This economy has demonstrated a long slow process in rebuilding confidence in this economy. But recent announcements indicate a 2.5% growth, the best the nation has seen since September of 2010.
The US economy was for over 80 years considered the best economy in the world. Lack of respect for and loss of confidence in the USA's "Wall Street" and a banking system dominated and led by 12 giant bank groups, has been reinforced when big banks such as Citi continue to charge 29% interest rates to credit card customers and force unyielding collection practices on the very taxpayers who bailed them out just 3 years ago.
A further drag on "confidence" is a perception of what the "Big Boys" are doing on Wall Street. Some Wall Street traders are still using the CDC type instruments in new market pools of investments, consisting of mortgage loans. It is no wonder that international banks are hesitant to buy US "loan packages". There has been a backlash, as exemplified by the "Occupy Wall Street" crowd that is verbalizing the thoughts of millions of Americans. While we must condemn those who would try to commit fraud on banks through crooked borrowing practices, those people are a tiny minority. The bigger crime is the arrogance of the Wall Street crowd, that does not seem to have "reformed" practices that seem distant and removed from local economies. We hope to think that giant banks such as Citi which blatantly overcharge customers and intentionally create unfair and destructive bank procedures (that can artificially cause businesses to fail), are also a minority. Those types of "minorities" will be dealt with by people taking their assets or business elsewhere.
The big boys must get personally involved and be real bankers to their customers and their communities. They need to "know" their customers, and get out of the policy manuals.
A bright spot in the economy is new appreciation for local and community owned banks and credit unions. These are "real local bankers" who make direct loans to customers they know, and these banks keep their profits and investment in local communities. As many people remove funds from the big boys, such as Citi Bank and Citi Group, we are seeing a grass roots movement, a transfer of power, back to local control. This diversification of power, the tiny effort to lower a few giant bank's "concentration" of wealth and bank power, is one small step to "diversify risk" to help assure that the recession that the USA now is slowly climbing out of, will not be repeated.
While we at Global Perspectives have long provided economic risks and solutions, we have also warned of the problems of "over deregulation" of major financial industries, we remind you that our 15 years of articles document many correct predictions, even of this recession, published here by Global Perspectives http://www.bootheglobalperspectives.com.
What caused the growth?
1.Stronger consumer spending
2.Stronger fixed investment spending
3.Stronger exports and federal spending
Reuters says the news is "a welcome relief for an economy that looked on the brink of
recession just weeks ago."
The markets were further encouraged by the news from Europe that the EU finally got German Bankers (the new Kings of Europe) to agree to take up to a 50% loss in the loans PIGS (Portugal, Italy, Greece and Spain) owe. The idea was "either take a write down, or all of Europe may sink". Driven in large part by this news on the debt crisis in Europe and the economic growth reported above, stock markets showed welcome increases.
Global Perspectives (http://www.bootheglobalperspectives.com)