News

Recession Briefing: 3.9

What you need to know today to survive and thrive in the recession.

The World Bank says the faltering U.S. economy is dragging the rest of the world into recession. It predicts that the global economy will contract this year for the first time since the 1940’s. (Washington Post)

Warren Buffett said that the U.S. economy has “fallen off a cliff,” and that he feared its eventual rebound would spark inflation. He said the economy was experiencing “close to the worst-case” scenario. (Reuters)

A rare foreclosure auction in New York City drew 1,400 potential bidders — as well as some protesters. One two-family Queens home was offered for a starting bid of $500, and eventually sold for $125,000. (New York Times)

With new worries about the global financial system mounting, the credit markets are freezing up again. Economists say that the markets are only open to the strongest companies. (Wall Street Journal)

“If the U.S. economy is a sick patient on the operating table, then economists are angry surgeons fighting for control of the scalpel and accusing one another of gross incompetence.” (BusinessWeek)

Appealing for its fourth bailout from the government, AIG told U.S. regulators that its collapse would cause a “catastrophic” chain of further failures that would be extraordinarily difficult to stop. (Bloomberg)

While unemployment numbers are routinely reported, many workers who still have jobs are taking home less money these days as a result of cuts in pay and hours, unpaid leaves, and reduced volume of commissions. (AP via Newsweek)

The fee for using Citibank’s ATMs is now of 300% the company’s share price. “To put it differently, Citi gets a capital injection from each ATM transaction that is three times as valuable as issuing new shares.” (Business Insider)

The financial stimulus bill has created a slew of new tax deductions and credits that could save you thousands of dollars if you pay attention. The tax breaks affect homeowners, college students, car buyers, environmentalists, retirees and workers.  (Los Angeles Times)

This could be the worst year ever to be a college graduate looking for work. “The sudden collapse of the financial sector has devalued MBAs that were still prized only six months ago, and Ivy League grads … are fighting over jeans-folding gigs at Forever 21.” (The Daily Beast)

“Fear can be a motivator, but it can also lead you into bad decisions, particularly in times like these,” writes Norm Brodsky. “You need to be careful about which costs you cut and which deals you offer your customers.” (Inc.)