The past couple of weeks have been absolutely brutal on the stock market - day after day of sharp declines.Some of the recent headlines have included:
- The unemployment report for February, released yesterday, shows the national unemployment rate at 8.1% - higher than it has been for several decades. I read a blog post about job cuts at Borders, which got me thinking about the book industry. The New York Times Book Review podcast has been reporting for several months about problems in the publishing industry, and I kept thinking to myself that books should be relatively immune to an economic downturn. After all, aren't they a cheap entertainment alternative when compared to some of the other options? I guess, though, that people have probably been gorging on book-buying the way they've been gorging on everything else, and now that trend has slowed down.
- AIG got another huge infusion of cash from the government after announcing it lost $60 billion during the fourth quarter of 2008. This was the largest quarterly loss ever for a US company. There seems to be increasing talk about whether putting more and more federal money into the AIG black hole makes any sense.
- General Motors' auditors announced this week that there is a significant possibility the company will have to take bankruptcy. As with AIG, the tenor of the discussion about the relative advantages/disadvantages (of a GM bankruptcy) vis-a-vis the broader US economy seems to be shifting.
- The early articles about the spring home-selling season are pessimistic. This is the key to the whole thing -- as home prices continue to decline, which I feel sure they will, the banks will remain in trouble and the broader system will feel the ripple (tidal wave?) effects.
