Political Trends Ohio

How bad will economic news get in US and worldwide?

Igniting a bear market?

Mounting fears of a debt default already had put the brakes on the U.S. stock market's 2011 climb. The selling pressures gained steam in the days after an 11th hour deficit-reduction deal between Congress and the Obama administration that seemed to please no one.

The S&P 500, an index encompassing the biggest blue-chip corporations, plummeted 12% the past two weeks — exceeding the 10% drop that unofficially marks a correction — and dropped another 6.5% on Monday.

Moreover, economists and market strategists are unsure whether the economic headwinds and deepening debt crisis point to a soft patch in the economy or a more protracted double dip recession that many fear will derail consumer spending and corporate profits.

"No question the economy has slowed. But for investors, does that mean this is a correction in a cyclical bull market or something more severe — the start of a bear market? I wish I knew," says Hugh Johnson , a veteran market strategist who manages a $2 billion portfolio.

Bear markets are declines of 20% or more. Wall Street hasn't had one in nearly 2½ years.

"With fingers crossed, I say this is a soft patch and transitory," Johnson says. "But it's a close call."

Nigel Gault, chief U.S. economist for IHS Global Insight , now says the chance for recession is 40%, up from 20% in June. "Recent trends look perilously close to stall speed for the economy,'' says Gault, citing a lack of job expansion, a slower economy, Washington's political wrangling over how the $14 trillion deficit and the looming debt crisis in Europe.

"For the past few months, there's been a competition between Eurozone and U.S politicians over who can mess up the most," Gault says. "I don't think a winner's been decided yet. The spectacle over the debt ceiling in Washington was very damaging to consumer and business confidence. That the government could let the U.S. go to the brink of defaulting on its obligations is disturbing for rational grownups."

Late Sunday, the European Central Bank said it would "actively implement" buying government bonds, a move that could help alleviate concerns about debt-strapped Italy and Spain and bolster Europe's financial markets. The ECB also urged Spain and Italy to implement quick reforms to cut their deficits and shore up their economies.

President Obama Signs Ohio Disaster ... - Current Political Trends

The President today declared a major disaster exists in the State of Ohio and ordered Federal aid to supplement State and local recovery efforts in the area struck by severe storms and flooding during the period of April 4 to May 15, 2011. 

Federal funding is available to State and eligible local governments and certain private nonprofit organizations on a cost-sharing basis for emergency work and the repair or replacement of facilities damaged by the severe storms and flooding in the counties of Adams, Athens, Belmont, Brown, Clermont, Gallia, Guernsey, Hamilton, Hocking, Jackson, Jefferson, Lawrence, Meigs, Monroe, Morgan, Noble, Pike, Ross, Scioto, Vinton, and Washington.

Federal funding is also available on a cost-sharing basis for hazard mitigation measures statewide. 

W. Craig Fugate, Administrator, Federal Emergency Management Agency (FEMA), Department of Homeland Security, named Michael J. Lapinski as the Federal Coordinating Officer for Federal recovery operations in the affected area. 

FEMA said additional designations may be made at a later date if requested by the State and warranted by the results of further damage assessments.

FOR FURTHER INFORMATION CONTACT:  FEMA (202) 646-3272.

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