Bill Gates is worth more than the GDP of countries like Slovakia, Qatar, Libya, Luxembourg, Sri Lanka, and many more.
If Bill Gates was a country, its GDP would rank close to 60th out of 180 countries in the world.
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Top 10 richest Americans are in total worth more than $270 billion.If they all decide to be a country, its GDP would rank in the top 30 of 180 countries.Its GDP would be larger than the countries like Denmark, South Africa, Iran, Ireland, Argentina, Finland, Thailand, Portugal, Hong Kong, and the likes.
Markets seesawed on Tuesday, January 22nd, 2008>
After the Martin Luther King Jr. day holiday on Monday, January 21st, the US markets opened on Tuesday, to a significant scare from the Asian and European markets.Markets worldwide plunged on the fear that US economy is slowing at a faster rate than expected and it could hurt the global economy.
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The drops in the Asian and European markets were so severe, that the news caused a panic among the US investors.At the opening bell, the DOW was down almost 500 points, the S&P500 and the NASDAQ were also down significantly.However, Federal Reserve's significant and sudden rate cut before the opening bell on Tuesday helped to calm investors.After the Fed’s rate cut news most of the US markets regained the early losses.
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Finally, the S&P500 gained 18 points or +1.3%, the Dow gained 114 points or +0.9% and the NASDAQ gained 105 points or +4.7% for the four day week ending January 25th, 2008.
Fed abruptly cuts key rates by 0.75%
The Federal Reserve cut both, fed funds rate and discount rate by three quarter percentage points on January 22nd to 3.5% and 4.00% respectively.The Federal Reserve Bank’s 0.75% cut in the interest rate this week, was the biggest rate cut since October 1984. This cut was also the first cut between the regularly scheduled meetings since the 9/11 attacks.
The Fed’s interest rate cut was based on its view that the banking loan problem and the credit crisis issues are continuing to get worse.The housing market problem is deepening and the looming lay-offs are negatively impacting businesses and households.It seems, for now, investors seems to like what the Feds have done. What does the interest rate cut mean for you (click here)?
Microsoft’s (Ticker MSFT) positive earnings and upbeat future forecast was just the news that markets were looking for.Software giant exceeded its second quarter (Microsoft is on a June to June financial cycle) earnings and raised its full year sales and profit targets. Microsoft’s profits were up from $2.6 billion to $4.7 billion for the same period ending December.Its sales rose 31% to $16.37 billion.
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Most experts have been estimating $15.95 billion in revenue for the quarter. Investors loved this news in the middle of alarming news from the banking industry and the looming weak economic conditions.Microsoft stocks were up by $1.4 for the week to $32.94..
What is a recession?.
The economy is considered in recession when the GDP falls for the two consecutive quarters.
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For example, if the US GDP for the first quarter of 2008 falls to a negative growth of say 1%, and then the second quarter of 2008 GDP also falls to a negative growth of say say2%, then the US economy would be considered in recession.
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During the recession, across the economy, business activity slows down, companies produce less, unemployment increases, people’s income falls, and trade shrinks.Not a pretty picture!
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We have had a few recessions in the recent times.For example, the energy crisis caused recession from 1979-1980, inflation and higher interest rates in 1982-83, credit crisis in early 1990-91, and Dot Com bubble burst in early 2000-01.However, the 1990 and the 2000 recessions are technically not recessions, because the GDP declined for only one quarter.
What is a depression?.
If recession continues for a longer period, and larger decline in the business activity occurs, then it is called depression.
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One of the major depressions in the US history, called “the Great Depression of the 1930s” occurred in two parts.From August 1929 to March 1933, the GDP declined almost 33%!Then again, from May 1937 to June 1938, the GDP declined close to 18%!
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These were tough times in US history. Many people lost their jobs, had no money to buy food, and basic necessities.Food lines could be seen in cities across the nation, where people stood in lines for hours to get some basic food, such as, bread.
Learn more about...
What is Credit History? Why is it important to have a good credit history? Volume 12.
What is Economy, Business, Workers, Goods, Services, Stock, DOW, S&P500, and NASDAQ in Volume 16.
What is Currency and Foreign Currency Exchange rate? Volume 14. What is stronger or weaker currency? Volume 20. What does the dollar slide mean? Volume 32.
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