Barack Obama has won the elections, but just now, when the US is having a terrible economical crisis. Some say it might be the worst since the 1930s. The growth has fallen 25% and specialist don’t expect it to stop soon. The unemployment has taken a leap.
The first thing that Obama will have to do is restore the confidence of the people in the banks. Other plans and policies will be moved at the back. He promised to invest $150 billion in a period of 10 years.
Peter Thomson says that it is possible that the US benefits of the situation. The other countries were having the effects of the crisis much later than the US. So the Us was the first one to get in, it could also be the first one to get out of the crisis and the recession. Besides, the valuations are very low. These 2 circumstances could make sure that the stock market recovers sooner than in Europe.
The dividends that the banks paid out last year, were over 30% of the total dividends. This year, there are only 2 of them that are allowed to pay dividends.
The Royal Bank of Scotland (RBS), HBOS and Lloyds TBS are making a lot of promises to attract people to invest.
For instance, RBS is promising that “their strategy will be much more lower-risk and domestically focused.”
HBOS, on the other hand, will be taken over by Lloyds. They promise savings for a total of £1.5 billion. They will also try to sell some combined businesses, so they would be able to pay off the government, in order to be able to give dividends in 2009.
I also think it is the first activity of Obama to restore the confidence. Without it, the problems will not get solved, on the contrary, they will only become worse. The growth and the unemployment are very bad, those figures really need to get better in order to have a healthy economy.
It is true what the specialists say about the US. They really could benefit of the fact, that will be the first ones to come out of the crisis. While Europe and the rest are still in it, the US can begin to rebuild their economy.
I hope that banks like RBS and Lloyds don’t just make promises, but that they also accomplish them. It is good that Lloyds tries to take measures to pay dividends to their shareholders. After all, that is why people buy the shares, they want an extra above their normal income.
Source: The Guardian – America’s not beautiful, but it might look better soon - http://www.guardian.co.uk/money/2008/nov/09/american-economy-crisis
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I think the expectations for Obama are real high now he's becoming the new President of America, but his task will be very difficult. The lack of confidence of the people in banks is a really hard thing to restore. I don't believe that we should expect improvement within the next couple of months.
We got a new president for the United States now but Obama has a very difficult task. But he knew he had to handle with this. I hope he will take some drastic actions so the confidence can come again and the markets can become more healthy.
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