, funneled into U.S. financial markets, may have abetted the "subprime" mortgage crisis by encouraging sloppy American credit practices. Too much money chased too few good investment opportunities. Bandholz figures that foreigners lost $300 billion on investments related to subprime securities.
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