OECD says worse to come for America
The BBC gives quite long and extensive coverage on a report from the OECD on the economic challenges facing the USA, and it is not pretty:
US faces deep problems, OECD says
The OECD paints a grim picture of the challenges facing the incoming Obama administration, which takes office on 20 January.
It says that “the US economy is going through an exceptionally difficult period” and despite major policy interventions, it is likely that “activity will get worse before it gets better”.
The OECD suggests that the weakness will continue well into 2010.
It also warns that “house prices appear to have further to fall, and foreclosures are widely expected to rise.”
That is a particularly bleak outlook especially considering the conservatism of the OECD, and it also bodes very ill for the rest of the world’s financial markets.
This is especially as the prospects of commercial markets openly up has to be even more remote while so much US sub-prime debt remains ingrained in there.
I remember before the summer there were warnings of major US banks could go bust, and then we saw Lehman Brothers, Wachovia, and Washington Mutual all die off. Now the carmakers are pleading for more funds.
And here in the UK we’ve seen Woolworths and MFI go into administration.
If what we’ve seen is only the beginning, and worse is yet to come, that is hardly going to be comforting.
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