Business news with words american+credit+recession. 18 news.

WASHINGTON - The housing market is tanking, the credit markets are in crisis and economists fear a recession could be on the way - but in November at least, that wasn't enough to slow down the American consumer.

The housing market is tanking, the credit markets are in crisis, and economists fear a recession could be on the way - but in November at least, that wasn't enough to slow down the American consumer. Personal spending rose 1.1 percent last month, the biggest...

The housing market is tanking, the credit markets are in crisis, and economists fear a recession could be on the way -- but in November at least, that wasn't enough to slow down the American consumer.

The housing market is tanking, the credit markets are in crisis, and economists fear that a recession could be on the way -- but in November at least, that wasn't enough to slow down the American consumer.

The housing market is tanking, the credit markets are in crisis, and economists fear a recession could be on the way ? but in November, at least, that wasn't enough to slow down the American consumer.

After a bumper year, the luxury-goods industry is heading for uncertain times MORE than any other industry, the luxury-goods business needs people to feel good about spending money. So at a recent conference in Moscow, Bernard Arnault, the head of Moet Hennessy Louis Vuitton (LVMH), the world's biggest luxury-goods group, went to great lengths to dismiss investors' fears about the impact on the industry of America's credit crisis, a possible recession and the weak dollar. Indeed, Mr Arnault said he expects the industry's sales almost to double in the next five years, thanks to strong demand from emerging markets and the creation of new wealth across the globe. After a depressing period at the beginning of the decade when the terrorist attacks in America, the outbreak of SARS and the war in Iraq reduced international travel and people's appetite for frivolous things, the industry has had three excellent years. According to Bain, a consultancy, sales of luxury goods grew by 9% in 2006 to EURO159 billion ($200 billion) and will reach about EURO170 billion this year, which would be double the 1996 figure. Europe remains the biggest market, with about 40% of sales, though the strongest growth is in China, Russia, the Middle East and some Latin American countries. ...

Any U.S. economic contraction would probably have a ripple effect across the globe because American consumers would be buying fewer goods from abroad.

EUROPEAN stocks capped the longest streak of weekly losses since August after the Federal Reserve cut its United States growth forecast, fueling concern the world's largest economy is sliding into recession. Porsche AG, which relies on the US for more than a third of its sales, paced declines by exporters as the American currency dropped to a record low against the euro. UBS AG led a retreat in bank shares on speculation the worst of the credit-market turmoil is not over. Mining stocks fell with metal prices. The Dow Jones Stoxx 600 Index dropped 1.4 percent to 357.74, the fourth straight week of losses. The benchmark has lost 11 percent since reaching a 6 1/2-year high on June 1, on concern defaults among US mortgage borrowers with the poorest credit profiles will hurt economic growth and corporate earnings, Bloomberg News said. "The situation is getting worse with oil and credit problems weighing on equity markets," said Wolfram Mrowetz, who manages the equivalent of

EUROPEAN stocks slumped to their lowest in almost two months last week, paced by commodity producers as metal and oil prices fell. Boliden AB, Europe's third-biggest copper refiner, and Anglo American Plc, the world's second-largest miner, led commodity stocks lower. Porsche AG dropped as the weak US dollar hurt the value of US sales translated into euros. "The picture is dimming for commodity stocks," said Herbert Perus, who helps oversee the equivalent of US$57 billion as head of global equities at Raiffeisen Capital Management in Vienna. "The word recession is heard more and more often from the US. It's a very sentiment-driven market with a lot of scared investors." The Dow Jones Stoxx 600 Index declined 1.3 percent last week. The benchmark has fallen nine percent since reaching a 6 1/2-year high on June 1 because of concern defaults among US mortgage borrowers with the poorest credit profiles will hurt the rest of the economy. "It's reasonable to

Recession in America looks increasingly likely. Can booming emerging markets save the world economy? IN 1929, days after the stockmarket crash, the Harvard Economic Society reassured its subscribers: "A severe depression is outside the range of probability". In a survey in March 2001, 95% of American economists said there would not be a recession, even though one had already started. Today, most economists do not forecast a recession in America, but the profession's pitiful forecasting record offers little comfort. Our latest assessment (see article) suggests that the United States may well be heading for recession. Granted, GDP grew by a robust 3.9%, at an annual rate, in the third quarter. Granted also, revisions may well push this figure up. But that was the past. More timely signs suggest that the economy could stall in this quarter. By early next year, output and jobs could be shrinking. The main cause is the imploding housing market. Experts said that house prices could never fall nationwide. But fall they have, by 5% in the past 12 months. Residential investment has collapsed, but a glut of unsold homes means that prices have much further to drop. Americans' spending is likely to be dented much more by a fall in house prices than it was in 2001 by the stockmarket's collapse. With house prices lower and credit conditions tighter as a result of the subprime crisis, households can no longer borrow against capital gains to support their spending.

AMERICAN billionaire investor said yesterday that problems in the US subprime mortgage market will likely weigh on consumers for up to two years, but that the US economy will weather the storm. The subprime problem "is having an impact," Buffett said on his first visit to South Korea. "It will have more of an impact." Rising default rates among US mortgage holders with poor credit histories have rattled global credit, stock and currency markets since August and raised concerns about a possible recession in the US economy, a major export market for Asian companies. "In the next 6 months, one year, two years the problems in the mortgage market can cause a lot of problems with consumers and hurt buying power in the United States," he said at a press conference after arriving earlier in the day from China on his private jet. However, the US economy has often had to face various difficulties and the present was no exception, Buffett said.

INTERNATIONAL investors sold a record amount of United States financial assets in August as tightening access to credit threatened economic growth and spurred an exodus from American equities. Total holdings of equities, notes and bonds fell a net US$69.3 billion after an increase of US$19.2 billion in July, the Treasury Department said yesterday in Washington. Including short-term securities such as Treasury bills and non-market trades such as stock swaps, foreigners sold a net US$163 billion, compared with a gain of US$94.3 billion a month earlier. Demand for US stocks overseas declined as the deepening housing recession and credit market turmoil threatened investment and hiring, slowing the economy. "There is acute uncertainty in the market," said Gabriel De Kock, chief currency economist at Citigroup Global Markets Inc in New York, before the report. "There are lots of people who are reducing their risk and taking money off the table." Economists

US stocks have risen for a fourth straight week, sending the Standard & Poor's 500 Index to a record, after employment growth eased concern that mortgage losses will cause a recession. Fannie Mae and Morgan Stanley led banks, brokerages and other financial firms in the S&P 500 to their biggest rally since March 2003. Homebuilders surged the most since November 2000 after Citi Investment Research said their shares are cheap, Bloomberg News reported. The Labor Department said American payrolls increased by 110,000 jobs in September and the prior month's decrease of 4,000 was revised to a gain of 89,000. That quelled concern that home-loan losses are dragging down the economy. "Stocks look very good to me," said John Lynch, chief market analyst at Evergreen Investments LLC, which manages US$280 billion in Charlotte, North Carolina. "The jobs report suggests continued economic growth, which should translate to continued profit growth and good market performance." The S&P 500 rose two percent last week to 1,557.59. The index has rebounded 11 percent since August 15, erasing US$1 trillion of losses. The Dow Jones Industrial Average ended the five-day period up 1.2 percent at 14,066.01 after closing at a record on October 1. The Nasdaq Composite Index added 2.9 percent to 2,780.32, the highest since February 2001. The yield on 10-year US Treasury notes rose about 0.05 percentage point to 4.64 percent. Traders pared bets that the Federal Reserve will lower interest rates this month because of less concern the housing slump will weigh on the broader economy. The central bank reduced its benchmark lending rate by half a percentage point to 4.75 percent on September 18. Financial shares in the S&P 500 rose 4.5 percent. "We expect to return to a normal earnings environment in the fourth quarter," Citigroup Inc Chief Executive Officer Charles Prince said. His company is the largest US bank. Former Federal Reserve Chairman Alan Greenspan also said the credit slump may be ending. Fannie Mae, the largest provider of money for US home loans, rose 11 percent to US$67.30. Morgan Stanley, the second-largest US broker by market value, climbed 9.4 percent to US$68.90. Goldman Sachs Group Inc, Morgan Stanley's bigger rival, added 5.4 percent to US$228.50. The S&P Supercomposite Homebuilding Index gained 12 percent, the most in almost seven years. Citi analyst Stephen Kim said at the start of last week that the shares of builders such

Thanks to China, an American recession need not cause the whole world to crash ECONOMISTS have long warned that the world economy could not fly for ever on the single engine of American demand. A one-engined plane is more likely to crash. With its housing market blighted and its consumers growing fearful, America now faces a mounting risk of recession. The good news, however, is that the world has found some powerful new engines in China and other emerging economies. Even as credit markets seize up, a world economy that is less dependent on the United States is more likely to stay aloft. The power of this new motor is startling. For several years, emerging Asian economies have accounted for more of global GDP growth than America has. This year China alone will for the first time accomplish the same feat all on its own (at market exchange rates), even if American growth holds up. American consumer spending is roughly four times the size of China's and India's combined, but what matters for global growth is the extra dollars of spending generated each year. In the first half of 2007 the increase in consumer spending (in actual dollar terms) in China and India together contributed more to global GDP growth than the increase in America did.

After a rate-cut, fears of inflation IT SEEMS odd to be talking about it just after the Federal Reserve has cut interest rates in response to fears of an American recession, but many people (including Alan Greenspan, a former chairman of the Fed) are worried about a rise in inflation. It is important to distinguish between the short-term and the long-term. In the short-term, of course, weaker demand as a result of American housing problems and the credit crunch might result in reduced inflationary pressures. Measures of core inflation in America and Britain are now back below their targets.

It is dangerous for the markets to expect too much from the Fed LAST month's jobs figures were depressing but useful: they clarified what the Federal Reserve needs to do when it meets on September 18th. Not only did the American economy shed 4,000 jobs in August (rather than gaining some 100,000 as most forecasters had predicted), but revisions to earlier figures showed that the pace of employment growth has been slowing sharply for several months. The numbers suggest that America's economy was sputtering well before the credit crisis. America needs to create at least 100,000 jobs a month merely to absorb the growing working population. Now that the growth in employment seems to have stalled, the economy looks vulnerable. Add a credit crunch on top and the risks of a sharp slowdown, even a recession, are uncomfortably high. With inflation under control, the country's central bankers clearly ought to counter that risk by lowering their benchmark interest rate.

AP - American consumers hold the key to whether the unexpected drop in August employment signals either a continuation of a gentle slowdown or a tumble into outright recession for the U.S. economy. The question is whether, after years of spending, we're spooked enough now to lock up our credit cards.

American consumers hold the key to whether the unexpected drop in August employment signals either a continuation of a gentle slowdown or a tumble into outright recession for the U.S. economy. The question is whether, after years of spending, we're spooked enough now to lock up our credit cards.