Citibank Crashes – American Economy in Free Fall?

One of America’s largest banks is being bailed out again by the United States government and the economy is in the tank.

The economy contracted at a staggering 6.2 percent pace at the end of 2008, the worst showing in a quarter-century, as consumers and businesses ratcheted back spending, plunging the country deeper into recession.

The Commerce Department report released Friday showed the economy sinking much faster than the 3.8 percent annualized drop for the October-December quarter first estimated by the government last month. It also was considerably weaker than the 5.4 percent annualized decline economists expected.

Looking ahead, economists predict consumers and businesses will keep cutting back spending, making the first six months of this year especially rocky.

The new report offered grim proof that the economy’s economic tailspin accelerated in the fourth quarter under a slew of negative forces feeding on each other. The economy started off 2008 on feeble footing, picked up a bit of speed in the spring and then contracted at an annualized rate of 0.5 percent in the third quarter.

And, the equity markets are not responding to the Obama Administration’s ambitious tax and spend “BIG GOVERNMENT” solution.

Looks like the 2010 election cycle has already started – as a referendum on the Democrat’s/Obama’s failing economic policies.