One of the spectacular and the most expensive inaugurations took place last night; millions came to watch the new president inauguration enjoying their achievement as they believe that from now on no racism will take place and the African Americans are equal to the White Americans.
Obama is now facing the worst challenges a President will ever see, an economy teetering on a brink of total destruction, a deepening recession along with millions of terminated jobs, the worst Credit Crisis since the Great Depression, and the involvement in two wars that drained the federal budget.
The work starts immediately, Timothy Geithner the new Secretary Treasury is now working hard to achieve a full approval on the newly studied fiscal plan that is meant to create new jobs and stop the bleeding wound that is about to alter in lethal contagion that would push the United States to their end.
Reforms must take place; the $700 billion fiscal plans must witness some reforms just to spur up spending in the states in order to recover from a recession and slow the pace of endless job terminations. Even when joy prevailed across the United States US indices were not boosted by this joy, pushing them to add more losses since the beginning of the year.
Dow Jones industrial average fell 4.01% or 332.13 points reaching 7949.09 levels reaching a total of 9.43% losses since the year started, S&P 500 sank severely by 5.28% or 44.90 points reaching 805.22 levels halting the total index with 10.85% loss in the past 21 days and finally NASDAQ fell 5.78% or 88.47 points reaching 1440.86 levels.
Banks are still tumbling, whereas now they are about to head for another recapitalization just to continue functioning, thought they might be a big possibility that they would fail this movement especially since confidence in the United States has now reached its lowest levels ever due to the continuous fallouts in the financial sector and the deteriorating household incomes.
The pessimism transfused to the Asian markets, where the surging Japanese Yen and the weak earnings faced by the Japanese indices have took Nikkei down with a total of 2.0% or 164.15 points closing at Tokyo's session at 79010.64 levels the lowest since the 2nd of December 2008.
Markets witnessed the start of the weak earnings which obligated government to intervene; the start was the bailout to the Bank of America which received a total of $138 billion in order to keep functioning, which was followed by a failure in Citigroup which obligated them to split into two.
From the United Kingdom, the Bank of England approved the 50 billion plans earlier this week in addition to 100 billion dollars used to support the financial sector, also the bank decided to increase their share in the nationalized Royal Bank of Scotland, those moves enriched fears of more losses in the financial sector.
From Japan, huge manufacturing companies will release weaker than expected earnings, where Sony a leading consumer electronics are about to release their fourth quarter earnings, markets project more than 70 billion yens in losses especially after the Japanese Yen surged against majors such as the Euro, British Pound and the US dollar.
Whereas today the sixteen economies had managed to incline against the Japanese yen to record a high of 117.19 yet plunged back to currently trade at 115.80 levels; but against the British pound, the Japanese yen managed to incline for the second consecutive day to currently trade at 123.81 levels after the pair recorded a high of 126.16 levels
Markets lack major fundamentals from the Euro Zone and the United States, where the United Kingdom's fundamentals will be the major contributors in today's trading.
Markets are waiting for the Bank of England minutes which will be released in a while; the minutes would clearly identify that the economy is still weakening and the rate cut of 50 basis to 1.50% is a result of a unanimous decision, but if votes diverted some committee members would be favoring a deeper cut as the economy fundamentals continued to weaken where the downside pressures had appreciated noticeably.
High certainty is still hovering around economies where the economic demand is weakening heavily along with the high volatility in energy prices which now fell from the unprecedented levels triggering inflation to undershoot set targets. Moreover to the agony, all the actions taken by the Bank of England in the past short time span did not really restore back the long lost confidence.
Labor market in the kingdom will continue to weaken, according to markets projections the Claimant Count Rate inclined in December to 3.5% from the previous 3.3%, and the ILO Unemployment rates inched higher to 6.1% from the previous 6.0%. The continuous job terminations which started to become obvious in the United Kingdom will result in weakening the demand even more pushing the Royal Kingdom in a deeper recession as the economy contracted by 0.6 percent in the third quarter waiting for the fourth quarter contraction to make the recession official.
Today's fundamentals will continue to signal toward weakening growth in the Kingdom... So now hopes are hung on the new US president where he would be the savior to the total destruction seen.