Recently the media has been filled with stories about the Dow’s increase, GM’s refusal of the next installment of its bailout money, Citibank’s report of being in the black so far this year, and the banks request to return TARP money.

 

So with all this good news, does that mean that the recession has bottomed out, and that all things will start getting better again? In a word, no. Unemployment continues to rise. GM’s having enough money for the month of May doesn’t mean the balance sheet will look significantly better in June and it is still asking for the multi-billion dollar bailout through the end of this year future performance. There has been huge increase in many people and companies filing chapter 7 bankruptcy, and the structural cracks in our economy don’t appear to be healing any time soon.

 

Last October, Iceland was on the brink of Bankruptcy as the government put a stop to stock trading and took possession of the last independently operated bank. This made the Icelandic krona, the nation’s monetary unit, all but worthless. On October 24, the IMF agreed to a $2.1 billion loan to help prop up Iceland’s economic situation. The summit of world leaders got together and discussed the global economic situation last November.

 

What does all this mean for us here in the United States? On the bright side, it means that even though our economy is clearly in a recession, things could be much worse. On the other hand, this is an indicator of the severity of the economic crisis and many more will have to file bankruptcy. As more rough times seem to be on the horizon, this is an excellent time to get your personal finances in order.