The convulsions of the financial world can be felt by nearly everyone. While Europe awaits the verdict of its future, how does mighty America fare? In this short presentation I will have a look at some current developments in the American economy and discuss their possible effect.

1. AMERICAN ECONOMY
WHILE THE EUROZONE IS STRUGGLING THROUGH
CRISIS, HOW DOES AMERICA FARE?
De Vos Margot

2. Overview
 Current developments:
careful positive prospect
 Climbing stock
exchanges
 Good third-quarter
earnings
 Political actions
 Conclusion

3. 1. A first promising signal
 Remarkably positive third-quarter earnings
 S&P 500 (October):
Up > 9%
 Best performing sectors;
energy, materials, industrials
 Bargains in struggling Europe 1: Sector breakdown
Graph

4. Reasons to remain cautious
 European bank problems can be contagious
 restructuring and recapitalization is needed
 Unknown impact of these measures
 Recovery will take years
 LT: cost-cutting and strong(er) economy

5. 2. American stock exchanges
 October → DJ Industrial average rose over 1200
points
 Two important indicators:
- eurozone crisis
- second recession in America
=> people respond
 GDM + 2.5% (third-quarter)

6. Dow Jones Industrial Average
Graph 2. Dow jones industrial average

7. 3. Political action
 Senate, Oct. 11th: Currency
Exchange Rate Oversight Reform Act
 „subsidy subject to countervailing
duties‟
 Similar initiatives but none successful
Graph 3: Yuan

8. Oversight Reform Act: a good
idea?
 Contradictory to „doubling export‟ goal
 America‟s legitimate beefs with China
 Envy with china‟s galloping economic
 Consequences WTO
 Danger: provocation of a trade war

9. 4. Conclusion
Despite some promising news, there are still
many efforts needed to fully recover from the
economic crisis. The financial world should not
be blindfolded by temporary positive signs but
needs to focus on long term results.

10. Sources
 The economist (15 October 2011)
“ And now, protectionism”
 Financial Times (21 October 2011)
“US earnings tell story of resilience”
 The guardian (28 October 2011)
“October set to end as one of the best ever for
US stocks”
 S&P 500:
http://www.standardandpoors.com/indices/sp-
500/en/eu/?indexId=spusa-500-usduf--p-us-l--

11. Thank you for your attention
De Vos Margot