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Quest Means Business is back -- but is U.S. economic growth |
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| 2013/9/16 |
Editor's note: Quest Means Business relaunches from New York Monday at the new time of 21:00 London. Follow Richard Quest on Twitter.
(CNN) -- Quest Means Business begins a new chapter in New York Monday -- just as the U.S. economy also enters a new phase.
Five years since Lehman Brothers collapsed, America is a different place.
Back then, in 2008, investors endured "Shocktober" and the Dow made a record points loss, down 778 at the close in one day. Economic growth went into reverse, and by the end of that year jobs were disappearing at the rate of 700,000 every month.
READ MORE: Lehman bankruptcy fees hit $2.2 billion
Now, the markets keep on hitting record highs, to the point where it's almost routine. Month by month, the economy is slowly gaining jobs. The vital signs appear to be stronger; the patient's illness is in remission.
And the Federal Reserve is about to start withdrawing the treatment.
Quantitative easing was first used as shock therapy in 2008, and investors are still attached to the money drip at the rate of $85 billion a month. Many analysts expect Ben Bernanke to start cutting down the flow in the coming days.
But as he "tapers" the treatment, another great tide of fortune is rising -- that of American oil.
Domestic crude production has been increasing since 2008, reversing a decline which began in 1986. Now, given the right conditions, the U.S. could even become a net oil exporter, according to the U.S. Energy Administration.
Five years ago, that would have seemed an impossible dream. And it is all because of the controversial new technique of fracking.
Across the country, fracking is re-making boom towns, where income is high and jobs are plentiful. On next week's Quest Means Business, some of those working in this new oil industry describe it as a "wonderful revolution" and "American capitalism at its best."
But as Lehman Brothers proved, American capitalism is not always kind. The industry is building on fractured or "fracked" ground, and what goes boom can surely go bust too.
Richard Quest traveled to Midland, Texas, where he met some of the new generation of oilmen extracting crude from solid rock.
State Governor Rick Perry told him that the success of shale oil and gas is a product of free spirit and innovation, raising the U.S. economy out of its miasma. And that it is here to stay.
Hard knocks, seismic shocks and intense pressure may have made the U.S. economy hurt; these days a similar process is also helping to make it strong. At least for now.
News Source :CNN |
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Company : CNN
Country : United States
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