Recession

Travel deals abound in this recession So have you always wanted to take that dream trip to an exotic island or some far-away country? If you're fortunate and have the extra cash, now is the time to do it. The recession has caused many travelers to stay home and businesses to cut back on trips as well. That means there's a glut of empty hotel rooms and plane seats. "I'm seeing incredible deals even on places that are normally hard to come by," said Tim Leffel, a travel consultant and author of the book Make Your Travel Dollars Worth a Fortune.

Confused? So are the best and brightest on Wall Street as they try to make sense of a housing recession and credit crunch that many experts failed to anticipate. The intense ups and downs in the stock market in recent weeks are a symptom of the confusion as the economic threats play out in a script analysts haven't read in the past. It doesn't help that even the Federal Reserve has had to amend its views. Fed Chairman Ben S. Bernanke, who previously estimated the subprime mortgage loss at $50 billion, recently pegged it at $150 billion.

Recessions are not inevitable adjustments built into the clockwork of a modern economy. Businesses no longer make products on long lead times and stumble into excess inventories of cars and appliances, triggering layoffs and pauses in consumer spending. Computer-aided supply-chain management and tracking of customer purchases allow businesses to better align what they make to what can be sold. However, recessions still happen, because of external shocks - natural disasters and political events - as well as errors of judgment and greed.

WASHINGTON -- The economy added a modest 94,000 jobs last month, the government said yesterday in a mixed employment report that only slightly eased fears of a recession. The national unemployment rate remained steady at 4.7 percent despite job losses in the construction, financial services and factory sectors. Private job creation was tepid at 60,000 as federal, state and local governments increased payrolls by 34,000. Many economists said the report was reassuring in light of strong bearish sentiment expressed by many in the financial markets.

So the mortgage crisis comes to this: Columbia's Fieldstone Mortgage enters bankruptcy proceedings, stiffing Wall Street's biggest names, and it's only a local story. Mr. Bernanke, here's another indicator you're losing control. If a major subprime lender leaves Morgan Stanley, Household International, Bear Stearns and others holding a $100 million bag and the national news media ignore it, maybe the problem is a heck of a lot bigger than most of us dreamed. Lower the short-term interest rates.

THE AMERICAN home-value appreciation machine keeps pumping out near-record inflation-adjusted gains. The latest data from the government agency that tracks the appreciation rates of millions of individual homes reveal that the average gain nationwide during the past year has been close to 5 percent -- or about four times the underlying rate of inflation in the economy overall.Houses in a handful of states have done even better. The typical California home jumped by 8.3 percent in value from the first quarter of 1998 through the first quarter of 1999.

COLOMBIA is quickly becoming a "front-burner" issue for U.S. foreign policy. The reasons -- escalating violence and rising drug production -- are not hard to discern. But what the United States expects to accomplish in dealing with the hemisphere's most troubled country remains a mystery.Washington's impulse to "do something" is understandable, even legitimate. But that impulse must flow from a hard-headed assessment of what goals are realistic and feasible, a clear understanding of how far the United States is prepared to go and a rigorous analysis of possible consequences.

IT HAS been seven years since inflation exceeded 3 percent and 18 years since it reached double-digit levels.Inflation has lost its capacity to scare Americans. Time has wiped from memory those dreadful years from roughly 1966 to 1990, when inflation wiped out the wage gains of an entire generation, traumatized the nation's politics and brought down foreign governments with alarming frequency.Wall Street, where memories can be notoriously short, hasn't taken inflation seriously for years.

Brendan Courtney, Baltimore-area director for Interim Financial Solutions, was home recovering from back surgery last week when a local banking client e-mailed him to say it was moving ahead with a major project planned for August, and wanted to know if the local temporary-help and employment-placement firm would help with any staffing needs.For the client, the cacophony of inflation fears, a slowdown in housing starts and worries the Federal Reserve might force interest rates skyward is like the din of a distant thunderstorm you believe won't strike your town.

WASHINGTON -- Doctoral dissertations will proliferate, arguing how much credit to assign to Robert Rubin, during whose tenure as treasury secretary the American genius for wealth-creation has set new records. Already there is the whine of axes being ground.Keepers of the flame of Reaganism say that today's cornucopia economy is the result of their man's tax-cutting and deregulating. To the extent that deregulation has spurred today's boom, Jimmy Carter gets credit for beginning the process with airline deregulation.

Gov. Martin O'Malley learned last week why to hate economists. In the same week that Federal Reserve Chairman Ben S. Bernanke declared the recession "very likely" over and less than a month after shrinking the state's general fund budget to three-year-old levels, he's now been told he must cut about $300 million right away - and instead of a $1 billion shortfall next year, it looks to be $2 billion. Forecasts, shmorecasts. Like a concrete block tossed in a pond, the ripple effect of high unemployment rates continues to spread long after the initial splash.

When a retired Dennis Gist got tired of "walking from room to room" in his Upper Marlboro home, he took a state social services job working with troubled youth. He didn't want to put on a suit and tie every day again; he just wanted to do some good in the world. Now his wife, also retired from another job, works across the hall, making financial arrangements for long-term care of poor elderly residents. The Gists are at the forefront of a recession - the ranks of the needy have swelled at social services departments as more residents seek food stamps, cash assistance or other help - and now the economic downturn has come to their household.

During the depression of the 1930s, the Chesapeake Bay thrived largely because people let it alone. They quit punishing the bay with overharvesting, and industrial pollution and construction diminished. The result was a maritime environmental bonanza. After the end of World War II, watermen were reporting record strikes of oysters, crabs and rockfish. A roundtable of "experts," including this writer, mulled this scenario at a "Chesapeake Futures" conference held by the Chesapeake Bay Maritime Museum in St. Michaels.

Recession pushes debit card spending past credit NEW YORK - Debit card use was growing rapidly before the economy tanked, but the recession appears to have made them the preferred form of plastic. Both in terms of the number of transactions and the total dollar amount spent, debit cards have overtaken credit cards for U.S. consumers. In dollar terms, debit cards are now used for 50.4 percent of all noncash sales, though they have a lower average dollar amount per transaction, according to research from TowerGroup, a subsidiary of MasterCard Worldwide.

The recession is over, says Newsweek. We're at "the beginning of the end of the recession," says the president. Maybe. It depends on the definition of "recession" and "is" and "over." Economists - the same folks who tell us pay is up and inflation is tame - can probably make a case. But evidence putting the lie to this little reverie is set to arrive from the Labor Department at 8:30 a.m. today. The monthly jobs report may show that unemployment topped 10 percent last month for the first time since 1983.

What a difference five years -- and a recession -- make. When financial planners were asked in 2004 for the most frequent questions from clients, the queries were largely about investing in real estate, how big of a mortgage they could swing and whether to buy or lease a car. The real estate market has since imploded, and many homeowners and would-be real estate moguls are underwater on mortgages. And the government is now giving money away to get consumers to buy or lease new cars to rescue the auto industry.

It was a time warp, for sure, but I couldn't decide if I was hurtling back to the past or off into the future. I was wandering through the Louis Vuitton store that opened last week at Towson Town Center, a jewel box of a shop in the mall's "luxury wing" that was quiet as a museum on this particular weekday morning. Museum, indeed. During what seems like the permafrost of this recession, I wonder if someday we'll go to museums to see the kinds of luxuries we used to buy, or at least imagined buying.

WASHINGTON - -Even as the nation's economy begins clawing its way out of the worst recession in 60 years, there are growing signs that this recovery could come with an unsettling twist: The wheels of commerce may begin to turn again without any substantial boost in jobs. Not only is the unemployment rate - now 9.4 percent - likely to climb into double digits, it is expected to remain there well into next year or possibly longer, economists say, prolonging the misery of the unemployed, squeezing retailers and other businesses, and adding millions of dollars in government costs and lost productivity.

The recession that has weakened nonprofits around the country has actually been a help to Vehicles for Change. Based in Halethorpe, Vehicles for Change takes unwanted vehicles, repairs them and sells them cheap to low-income families around Maryland, the District of Columbia and Virginia. "We actually have more cars in our inventory than we've ever had because we're getting so many donated," says Marty Schwartz, president and chief executive officer of Vehicles for Change. Since the recession began, he says, many of their donations have come from families who are looking to cut costs by turning in a third car. "In this economy, people are going, 'You know that car is costing us at least $300 a year in insurance, probably putting another $300, $400 in repairs,' and so they're getting rid of it," he says.

WASHINGTON - -The nation's breathtaking pace of job loss slowed significantly in May, bolstering hopes that the worst of the current recession is over, but millions of Americans and their families face continued economic pain with the unemployment rate jumping to 9.4 percent. And wages remained essentially flat, the government reported. The contrasting trends underscore a painful economic reality: Even as the recession winds down, hundreds of thousands of workers may continue to lose their jobs - and the unemployed might be among the last to reap the benefits of recovery.