Check out the latest from the respected Economists of the National Association of Home Builders. Click the link at the end of the paragraph for a detailed report.

Economic Momentum Still Is Downward in the U.S.
Real gross domestic product (GDP) contracted at a 6.2% annual rate in the final quarter of last year, the sharpest contraction since the depths of the 1982 recession. Available evidence on economic activity for the early part of 2009 shows that another major decline in GDP is in the cards for the first quarter of the year. We’re currently estimating -5.5%. (More)

Housing Production Still Is Weakening
The housing sector, which began to weaken more than two years prior to the onset of national recession at the end of 2007, still is a major negative for the U.S. economy. The housing production component of GDP (residential fixed investment) suffered a severe setback in the final quarter of 2008 and will post an even weaker performance in the first quarter of this year.(More)

The Economic Recession Now Is Truly Global
The recession increasingly is global in scope and nature, and a rare decline in world real GDP now is a virtual certainty for 2009.(More)

Inflation Concerns Are Giving Way to Deflation Fears
The global economic recession and growing slack in labor markets have totally defused earlier inflation concerns in financial markets and at our central bank, and the specter of potentially destructive deflation has crept onto the radar screen.(More)

The Financial System Still Is Functioning Poorly
The national and global financial market crisis has rightfully earned the title of “Great Recession” for the current economic situation.(More)

The Federal Reserve Pulls Out the Stops
The flagging economy, threat of deflation and persistent problems in the financial sector have spurred the Fed to pull out the policy stops.(More)

Treasury Supplies More Details on Public-Private Toxic Asset Plan
On March 23, Treasury Secretary Timothy Geithner supplied more details on a critical component of the Obama Administration’s plan for stabilizing the financial system, i.e., the public-private partnership designed to get toxic or “legacy” assets off the books of banks and other financial institutions.(More)

AIG Bonus Flap Threatens to Disrupt Public-Private Policy Initiatives
The recent public and political outcries over large “retention bonuses” paid to many executives of AIG, following massive injections of funds into this company by the federal government, threaten to divert the attention of policymakers from critical market needs at exactly the wrong time and to undermine the efforts to contain the financial crisis.(More)

Everything Considered, the Recovery Tunnel Is Coming Into View
There have been some glimmers of light in the darkening economic picture, including retail sales for January and February and sales of both new and existing homes in February. It’s clear that ongoing market adjustments in key sectors are essential to eventual economic recovery and expansion.(More)

Check out the latest from the respected Economists of the National Association of Home Builders. Click the link at the end of the paragraph for a detailed report.

U.S. Economic Growth Gets Revised Down for Late Last Year
As we expected, growth of real gross domestic product (GDP) for the final quarter of 2008 has been revised down substantially by the Commerce Department – from an annual rate of -3.8% in the “advance” report to -6.2% in the “preliminary” report. The revised number is the sharpest quarterly contraction since the depths of the 1982 recession. (Details)

Another Stock Market Debacle Deepens Economic Problems Early This Year
The stock market apparently had hit bottom early last November, and the market managed to stage a modest recovery over the balance of 2008. But then the equity market took another major leg downward, carving another $2 trillion from household net worth and decimating the attitudes of consumers, businesses and financial market participants alike. (Details)

Labor Market Deterioration Has Picked Up Steam
The current recession began at the end of 2007 when the job market started to lose ground, and the labor market has been deteriorating rapidly through February. According to the latest figures, nonfarm payroll employment has declined by 4.4 million since the recession began, and more than half of that decline, 2.6 million, has occurred during the last four months. (Details)

Home Sales Should Be Stabilizing Soon
Large cumulative declines in home prices in many areas, combined with attractive interest rates on prime conventional conforming fixed-rate mortgages (saleable to Fannie Mae or Freddie Mac) and an FHA/VA loans, have generated substantial improvements in housing affordability measures even as the deepening recession has taken a toll on median household income. (Details)

Everything Now Depends on the Strength of Economic Policy
The economy recently has gone from bad to worse, despite a variety of economic policy supports put in place late last year. The fate of the economy and the housing sector now depend very heavily on the strength of President Obama’s three-legged policy stool, along with complementary monetary policy support from the Federal Reserve. Policy actions by foreign governments also will be part of the policy puzzle. (Details)

BIG BUDGET – President Obama is asking for a $3.5 trillion budget for fiscal year 2010, creating the biggest U.S. deficit since World War II. A $1.75 trillion deficit for the 2009 fiscal year is projected in Obama’s first budget. That is equal to 12.3% of GDP…the largest share since 1945 when the country ran a shortfall of 21.5% of GDP. The complete budget blueprint is available at www.whitehouse.gov. Here’s a brief summary as provided by:

HEALTH CARE – President Obama’s budget proposal includes $634 billion for health care reform. The budget does not lay out a road map for achieving universal health care coverage, although it does contain a series of principles that the Administration says must be included in the final reform plan. According to the Congressional Budget Office, the number of uninsured Americans could rise by 10 million to 54 million in the next 10 years if lawmakers don’t take steps to control health care costs and expand coverage. President Obama calls the $634 billion a substantial “down payment” for funding a health reform plan and will create reserve fund to pay for what experts predict will be a $1 trillion cost for health care reform. The reserve fund will be funded by tax increases on high income earners and cuts in Medicare.

NEW INCOME TAXES – The budget also includes tax proposals that will benefit the middle income taxpayers and increase tax liability for those with adjusted gross income (AGI) of $200,000 (individual) and $250,000 (married couples filing jointly.) The top marginal tax rate would go from 35% to 39.6% in 2011. The budget proposal also extends the AMT “patch.”

ESTATE TAXES REMAIN THE SAME – The budget would make permanent the 2009 rules for estate taxes…$3.5 million per individual exemption, 45% rate, and preservation of step up in basis rules.

CAPITAL GAINS AND DIVIDENDS – The capital gains and dividends tax rate would go from 15% to 20% in 2011, but only for individuals earning $200,000 or more ($250,000 or more if married filing jointly).

HEDGE FUND MANAGERS HIT HARD – “Carried interest” would be taxed as ordinary income, rather than capital income. This means that income paid to hedge fund managers would be viewed as compensation rather than as a return on capital contribution. The result is tax based on income at the potential 39.6% rate, rather than the old capital gains rate of 15%.

PAY-AS-YOU-GO – The budget calls for enacting into law Congress’ pay-as-you-go rules. Pay-go rules require that any spending increase or tax cut be offset by corresponding spending cuts or tax increases.

REGULATORY REFORM – The budget also calls for complete reform of the regulatory system governing the financial services industry, including insurance, securities and banking. The budget also calls for a reserve fund of $250 billion to stabilize the financial services industry as well as a 13% increase in funding for the SEC.

HOW MUCH? – The proposed $3.55 trillion spending plan is equivalent to $11,833 for every person and $25,573 per taxpayer. Does that include “taxpayers that pay no taxes?,” you ask? Yes it does!