2009 had some really bad moments, but they maybe end now

2009 came to be pockmarked with deep dark spots of despair that are fortunately beginning to heal; it remains to be seen how long it will be before the scars disappear into history.

Sale of automobiles dropped to its lowest since the last 26 years. General Motors and Chrysler had to seek bankruptcy protection but they surfaced slimmer and leaner. Many noted brands as well as dealerships were axed by GM. When the government took over the firm it gave exit orders to its CEO Rick Wagoner and replaced him with Ed Whitcare Henderson.

Chrysler has emerged under the management of Fiat of Italy. There are massive overhauling schemes in the offing to save costs. Fiat engineering would be applied to bring into the market more fuel efficient models.

Foreclosures of residential mortgages touched 4 million mainly due to unemployment. This has led to a ripple effect with more people with prime mortgages and good credit scores surrendering to foreclosures. The Obama administration focused all attention on the housing crisis. So far 680,000 have been able to modify their loans but it is considerably less than the goal government had set up – 4 million.

As the year draws to an end 14% of the borrowers are in some stage of foreclosure. Cheap foreclosed houses are pulling down the general real estate market. Across the country the owners of residential houses have seen $4 trillion worth of property vanish since the outbreak of the bust in the housing sector.

Last March the important stock exchanges tumbled to the lowest since the last 12 years. But in last October the industrial average of Dow Jones has clawed back to over 10,000 and it is continuing to climb. It indicates that layoffs are lessening while profits in the corporate world are climbing. Production in factories too have picked up.

The year saw the collapse of 140 banks collapse as commercial loans started to turn bitter. This is the biggest number after 1992 when 181 banks had failed at the close of the savings and loan crisis. It is the mayhem in the real estate that has undone the banks. The smaller and medium banks have been more affected than their bigger brothers.

Against this background the deficit of the Federal Government has shot up to $1.4 trillion thanks to the bailout programmes. It exceeds the total of national debt accumulated during the first 200 years since the birth of the Republic; it is greater than the entire economy of India and nearly the same as that of Canada. Each American including the child is saddled with a debt of $4,700.

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