Facebook Archive - December Economics

Wall Street Christmas Crossroads
In the world of stocks and business, November and December are the busiest months for trading and for best performance. But of late, trade volumes are down as Dow Jones is hitting resistance at the 10,500 level. All the experts and investors are indecisive on where the financial markets is heading, the data is out there, but everybody is coming to different conclusions about the future. This indecisiveness has built up huge amounts of potential energy... either for further explosive growth or that dreaded "double-dip" recession. So you can be darn sure that before the month is out people will decide whether to be optimistic bulls or hibernating bears traders.

Below is the highly watched S&P 500 index that is showing that resistance from the 2007-2008 highs (the red line) has reached the rallying support from March 2009 lows (the blue line). Our continued economic recovery does hinge on people's opinion on the current worries: Concerns over a "double-dip" recession, concerns over interest rate hikes, and concerns over market valuation.

S&P 500 Index, Weekly, 42 month timeline

Investors and strategists are on the sidelines at the moment, but with trading volumes down, I cannot stress the fact the amount of potential energy waiting to be unleashed.

Las Vegas of the Middle East - Dubai

Not much was said about Dubai as the global economic crisis formed, but some knew that back a year ago that Las Vegas, Nevada investments dried up as the cash flow contracted backwards to various investors. We all know of Las Vegas' extravagance, but then a couple years back we got the revelation of a more extravagance in the epitome of Dubai.

Concerns about Dubai's debt didn't surface until Thanksgiving week this year when they requested a six-month freeze on repayment of $6 billion in debt. While it didn't hit American banks and investors hard on the limited trading hours on Black Friday, it's shock wave rippled through European and Asian markets.

Fed Chairman Ben Bernake Under Fire?

It's definitely not easy to make tough choices in tough times, especially if your the one guy (or two) of the world's biggest economy. It won't be in the near future that we'll be ever sure whether the bailout and various other government-endorsed stimulus programs did work. However, politics love a scapegoat and that seems to be in the nomination of Ben Bernake's second term run being approved through Congress. I think he'll serve as the chairman for the duration of Obama's first term.