Economy sheds 63,000 jobs; recession looms

The economy shed 63,000 jobs in February, the government said on Friday, the fastest falloff in five years and the strongest evidence yet that the nation is headed toward — or may already be in — a recession.

Manufacturers and construction companies, reeling from the worst housing slump in decades, led the declines in payrolls. But the losses were spread across a broad range of businesses — including department stores, offices and retail outlets — putting increased pressure on consumers’ pocketbooks.
http://www.nytimes.com/2008/03/07/business/07cnd-econ.html?ex=1362632400&en=13e8a4f652154631&ei=5124&partner=permalink&exprod=permalink

Could the Dollar Be On The Way Out?

The dollar has been the world's reserve currency for more than 60 years. What happens if people no longer want to hold dollars? - MT

Beaten down by fears of a U.S. recession, the dollar is falling with new speed -- creating severe challenges not just for the U.S., but also for sugar traders in Brazil, central bankers in the Persian Gulf and a host of others.The greenback's biggest detractors -- a small but growing group -- say the currency is in danger of eventually losing its place as the world's dominant currency. Jim Rogers, a well-known commodity investor and a former partner of famed currency trader George Soros, has a particularly bleak assessment: "The dollar is a terribly flawed currency and its days are numbered," he said in a recent interview. He cited the U.S.'s huge foreign-held debt as the biggest cause.

http://online.wsj.com/article/SB120423483765800801.html?mod=hps_us_pageone

http://online.wsj.com/article/SB120424991252301815.html?mod=hps_us_pageone

http://www.nytimes.com/aponline/business/AP-Dollar.html?scp=2&sq=Dollar&st=nyt

http://www.nytimes.com/reuters/business/business-markets-forex.html?scp=1&sq=Dollar&st=nyt

http://krugman.blogs.nytimes.com/2007/11/08/dollar-doldrums/?scp=4-b&sq=Dollar&st=nyt

Stagflation Fears Return

The U.S. faces an unwelcome combination of looming recession and persistent inflation that is reviving angst about stagflation, a condition not seen since the 1970s.

Inflation is rising. Yesterday the Labor Department said consumer prices in the U.S. jumped 0.4% in January and are up 4.3% over the past 12 months, near a 16-year high. Even stripping out sharply rising food and energy costs, prices rose 0.3% in January, driven by education, medical care, clothing and hotels. They are up by 2.5% from the previous year, a 10-month high.http://online.wsj.com/article/SB120355396795281551.html?mod=hps_us_whats_news

Could a world credit meltdown be brewing?

Analysts have talked about these kinds of things for years ... complex securities that used to manage risk but end up actually increasing risk, falling like dominos should the underlying market start to come apart. Read on as the New York Times' GRETCHEN MORGENSON explains the risks and potential perils that may be ahead for consumers, investors and financial institutions.:

Few Americans have heard of credit default swaps, arcane financial instruments invented by Wall Street about a decade ago. But if the economy keeps slowing, credit default swaps, like subprime mortgages, may become a household term. Credit default swaps form a large but obscure market that will be put to its first big test as a looming economic downturn strains companies’ finances.

Like a homeowner’s policy that insures against a flood or fire, these instruments are intended to cover losses to banks and bondholders when companies fail to pay their debt.

The market for these securities is enormous. Since 2000, it has ballooned from $900 billion to more than $45.5 trillion — roughly twice the size of the entire United States stock market.

No one knows how troubled the credit swaps market is, because, like the now-distressed market for subprime mortgage securities, it is unregulated. But because swaps have proliferated so rapidly, experts say that a hiccup in this market could set off a chain reaction of losses at financial institutions, making it even harder for borrowers to get loans that grease economic activity.

It is entirely possible that this market can withstand a big jump in corporate defaults, if it comes. But an inkling of trouble emerged in a recent report from the Office of the Comptroller of the Currency, a federal banking regulator. It warned that a significant increase in trading in swaps during the third quarter of last year “put a strain on processing systems” used by banks to handle these trades and make sure they match uphttp://www.nytimes.com/2008/02/17/business/17swap.html?ex=1360990800&en=891

Is the U.S. already in a recession? Sure looks like it.

Almost daily news is released showing the U.S. economy is slowing. The consensus seems to the we are already in a recession. What are the implications for the War in Iraq? U.S. foreign policy? Unemployment and the economic health of the U.S. moving forward? What would be the implications for you (and the rest of the world) if you were abroad as a foreign correspondent and the world's largest economy heads into a deep downturn? How would you report this story? - MT

(PAGE ONE - WSJ, 2-6-08) Recession worries surged, slamming financial markets, amid signs that service businesses -- from hotels and retailers to banks -- may be stumbling in both the U.S. and Europe.In the U.S., a key barometer of the strength of the service sector dropped to its lowest level since October 2001, and suggested those businesses are now contracting. In Europe, a similar indicator fell to a four-year low.The readings fanned fears on Wall Street that the U.S. is about to tip into recession, if it hasn't already done so, particularly startling analysts who had viewed services as the nation's last bastion of economic growth.http://online.wsj.com/article/SB120221986525544121.html?mod=hps_us_pageone

Stocks plummeted on Wall Street on Tuesday after a business survey provided another strong signal that the United States might be in the early stages of a recession. The Dow Jones industrial average fell 370 points as the market experienced its worst day in nearly a year. http://www.nytimes.com/2008/02/06/business/06stox-web.html?ex=1360040400&en=9470859e1128992b&ei=5124&partner=permalink&exprod=permalink

NEW YORK (AP) -- Lingering hopes that the U.S. economy might avert a recession withered Tuesday after the nation's service sector -- its banks, travel companies, contractors and stores, among others -- shrank for the first time in five years.http://www.nytimes.com/aponline/business/AP-Economy.html?scp=4&sq=Recession&st=nyt

Exporters brace for a U.S. pullback

HONG KONG — Asian exporters are already feeling the effects of an American economic downturn — effects that may be magnified by a weak dollar, volatile world markets and fears that more bad loans may be ticking in the coffers of American companies.

http://www.nytimes.com/2008/01/25/business/worldbusiness/25export.html?ex=1359003600&en=0a06d630629b4784&ei=5124&partner=permalink&exprod=permalink

Stocks plunge abroad in global sell-off

By DAVID JOLLY and HEATHER TIMMONS
Published: January 21, 2008
Indexes in Europe fell as much as 7 percent after a huge sell-off in Asia as concerns increased that the turmoil in the United States mortgage markets is spreading.
http://www.nytimes.com/2008/01/21/business/22stox-web.html?ex=1358658000&en=db95f234a96a382f&ei=5124&partner=permalink&exprod=permalink

Global economic problems loom over U.S.

Global growth has aided the U.S. economy the past five years, but policymakers are now grappling with what to do as the economy in the U.S. and elsewhere slows - how do you enact policy when so many things that influence the U.S. are outside its borders?


Many economists suggest that it may already be too late to change the course of the economy over the first half of the year. With a wave of negative signs gathering force, economists, policy makers and investors are debating just how much the economy could be damaged in 2008. Huge and complex, the American economy has in recent years been aided by a global web of finance so elaborate that no one seems capable of fully comprehending it. That makes it all but impossible to predict how much the economy can be expected to fall before it stabilizes.

http://www.nytimes.com/2008/01/13/business/13econ.html?ex=1357966800&en=66b63003878fb9c1&ei=5124&partner=permalink&exprod=permalink