Archive for the ‘housing’ Category

Obama to inherit feeble economy awash in red ink

November 5, 2008

To the victor goes the mess. Barack Obama‘s presidential election victory comes with an albatross of a prize — an economy beset by a stubborn housing slump and the worst financial crisis in 70 years.

Consumers and businesses are sharply reducing their spending and the government is awash in red ink.

“He will inherit an economy that is in recession and … is likely to get worse before it gets better,” said Stuart Hoffman, chief economist for PNC Financial Services.

The current administration on Wednesday will detail its plans to borrow a record $550 billion in the final three months of the year as a down payment for the various financial rescue packages put into effect in response to the global crisis.

A Treasury Department official on Monday projected the government would need to borrow an additional $368 billion in the first quarter of 2009. Treasury is expected to bring back its three-year notes to help cover the increased borrowing needs.

Still, investors seemed to draw hope Tuesday from the selection of a new presidential administration, while shrugging off the latest in a series of grim economic reports. The Dow Jones industrial average surged more than 300 points. The Dow and the other major stock indexes all finished with gains of more than 3 percent.

In this Sept. 12, 2008 file photo, James Ross works the assembly ... 
In this Sept. 12, 2008 file photo, James Ross works the assembly line making Chrysler’s new 2009 Dodge Ram pickup at the Warren Truck Plant in Warren, Mich. The government said Tuesday, Nov. 4, 2008, factory orders dropped for the second straight month in September as businesses cut back on purchases of steel, computers and other equipment amid the economic downturn.(AP Photo/Carlos Osorio, file)

By CHRISTOPHER S. RUGABER, AP Economics Writer

Asian stocks rallied Wednesday on the back of Wall Street’s gains and renewed investor confidence. Asian investors were hopeful Obama would tackle the U.S. financial crisis with renewed vigor, although some voiced concerns that a Democratic president and Congress might turn more protectionist. Japan’s Nikkei 225 stock average climbed 4.5 percent, while Hong Kong’s Hang Seng index rose 3.2 percent.

Futures trading fell after initially rising. Dow futures fell 126, or 1.3 percent, to 9,461, while S&P futures declined 1.5 percent to 988.4.

Analysts said investors appeared to be looking forward to the end of political uncertainty and hoping the new U.S. president will move to boost the economy, which got another bit of dismal news Tuesday.

The Commerce Department reported Tuesday factory orders dropped 2.5 percent in September from August, more than three times as much as analysts had expected. Excluding autos and aircraft, orders fell 3.7 percent, the steepest drop since 1992, when the department began tracking sector-specific changes.

The weakness was led by a heavy drop in nondurable goods orders, which fell 5.5 percent. That included a 17 percent drop in the value of petroleum and coal products, reflecting the decline in oil and gas prices in September.

Analysts said the report wasn’t as bad as it looked, because much of the decline was driven by the drop in the value of oil and gas orders.

But orders for non-defense capital goods excluding aircraft, considered a good indication of business investment plans, fell 1.5 percent. That follows a 2.3 percent drop in August and indicated companies are cutting back on their investments.

“Corporate America is buying into the recession story, and they are paring their investment spending accordingly,” said Ken Mayland, president of ClearView Economics.

The factory orders report came a day before the release of the Institute of Supply Management’s gauge of activity in the U.S. services sector for October. That index will be released Wednesday and is expected to fall, though not as steeply as its sister manufacturing index did Monday, when it dropped to its lowest level since the country’s last deep recession, the 1981-82 downturn.

Automakers also reported terrible October sales figures on Monday, with sales down 45 percent at General Motors Corp., 30 percent at Ford Motor Co., 25 percent at Honda Motor Co. and 23 percent at Toyota Motor Corp.

The government reported last week that the overall economy, as measured by the gross domestic product, shrank at an annual rate of 0.3 percent in the July-September quarter. Two straight quarters of lower GDP generally mean a recession, and many economists expect the fourth quarter to be worse than the third.

The nonpartisan Committee for a Responsible Budget estimates all the government economic and rescue initiatives, starting with the $168 billion in stimulus checks issued earlier this year, total an eye-popping $2.6 trillion.

Besides the borrowing numbers, Treasury on Monday released estimates by major Wall Street bond firms projecting that total borrowing for this budget year, which began Oct. 1, will total $1.4 trillion, nearly double the previous record.

Major Wall Street firms projected the deficit will hit $988 billion for the current budget year, more than twice the record. In July, the administration projected a deficit for this year of $482 billion, but that was before the financial crisis erupted in September.

Supporters of the government rescue packages argue that the ultimate cost to taxpayers should end up being a lot smaller, partly because the Federal Reserve is extending loans to banks that should be paid back.

Recession Will Likely Be Long, Deep Says Consumer Spending Trend

October 31, 2008

By Patrice Hill
The Washington Times

Consumers this summer pulled back on spending by the most since 1980, driving the economy into what analysts expect to be one of the nastiest recessions in decades.

The nation’s legions of shoppers started out the summer cutting back on purchases from food and clothing to cars primarily because of record high gas prices of more than $4 a gallon. But the trend worsened even as gas prices dropped with the approach of fall, when a severe credit crisis caused huge stock losses, job cuts and an unprecedented collapse in consumer confidence.

Battered consumers cut spending by 3.1 percent, curbing purchases of both essential and discretionary goods such as clothing, newspapers, food and fuel by 6.4 percent — the most since 1950 — and slashing purchases of big-ticket items such as cars and appliances by a devastating 14 percent, the Commerce Department reported Thursday.

$100 dollar bills are being counted in this undated handout ...

Consumers barely maintained spending on services from haircuts to sports and entertainment.

Consumers normally fuel 70 percent of economic activity and continued to spend during the last recession in 2001, but their rare retraction in the latest quarter caused the economy to shrink by 0.3 percent.

With a multitude of developments from job losses to falling credit card limits conspiring to keep consumers at bay, analysts say, the economy is in for a long slog. A recovery may not arrive until this time next year.

“The U.S. economy has clearly moved into recession,” said Swiss Re economist Kurt Karl. “The outlook has deteriorated sharply over the past two months. The credit crisis will have a severe impact on the real economy — in the U.S. and globally.”

Mr. Karl held out hope that the economy will improve in the second half of next year after the banking system and financial markets slowly stabilize and the housing market ends its steep fall.

Read the rest:
http://www.washingtontimes.com/news/2008/
oct/31/consumers-signal-bad-recession/

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American Consumers Borrow Even More

By JEANNINE AVERSA, AP Economics Writer

WASHINGTON – Beaten down and watching their wealth shrink, Americans are burrowing ever deeper — cutting back on spending and spelling more trouble for the sinking economy.

One of the biggest problems saddling the country is damage from the housing market’s collapse. Mounting foreclosures, falling home prices and soured mortgage investments are taking their toll on both individuals and businesses alike.

Federal Reserve Chairman Ben Bernanke, who is scheduled to speak via satellite Friday at a Berkeley, Calif., conference on the mortgage meltdown, is likely to call on government officials and lawmakers to keep working on ways to provide more relief.

The Bush administration is considering a plan that would help around 3 million struggling homeowners avoid foreclosure by having the government guarantee billions of dollars worth of distressed mortgages. The plan also could include loan modifications that would lower interest rates for a five-year period.

Fallout from the housing meltdown has spurred the worst global credit and financial crisis in more than a half century. To combat the problems, the government has taken a flurry of bold steps. The Treasury Department is pouring $250 billion into banks in return for partial ownership and the Fed this week started buying mounds of debt from companies. It also slashed interest rates to 1 percent, a level seen only once before in the last half century.

A new batch of economic reports out Friday is likely to offer fresh confirmation of the stresses weighing on American consumers. Income growth is expected to barely budge in September, inching up just 0.1 percent, according to economists’ estimates. Consumers probably trimmed their spending during the month by 0.3 percent, economists predict.

Read the rest:
http://news.yahoo.com/s/ap/20081031/ap_on_bi_ge/
financial_meltdown;_ylt=Al6I_fO7EM5xBSCF2EJtjBCs0NUE

Where McCain, Obama stand on the issues

October 13, 2008

By CALVIN WOODWARD, Associated Press Writer 

A look at where Democrat Barack Obama and Republican John McCain stand on a selection of issues:

ABORTION

McCain: Opposes abortion rights. Has voted for abortion restrictions permissible under Roe v. Wade, and now says he would seek to overturn that guarantee of abortion rights. Would not seek constitutional amendment to ban abortion.

Obama: Favors abortion rights.

AFGHANISTAN

McCain: Favors unspecified boost in U.S. forces.

Obama: Would add about 7,000 troops to the U.S. force of 36,000, bringing the reinforcements from Iraq. Has threatened unilateral attack on high-value terrorist targets in Pakistan as they become exposed, “if Pakistan cannot or will not act” against them.

Republican presidential nominee Senator John McCain (R-AZ) (L) ...
Above: Republican presidential nominee Senator John McCain (R-AZ) (L) and Democratic presidential nominee Senator Barack Obama (D-IL) stand together onstage after the first U.S. presidential debate in Oxford, Mississippi in this September 26, 2008 file photo. REUTERS/Jim Bourg

CAMPAIGN FINANCE

McCain: The co-author of McCain-Feingold campaign finance law is running his general campaign with public money and within its spending limits. He urged Obama to do the same. He applied for federal matching funds for primaries but later turned them down so he could spend more than the limits. The Federal Election Commission belatedly approved his decision to bypass the primary funds, but rejected McCain’s claim that he needed no such approval. He raised more than $160 million before having to stop to accept the $84 million in public money for the fall. McCain accepted primary campaign contributions from lobbyists.

Obama: The presidential campaign’s fundraising champion has brought in more than $450 million. He is raising private money for his general election, despite his proposal last year to accept public financing and its spending limits if the Republican nominee does, too. Obama refuses to accept money from federal lobbyists and has instructed the Democratic National Committee to do the same for its joint victory fund, an account that would benefit the nominee. Obama does accept money from state lobbyists and from family members of federal lobbyists.

CUBA

McCain: Ease restrictions on Cuba once U.S. is “confident that the transition to a free and open democracy is being made.”

Obama: Ease restrictions on family-related travel and on money Cuban-Americans want to send to their families in Cuba. Open to meeting new Cuban leader Raul Castro without preconditions. Ease trade embargo if Havana “begins opening Cuba to meaningful democratic change.”

DEATH PENALTY

McCain: Has supported expansion of the federal death penalty and limits on appeals.

Obama: Supports death penalty for crimes for which the “community is justified in expressing the full measure of its outrage.” As Illinois lawmaker, wrote bill mandating videotaping of interrogations and confessions in capital cases and sought other changes in system that had produced wrongful convictions.

Read the rest:
http://news.yahoo.com/s/ap/20081013/ap_on_el_pr/where_they
_stand;_ylt=Ah55mSHa3Hh7lFZbmayhE56s0NUE

Bush says anxiety feeding market instability

October 10, 2008

By TERENCE HUNT, AP White House Correspondent
October 10, 2008

WASHINGTON – President Bush said Friday that the government’s financial rescue plan was aggressive enough and big enough to work, but would take time to fully kick in.

“We are a prosperous nation with immense resources and a wide range of tools at our disposal … We can solve this crisis and we will,” Bush said in brief remarks from the White House Rose Garden.
President George W. Bush speaks about the global financial and ... 

Bush spoke as leaders of the world‘s leading economies gathered in Washington amid frozen credit markets, panic selling in stock markets and a looming global recession.

The president noted that major Western economies were working together in an attempt to stabilize markets and end the spreading panic.

“Through these efforts, the world is sending an unmistakable signal. We’re in this together and we’ll come through this together,” Bush said.

Finance ministers and central bankers from the Group of Seven — the United States, Japan, Britain, Germany, France Italy and Canada — were here for a weekend meeting. Bush plans to meet with the leaders on Saturday.

Bush said he understood how Americans could be concerned about their economic future, “that anxiety can feed anxiety and that can make it hard to see all that’s being done to solve the problem.”

Bernanke warns of possible recession

April 2, 2008
By JEANNINE AVERSA, AP Economics Writer 

WASHINGTON – Federal Reserve Chairman Ben Bernanke warned Wednesday the economy may shrink over the first half of this year and that “a recession is possible.” Yet, he didn’t offer any assurances of further interest rate cuts.

US Federal Reserve Bank Board Chairman Ben Bernanke responds ...
US Federal Reserve Bank Board Chairman Ben Bernanke responds to questions during a joint congressional hearing on the country’s economic outlook on Capitol Hill in Washington, April 2, 2008.REUTERS/Jonathan Ernst (UNITED STATES)

Bernanke’s testimony to the Joint Economic Committee was a much more pessimistic assessment of the economy’s immediate prospects amid a trio of crises — housing, credit and financial.

“It now appears likely that gross domestic product (GDP) will not grow much, if at all, over the first half of 2008 and could even contract slightly,” Bernanke told lawmakers. GDP measures the value of all goods and services produced within the United States and is the best barometer of the United States’ economic health. Under one rule, six straight months of declining GDP, would constitute a recession.

Still, Bernanke said that he expects more economic growth in the second half of this year and into 2009, helped by the government’s $168 billion stimulus package of tax rebates for people and tax breaks for businesses as well as the Fed’s aggressive reductions to a key interest rate. Nevertheless, the chairman acknowledged uncertainty about the Fed’s next steps, notwithstanding the mounting economic woes.

 Read the rest:
http://news.yahoo.com/s/ap/20080402/ap_on_bi_ge/
bernanke_congress;_ylt=Al0d0o
x8ZL_k__msZcFHZYas0NUE

Payrolls May Have Slumped for Third Month: U.S. Economy Preview

March 30, 2008

By Bob Willis

March 30 (Bloomberg) — The U.S. lost jobs for a third month in March and manufacturing contracted at the fastest pace in five years, signs the economy continues to turn down, economists said before reports this week.

Payrolls probably shrank by 50,000, according to the median estimate of economists surveyed by Bloomberg News before the Labor Department’s April 4 report. The last time the economy lost jobs for at least three consecutive months coincided with the start of the Iraq War in 2003.

“The economy has slipped into a recession,” said Ethan Harris, chief U.S. economist at Lehman Brothers Holdings Inc. in New York. “We expect the labor market to weaken, with payrolls falling steadily through the middle of next year.”

Job losses, slumping confidence and the biggest plunge in housing in a generation all point to a slowdown in consumer spending that will weaken growth. Federal Reserve Chairman Ben S. Bernanke will testify before Congress this week after lowering interest rates and extending credit to non-banks in an attempt to calm financial markets.

The projected decrease in payrolls would follow a decline of 63,000 in February and a smaller drop in January. The jobless rate likely rose to 5 percent from 4.8 percent, the survey said.

Factory payrolls in March probably shrank by 40,000 workers, reflecting automakers’ efforts to trim costs and a strike at a suppler for General Motors Corp., economists project the jobs report may show.

Strike’s Influence

A walkout by workers at American Axle & Manufacturing over pay and benefits that started on Feb. 26 has idled almost half of GM’s North American workforce. The payroll figures may be reduced by as much as 20,000 workers because of the effects of the strike, according to Morgan Stanley economist David Greenlaw.

Ford Motor Co., which lost $15.3 billion in the past two years, may cut more jobs in North America, Chief Executive Officer Alan Mulally said earlier this month.

“The old ways of doing business are gone,” Joe Hinrichs, Ford’s manufacturing chief, and Marty Mulloy, vice president of labor affairs, said in a March 19 commentary sent to newspapers in communities where Ford has plants. “We must continue to downsize and simply will not have enough jobs for all of our current hourly workers.”

Job losses in financial markets are also mounting following the collapse in subprime lending.

Wall Street banks hit by mortgage losses and writedowns have cut more than 34,000 jobs in the past nine months, the most since the dot-com boom fizzled in 2001, according to the Securities Industry and Financial Markets Association.

Job Losses

This year, banks including Lehman, Citigroup Inc. and Morgan Stanley have been reducing staff in fixed income trading, securitization and investment banking. So far, Lehman has eliminated 18 percent of its workforce, Morgan Stanley has cut 6.2 percent, and Merrill Lynch & Co. has trimmed 4.5 percent.

“Rising unemployment should continue to slow wage growth, adding to the strain on consumers,” said Lehman’s Harris.

Manufacturers are retrenching as demand weakens. The Tempe, Arizona-based Institute for Supply Management may report April 1 that its factory index fell to 47.5 this month, the lowest level since April 2003, from 48.3 in February, according to the survey median. A reading of 50 is the dividing line between expansion and contraction.

The following day, the Commerce Department may report that factory orders in February dropped 0.8 percent following a 2.5 percent decline the prior month.

Services Contract

In another sign that the housing recession is dragging down other areas, service industries contracted for a third month in March, the ISM is projected to report on April 3.

The group’s non-manufacturing index, which covers 90 percent of the economy, fell to 48.5 this month, from 49.3 in February, according to the median forecast. Services haven’t contracted for three consecutive months since 2001-2002, when the economy was emerging from the last recession.

“The tightening of credit conditions and the deepening of the housing contraction are likely to weigh on economic growth over the next few quarters,” the Fed said March 18 following its last policy meeting. “Growth in consumer spending has slowed and labor markets have softened.”

Bernanke will elaborate on the outlook before the Joint Economic Committee of Congress on April 2.

Seeking to ease credit, restore confidence to financial markets and cushion the slowdown, the Fed on March 18 lowered its key rate by three-quarters of a point and vowed to act “as needed” to cushion the economy. The Fed has cut the benchmark rate by 3 percentage points since September.

Fire Sale of Bear Stearns Bear Sparks Rout, Bush Tries to Calm

March 17, 2008
By Jack Reerink 

NEW YORK (Reuters) – A fire sale of Bear Stearns Cos Inc (BSC.N) stunned Wall Street and pummeled global financial stocks on Monday on fears that few banks are safe from deepening market turmoil.

A U.S. two dollar bill is taped to the revolving door leading ...
A U.S. two dollar bill is taped to the revolving door leading to the Bear Stearns global headquarters in New York March 17, 2008.(Kristina Cooke/Reuters)

Trying to assuage worries that the credit crisis is spinning out of control, President George W. Bush said the United States was “on top of the situation,” but the sell-off intensified in the early afternoon.

The U.S. Federal Reserve geared up for a deep cut in interest rates on Tuesday to blow money into the fragile financial system — the latest in a series of rate cuts that has brought down borrowing costs by 2-1/4 percentage points and hammered the U.S. dollar to record lows.

Staff at Bear Stearns‘ Manhattan headquarters were welcomed to work on Monday by a two-dollar bill stuck to the revolving doors — a spoof on the bargain-basement price of $2 per share that JPMorgan Chase (JPM.N) is paying for the firm. A hopeful Coldwell Banker real estate agent was hawking cheap apartments to employees who saw the value of their stock options go up in smoke.

The combination of Bear Stearns’ bailout and the Fed’s offer on Sunday to extend direct lending to securities firms for the first time since the Great Depression highlighted just how hard the credit crisis has hit Wall Street.

And it scared market players worldwide….

Read the rest:
http://news.yahoo.com/s/nm/20080317/bs_nm/bearstearns_fed_dc;_ylt=
Agm1uUl9fJe7eEc0zjCowb.s0NUE

Economy Hammered by Toxic Blend of Ailments

March 14, 2008
Almost everything seems to be going wrong for the American economy at once. People are buying less, but most things are costing more. Mortgage rates are rising, the dollar is falling and prices of key commodities like oil are leaping from one record high to the next.
.On Thursday, the dollar plumbed new lows against the Japanese yen and several other major currencies; the price of an ounce of gold jumped above $1,000 for the first time; and lenders raised home loan rates once again. Government figures showed retail sales fell in February as consumers cut back on cars, furniture and electronics.

Stocks fell sharply after the retail sales report was released early in the day, and a large investment fund said it was nearing collapse. The volatility that has defined the market lately continued unabated.

The Standard & Poor’s 500-stock index fell 2 percent in the morning, then rebounded partly in reaction to a report that said banks were nearing the end of subprime mortgage losses. It was up nearly 1 percent in the afternoon before paring that gain to close up 0.5 percent, to 1,315.48 points. The Dow Jones industrial average closed up 35.5 points, to 12,145.74 points.

A toxic blend of economic and financial developments is testing policy makers and lawmakers who are struggling to contain the slump brought on by the collapse of the mortgage market, a downturn that now looks sure to push the economy into a recession. Though current conditions are a far cry from the 1970s, resurgent inflation is raising the threat of stagflation — a condition in which unemployment and the price of goods and services both rise.

Read the rest:
http://www.nytimes.com/2008/03/14/business/14econ.html?_r=1&hp&oref=slogin

U.S. economy impacts global markets

March 14, 2008

By Patrice Hill 
The Washington Times
March 14, 2008

Global markets gyrated wildly yesterday on signs that the U.S. economy and mortgage markets continue to unravel despite strenuous efforts to revive them.

A woman shops at a store in Miami. US retail sales fell an unexpectedly ...
A woman shops at a store in Miami. US retail sales fell an unexpectedly strong 0.6 percent in February as consumers retrenched in the face of economic turmoil and rising energy costs.
(AFP/Getty Images/File/Joe Raedle)

The dollar hit new lows, falling below 100 yen for the first time in 12 years, sending oil and gasoline prices to record highs and driving gold prices above $1,000 an ounce for the first time. Credit market turmoil resumed amid a massive liquidation of mortgage assets by the Carlyle Capital Corp. and other hedge funds that made losing bets on prime mortgages.
Investors in the U.S. and abroad were stunned by news of another big drop of 0.6 percent in retail sales last month as overstretched consumers, fearful of recession and weighed down by the rising cost of necessities, dramatically pulled back spending on everything from cars and gasoline to restaurants and groceries.
Chart shows seasonally adjusted retail sales; 1c x 2 3/8 inches; ... 

Read the rest:
http://www.washingtontimes.com/apps/pbcs.dll/article?AID=/20080314/BUSINESS/729448651/1001

U.S. Economy In Recession (Or Very Close)

March 12, 2008

By John E. Carey
Peace and Freedom
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The United States is in a recession and economic storm clouds loom in Asia. 

U.S. homeowners have more debt than ownership (equity) causing many to “bail out” on their mortgages.  Banks now own more and more houses.  To make it easier to buy, the Federal Reserve has lowered interest rates over and over again.  The Fed may lower rates again next week.

The dollar is way down compared to the euro — and just about all other reputable currency — and oil prices are up because of this, high world-wide demand and limited refining capacity.

A US banknote is reflected on a euro coin. The dollar found ...

A US banknote is reflected on a euro coin. The dollar found some support Monday, gaining ground on the euro on warnings against excessive exchange rate volatility from European Central Bank head Jean-Claude Trichet.(AFP/File/Joel Saget)
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In China, where banks hold over a trillion dollars in foreign exchange reserves, a sell-off of dollars could also depress the dollar further.  Fear of such an action alone is enough to make economists wary of pressuring China.

Farmers in the Midwest of America are delighted by high corn prices – much attributable to demand for corn-made ethanol.  But the high price of corn is a burden to those trying to feed livestock.

The good news is that it is so expensive to feed cattle right now that the farmers are slaughtering beef at a better than average rate.  Beef is cheep just now (but watch out next year).

The price of wheat per bushel has doubled in the last few months.  This means bread, pizza and bagels are going up in price.  Beer too!

Because of the low dollar, screwy farm prices and high gasoline prices, pretty much everything in the grocery store is costing more.

Retail sales are way down and applications for unemployment are way up.

But recession has a real definition and this, plus politics, has prevented the White House from using “The ‘R’ Word” much.

In macroeconomics, a recession is a decline in a country’s gross domestic product gross domestic (GDP), or negative real economic growth, for two or more successive quarters of a year.

For the U.S., the judgment of the business-cycle dating committee of the National Bureau of Economic Research regarding the exact dating of recessions is generally accepted. The NBER has a more general framework for judging recessions:
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A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.
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A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough. Between trough and peak, the economy is in an expansion. Expansion is the normal state of the economy; most recessions are brief and they have been rare in recent decades.
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So, we at Peace and Freedom believe we Americans are in a recession and we see dark economic clouds world-wide, especially in Asia.

China’s high January and February readings for inflation have increased the pressure on the government to take action to counter price rises.  In China, annual consumer inflation jumped to 8.7 percent in February after hitting 7.1 percent in January, the worst in more than 11 years.

But much of the current economic turbulence in China, the communist government says, is attributable to the largest winter snowfall in 100 years.  China says their economy will quickly rebound.

A staff counts Chinese Renminbi currency at a bank in Baokang, ... 

Confidence among Australian consumers weakened sharply in March to its lowest level since 1993, according to data released Wednesday, sparking economists’ predictions that the central bank is unlikely to continue a run of interest rate hikes.

The International Monetary Fund has warned Vietnam that its fast-growing economy is overheating. It has advised Hanoi to adopt a more flexible exchange rate regime and to tackle imprudent lending practices by commercial banks, in order to help control inflation.
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Vietnam’s Communist authorities are battling to curb inflation, which, driven by higher food and energy prices, hit 15.7 per cent in February and has fuelled labor unrest, especially among factory workers who say they cannot make ends meet.

Japan’s economy has so far shown resiliency, but experts on the world’s second largest economy worry that Japan’s export-led recovery could stall if US economic troubles deepen.

At the U.S. Department of the Treasury, the leadership has confidence that the U.S. economy will rebound in the next quarter.

The U.S. economy is going through a rough patch but, thanks to a government fiscal package worth some $150 billion, should start recovering as soon as the second quarter, a senior Treasury official said on Tuesday.

“The booster shot that’s been given to the U.S. economy is going to boost consumer spending, is going to boost business investment — that will lead to both higher growth and higher job creation,” Robert Kimmitt, Deputy Treasury Secretary told Sky News in the UK.

“Many economists predict, and we agree, that we will see that upturn in the second quarter,” he said.

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We’ll have to wait and see.

Our advice is to pay off your credit card debt, reduce spending and hunker down.

The U.S. Treasury building designed by Ammi Burnham Young
The U.S. Treasury building

A Few Ways I Can Tell We Are In A Recession
(These may or may not apply to your neighborhood….)

1.  The AA clubhouse starts charging for matches and coffee — and is considering a ‘no smoking’ policy just so the gang can save money.
2.  The church no longer supplies a pen near the pile of the collection envelops.
3.  People actually born in America are eating at the Peruvian Pollo Chicken restaurant.
4.  The neighborhood restaurant no longer has music.  Now you do karaoke.
5.  You no longer know the pizza man’s name.
6.  You’re going to have to use our IRS refund for gas instead of a vacation.
7. A resident of the shelter is wearing a tie and a lapel pin from a bank.
8. A bunch of realtors joined the prayer group.
9. The number of Spanish speaking illegals standing on your street looking for work has doubled.
10.  You’re looking for a lock for your gas cap….