Steep declines in the economies of three of the U.S.'s biggest trading partners -- Mexico, Japan and Germany -- underscored the severity of the global recession and put pressure on major industrialized nations to revive moribund global trade talks.
On Wednesday, Mexico became the latest country to report a plunge in output. The country's gross domestic product fell at an annualized rate of 21.5% in the first quarter, the worst performance since the 1995 peso crisis led to an International Monetary Fund and U.S. Treasury financial rescue. This time, Mexico has insulated itself somewhat by arranging a $47 billion IMF credit line in advance.
Mexico's decline followed by a day Japan's report that its economy contracted in the first quarter at a 15.2% clip, its worst performance since 1955. Last week, Germany said its first quarter decline in GDP, an annualized 14.4%, was the worst since 1970.
Associated Press
Tourists enjoy at the nearly empty pool of the Hotel Gran Caribe Real in Cancun.
All three countries depend on exports to the U.S. But they have nose-dived as U.S. consumers cut back purchases of autos, electronics and other goods mass produced abroad. For the first three months of 2009, U.S. merchandise imports declined about 30% to $352.5 billion compared with the same period a year earlier. Mexico's ties to the U.S. are particularly strong because of the North American Free Trade Agreement, and Mexican auto production in the first quarter fell 41% from the year before.
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"Reporting from Los Angeles and Sacramento --
By Evan Halper and Tom Petruno
10:53 PM PDT, May 20, 2009
First came the banks and insurance companies. Then the auto industry. Now, with California on the verge of financial collapse, state leaders are demanding an unprecedented federal rescue of their own.
They say they need the Obama administration to step in and back billions of dollars in emergency loans. If Washington fails to do so, the state could start running out of cash in July and then would have to stop paying huge amounts of its bills. That, in turn, could set off dangerous ripples throughout the economy, state officials say."
Source: LA TIMES
Check out this amazing graph from the 1700's to now. Its a stunning cycle!
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California legislature is reaping what it sows...profligate spending + profligate economy + profligate budget = disaster. Too big to let fail, then let it die instead! Illegals drain the state, the people try and stop it, and the legislature pays no mind. Good, let it collapse.
ReplyDeleteObaminamics is failure, but by design. He's done so much so fast, it can't be stupidity, but design. The list is so long for just 100+ days.
ReplyDeleteThey will do it though, the O'Bambi administration will in fact print that money and ship it to Kalifornistan. You can take that to the bank (Har!)
ReplyDeleteLittle green shoots...
ReplyDeleteSomebody peed on the onions!