Financial analysts have been talking about economic recovery for over a year now, and it’s been generally agreed that the world was indeed pulling itself out of the mire of the 2008 crash. There have been a few stumbling blocks along the way though, from the USA’s negative growth figures in the first quarter of this year to the recent setback in equities prices. News from Europe also points to the recovery not being as solid as it could be, with the Eurozone’s two largest economies, Germany and France, both reporting that their economies contracted last quarter. Now a new report from the Federal Reserve highlights the continuing effects of the economic crisis on ordinary Americans.
Last month the Federal Reserve warned that the values of some stocks and junk bonds were starting to look inflated, a move that many took as meaning the long-running bull market might be starting to run out of steam. This week it’s starting to look as if they were right. Growing wariness of junk bonds has turned into a much wider sell-off that’s seen a whole array of industry benchmark stocks drop sharply. The CBOE Volatility Index – widely known on Wall Street as the “fear gauge” – hit its highest level for nearly four months as more risk-averse investors started moving their money to US Treasuries and other safe havens like gold. However it’s still not clear if the bull run has really come to an end or if other factors are causing a sell-off that could reverse itself in a few weeks.
Illegal immigration across the USA’s southern border has always been a controversial issue, but it’s taken a massive turn for the worse in recent months. Since late last year more than 50,000 unaccompanied minors have entered the United States, more than three times the rate seen just a few years ago. The massive influx has overwhelmed immigration services, bringing complaints from liberals about slow processing and unsatisfactory accommodation for holding these immigrants while their cases are dealt with. With a genuine human tragedy going on it’s not the right time to point out to these liberals that they’ve always been against investing more money in border control, to the point where ordinary citizens have had to take on the responsibility themselves. Now the government is finally trying to authorize extra funding to sort out the crisis, but it’s a bit late.
The economy is finally shaking off the last effects of the 2008 financial crash, and going by some indicators things are even better than they were before. The Standard and Poor 500 hasn’t just fully recovered from its plunge six years ago; it’s a full 30 percent higher than it was at the peak of the pre-crash housing bubble. Investor confidence now seems to be high and that’s being reflected in the price of stocks; the Dow Jones is also rising steadily and traders are moving out of safe hedges and back into equities in a big way.
Of course after the last two big stock market peaks – 2008 and the internet boom at the turn of the century – many analysts are looking at the ballooning market with a justifiable concern. Is this another bubble? Is it all going to crash again? Unemployment has been falling all this year, with at least 200,000 net new jobs created every month, but the national rate is still at 6 percent and actual economic growth is slow. It’s easy to understand the fear that this is a rising market with no real support under it.
It’s taken a while for the US economy’s recovery to gather pace, but finally it seems to have developed enough momentum to bring a degree of confidence back to the stock and currency markets; the Dow Jones is rising steadily and the US dollar is pulling out of the mire it’s been stuck in for months. The best news of all is the employment figures; in June 288,000 new jobs were created, and in 2014 so far the total is pushing towards 1.5 million. Those figures have been seized on as evidence that the economy’s not just recovering; it’s booming. But is that the case?
If anybody needed any evidence of why Iraq needed to be sorted out in 2003 the last couple of weeks should have provided more than enough. The ISIS insurgency that’s rolled over the north of the country with such stunning speed isn’t anything new – it’s the result of sectarian tensions brewed up by the despotic regime of Saddam Hussein and left unresolved in the time since he was removed by Operation Iraqi Freedom eleven years ago.
Islam is dominated by the Sunni sect, but there are two countries where the smaller Shia strain is in the majority. The best known is Iran. The other is Iraq. Nearly two-thirds of Iraqis are Shia muslims, and most of the rest are Sunni (about three percent are other religions, mostly Christian). However from 1958 to 2003 the country was dominated by Sunni dictators, most infamously Saddam. The Shia were second class citizens and not surprisingly that caused huge resentment. The Sunni also suffered under Saddam’s regime though; the only people who benefited were his own al-Tikriti tribe. Sunni Iraqis had grievances of their own and ISIS is their latest way of venting them.