Is It Recession?

The Federal Reserve may be ready to cool its torrid rate-cutting after a likely .25% percentage point cut at its meeting next week, the Wall Street Journal reports. Futures markets are betting Chairman Ben Bernanke is unlikely to rest just yet, with little change in the month-to-month economic picture, but will pause after that to assess the cuts' effect and avoid stoking inflation. More »

The slumping US economy means Starbucks' quarterly profits won't meet estimates when figures are released April 30, the coffee giant said today. Analysts expected earnings of 21 cents per share for the quarter ended March 30; Starbucks expects 15 cents, the Wall Street Journal reports. It now predicts yearly sales to be lower than last year's 87 cents per share; Starbucks' January forecast had called for 96-98 cents. More »

In a sign of just how bad the credit crisis has become, Deutsche Bank has forbidden its employees from using expense accounts to pay for brothel visits and hotel porn, the Independent reports. It's unclear if execs have been seeking relief from subprime woes—the German giant has written down $4 billion—in fleshier pleasures, the paper adds. More »

President Bush yesterday opened a two-day economic summit in New Orleans with Mexico and Canada amid growing hostility to the North American Free Trade Agreement, which is widely blamed for US job losses. Bush is using the meeting with the trillion-dollar trading partners to highlight support for NAFTA as the 14-year-pact is repeatedly roasted on the Democratic campaign trail. More »

Venture capitalists’ investments declined 5% in the first quarter to $7.1 billion, compared with $7.5 billion this time last year, suggesting entrepreneurial concerns over startups in a troubled economy, the AP reports. The change marks the first year-to-year dip since late 2005. Still, the figure was the fifth-largest for a single quarter since 2001. More »

With the housing market in turmoil, President Bush is turning to an investment banker-turned-bureaucrat to head HUD, the Washington Post reports. Steven Preston, 47, has run the Small Business Administration since 2006 after a stint at Lehman Brothers; he succeeds Alphonso Jackson, who announced his resignation 2 weeks ago amid allegations of uethical misconduct. More »

Bellwether IBM posted a 26% spike in profits for the first quarter, proving that some tech companies are escaping the fallout from the economic downturn. The gains include a 6% increase in American revenue to $9.9 billion and are attributed to corporate customers buying products and services designed to improve productivity or cut costs, reports the Wall Street Journal. More »

Stocks staged a rally today on the strength of profit reports from JP Morgan and Intel. "The bear market is bottoming, and folks are beginning to look beyond the valley of widely known problems to better times ahead," a strategist tells the Wall Street Journal . The Dow ended up 256.80 to 12,619.27, the Nasdaq 64.07 to 2,350.11, and the S&P 30.28 to 1,364.71. More »

John McCain used a tax day appearance to propose a summer “gas tax holiday,” calling his plan to suspend the 18-cent levy “an immediate economic stimulus.” Among other economic initiatives the candidate outlined today were upping prescription drug premiums for wealthy retirees, declaring a moratorium on discretionary spending, and protecting college students' financial aid, the Pittsburgh Post-Gazette reports. More »

Crude oil hit a new record high in trading today—$113.66 a barrel—as weary investors attempted to hedge against a tumbling dollar and oil shipments were disrupted around the world. Though the dollar is the main concern, supply problems, including OPEC's decision not to change its 2008 outlook and the closure of a top Mexican export terminal, didn't help, the AFP reports. More »

An expanding health-care sector in China couldn’t help Royal Philips Electronics offset poor television and video sales in North America, as the world’s leading lighting company reported core profits fell 28% in the first quarter, Reuters reports today. The company said it expects the global economic slowdown will continue to hurt its consumer-electronics sales. More »

As many Americans batten down the hatches, the über-rich are still living it up, the New York Times reports. Already this year, 71 New York apartments have sold for more than $10 million—compared to just 17 in 2007. The good times were so good, many say, they haven’t had to cut back on impulse purchases like yachts, Bentleys and dream celebrations. More »

Group of Seven finance ministers ended 3 days of meetings in Washington yesterday by endorsing a plan to create greater transparency and oversight in financial markets to avert future crises, but no emergency measures to stem the current one. Despite a downbeat report on the likelihood of worldwide recession, and even hunger riots as the cost of food continues to soar, responses to the credit crisis remain national responsibilities, writes the Wall Street Journal . More »

The recession has begun to nip at the heels of New York's big law firms, reports the Wall Street Journal. S ome firms are beginning to lay off associates, rescind offers to those coming out of law school, and scale back summer associate programs. It's all due to a slowdown in work relating to mortgages, real estate transactions, mergers, and private equity deals. More »

Consumer confidence hasn’t been this low since 1982, according to the Reuters/University of Michigan index, which reported a slide to 63.2 from March’s 69.5. That was lower than even the lowest estimates in a Bloomberg analyst poll. “The consumer’s feeling increasingly hemmed in,” said one economist. “The economy is in a recession.” More »

Linens ‘n Things ls expected to file for Chapter 11 by Tuesday, the deadline for a $15-million quarterly debt payment, the Wall Street Journal reports. The move would make the home-furnishings giant the first major retailer sunk by the housing crisis, after bloated debt and plummeting demand handed the New Jersey company $242 million in losses last year. More »

The Senate approved a $15 billion measure to address the housing slump today, including $6 billion in total tax breaks to homebuilding firms and a $7,000 tax credit for buyers of foreclosed homes. Though it passed by an 84-12 margin, opposition from President Bush and the House could yet sink the measure, Reuters reports. More »

The International Monetary Fund says world economic growth will slow drastically in the next two years. In its new report, the IMF states that the world downturn will be led by the US, which will slip into a "mild recession" this year, the BBC notes. The report calls the current crisis "the largest financial shock since the Great Depression." More »

Venture capital in Silicon Valley is drying up as angel investors, wary of the fickle stock market and tightening credit markets, become more cautious with their cash, the New York Times reports. Their hesitance has slowed the pace of job growth and expansion at tech start-ups, and has dramatically cut the number of firms going public. More »

Slowing sales, rising inflation, and skyrocketing energy costs have small-business owners cutting back on hiring and tightening their spending as they brace for a continuing economic slowdown, USA Today reports. A National Federation of Independent Business survey puts small-business confidence last month at its lowest quarterly point since 1980. More »