The drop in Q1 was much worse that had been expected, economists presumed that the drop would only be 4.7% gross in domestic product, this is the broadest measure of the nation’s economic activity.

The 6.1% for first quarter was the second largest drop recorded in 26 years, the worst was the 2008 Q4, the GDP fell 6.3% then.

The video tries to look at the bigger picture and explains that there is still an upside, investors do not seem to be upset by the news. In the first half hour of trading on Wednesday, major U.S. stock indexes were all up more than 1%.

Watch the video below.

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The Telegraph download king arthur free The Mummy psp Transformers film Godsend hd reports that under normal circumstances a few tweaks in the budget would normally mean that the people of Britain would see a little extra in their pockets. 2009 is different as we are now in a full-blown recession and that unemployment is rising and we are still in a housing slump, oh did I forget the billions of pounds that we are now in debt.

Today’s Budget is not about spin as it has been for many years; this is a “Budget of necessity.” What we do know is Alistair Darling, the Chancellor and his Treasury advisers have little to play with after the government stepped in to bail out our banks.

So what do you think Alistair Darling can do to help revive the UK economy?

U.S. House of Representatives Speaker Nancy Pelosi made her remarks to the full house just before the vote was set to take place, in her speech she slammed both Bush and the Republicans for “budgetary recklessness” and poor handling of the economy, this is what has lead to the current “chaos” in the financial system.

The $700 billion bailout bill of the Bush administration did not go through; already this has lead to panic in the markets. Congress is still in talks trying to come up with another solution. Once thing is certain, if something is not done soon, then we could be in for a long bumpy ride.

Read the full article at Reuters

Bill Heard Chevrolet is yet another victim along with about 2,700 staff who is being hit hard with the economy crisis and raising fuel bills.

Bill Heard are a huge car dealership and are located in Nevada, Texas, Tennessee, Florida, Alabama and Georgia and have announced on Tuesday that they are closing down thirteen locations across the country, Huntsville, Alabama is included in one of the thirteen that will close. A Chevrolet representative was unable to confirm how many job losses these closures will cause.

The statement by Bill Heard representative “Rising fuel prices, a product portfolio of mostly heavy trucks and sport utility vehicles, economic recession, unfavorable local market conditions for vehicle sales, the crisis in the banking and financing sectors, and other factors all combined to create a business environment in which the company simply did not have the resources needed to continue to operate.”

If you have your car already on the Bill Heard Chevrolet lot to be services or fixed they will finish all work before they close down.

Source: waaytv

The National Association of Realtors said that June figures had slowed to an annual rate of 4.86 million, compared to 4.99 million in May, a drop of 2.9 percent. This makes it the lowest rate since 1998, when the existing home sales fell to an annual pace of 4.83 million.

The existing home sales rate which include co-ops, condominiums, single-family and town homes are down 15.5% from 5.75 million units sold in June 2007.

Although there seems to be more homes up for sale, house prices just keep dropping. The amount of homes for sale in the U.S. rose by 0.2% in June to 4.49 million.

The average price for a home in June fell to $215,100, compared to $229,000 in the same period last year, that’s a drop of 6.1%.

Read more news on property

Source

Blanchflower has said “I think we are going into recession and we are probably in one right now.” Blanchflower has been calling for an interest rate cut for some time, he said “It’s not too late to stop it but we have to act right now. Monetary policy has been far too tight for too long.”

Blanchflower fears that this downturn could prove much worse for the UK than the US, unemployment is already up and there are now fears that interest rates could jump to 7 per cent, current levels are at 5 per cent.

Blanchflower has told his Bank of England colleagues that they should worry less about inflation, as he feels that this is just temporary. He thinks that his colleagues should make the decision to cut interest rates sharply.

It certainly looks as if the UK is entering its first recession in two-decades, but it is not to late to stop it from happening, the Bank of England needs to act quick.

Source

Export Development Canada vice-president and chief economist, Peter Hall has said in a recent report that in addition to U.S. housing woes, housing starts were down 56 per cent year-over-year during May in the United Kingdom. They were down 18 per cent during the first quarter of the year in Spain and 18 per cent year-over-year in May in France.

Hall went on further that housing starts in Canada are now “soaring on the strength of the domestic economy and a huge dollop of very sell-timed fiscal stimulus.” He did warn however that, if their was a continuing excess of housing starts over requirements, then Canada’s turn could be next for a housing crisis.

This reports follows the Canadian government’s attempt to try and avoid a housing crisis, they did this by no longer insuring mortgages with less than 35-year amortization periods, as well as less than five-per-cent down payments.

Just after the Canadian government made these changes to mortgages, the United States Federal Reserve Board then changed their lending polices.

Source

We knew from the beginning that the Bank of England had a tough decision to make; first they had to think about inflation while at the same time they have to keep a close eye on the current credit crisis.

Trevor Child, Head of Sales and Marketing at CHL mortgages, commented: “It is unsurprising that the MPC has decided to hold Base Rate at 5% this month given the recent Inflation figures and the Bank’s own view on Inflation’s expected rise over the coming months.”

He also added “The medium to long-term view may be that Inflation will move back towards the Treasury’s target of 2% next year, however, shorter-term factors are steering the ship at present.”

Read his full article at Introducer Today

This news will come as a shock to those in the housing sector, as they were calling for a 0.25% reduction in the base rate. They wanted the cost of borrowing to go down, to try and jump start the market for first-time buyers.

Inflation hit 3.3% last month, many in the industry already knew that the interest rates would remain at 5%, but was this the right decision.

Ian McCafferty, chief economic adviser for the CBI, has said “It was of little surprise to the markets that the bank held rates unchanged this month.” He also added “The MPC needs to continue to stick to its mandate of delivering stability over the medium-term. A rate rise now would do little to influence the further rise in inflation expected in the near-term.”

Source

Has the Bank of England made the right decision?

House prices for the overall year are now down by 8.7 percent than the year before, this current decline is much larger than in 1992. Since the peak last year, at least £20,000 has been wiped of the value of the average home.

The Bank of England will be studying these figures at their monthly meeting today, as they have to decide what to do with interest rates, but the smart money will be on them keeping things the same this month.

Over the last decade homeowners have seen their houses almost treble in value, but now as the credit crunch kicks in they are slowly seeing that profit disappear.

As the credit crunch starts to take a firm grip on the UK, mortgage lenders are less willing to part with their cash so are making the criteria harder for people to get a mortgage. The housing market has all but dried up, mortgage approvals are down by almost half, as a result more analysts’ fear that we are heading towards a recession.

Source – Reuters