Asia Today: Japan Slips into Recession
Japan's economy contracted much more than expected in the January-March quarter, its second consecutive quarter of decline, putting it technically in a recession. Does the country have the political and economic will to fight its way out? WSJ's Mariko Sanchanta and Jake Schlesinger discuss

UK Economy Shrinks 0.5pc
THE DAILY TELEGRAPH: Britain's economy shrank unexpectedly in the final three months of last year as heavy snow compounded a slowdown in growth.

Gross domestic product fell 0.5pc in the fourth quarter, the most in more than a year, the Office for National Statistics reported on Tuesday. The decline compared with growth of 0.7pc in the third quarter.

George Osborne insisted that the Government will press ahead with planned cuts to public spending, despite warnings from forecasters that the economy may be too weak to withstand the package.

Blaming the growth figures on the cold weather, Mr Osborne maintained that a weakening in efforts to tackle the deficit would pose a greater bigger threat to the nation's future prosperity.

"There is no question of changing a fiscal plan that has established international credibility on the back of one very cold month. That would plunge Britain back into a financial crisis," the Chancellor said.

"We will not be blown off course by bad weather." Read on and comment >>> | Tuesday, January 25, 2011

USA: Fears Over Economy Highest Since Recession
MAIL ONLINE: The number of Americans worried about the economy has reached its highest level since the darkest days of the recession two years ago, according to a new survey published today.

The Rasmussen poll showed that 87% of voters view the economy as by far the most important issue facing the government.

The percentage is five points up from an October poll and underlines the task still faced by President Obama to restore confidence in the shell-shocked financial system.

Improving the economy is seen as the highest priority since August 2008, when the scale of the financial crisis was first becoming clear.

Only 24% of voters agree with Mr Obama’s claims that his policies have the economy moving in the right direction. However, halfway into the Obama presidency more voters still believe the Bush White House was more to blame for the financial collapse than the current administration. Welcome home, Mr President: Poll reveals fears over economy at highest level since recession as Obamas return from Hawaii
>>> David Gardner | Wednesday, January 05, 2011

Bankers Party Like Recession Never Happened
SKY NEWS: Over 1000 bankers have been quaffing champagne like the recession never happened at the largest City party since the economic crash of 2007.

Fed's Volte Face Sends the Dollar Tumbling
THE TELEGRAPH: Rarely before have a few coded words in the minutes of the US Federal Reserve caused such an upheaval in the global currency system, or such a sudden flight from the dollar.

The US workforce has shrunk by a 1m over the past two months as discouraged jobless give up the hunt. Photo: The Telegraph
The euro rocketed to a two-month high of $1.29 and sterling jumped two cents to almost $1.54 after the Fed confessed that the US economy may not recover for five or six years. Far from winding down emergency stimulus, the bank may need a fresh blast of bond purchases or quantitative easing.

Usually the dollar serves as a safe haven whenever the world takes fright, and there was plenty of sobering news from China and other quarters on Thursday. Not this time. The US itself has become the problem.

"The worm is turning," said David Bloom, currency chief at HSBC. "We're in a world of rotating sovereign crises. The market seems to become obsessed with one idea at a time, then violently swings towards another. People thought the euro would break-up. Now we're moving into a new phase because we're hearing alarm bells of a US double dip."

Mr Bloom said a deep change is under way in investor psychology as funds and central banks respond to the blizzard of shocking US data and again focus on the fragility of an economy where public debt is surging towards 100pc of GDP, not helped by the malaise enveloping the Obama White House. "The Europeans have aired their dirty debt in public and taken some measures to address it, whilst the US has not," he said.

The Fed minutes warned of "significant downside risks" and a possible slide into deflation, an admission that zero interest rates, $1.75 trillion of QE, and a fiscal deficit above 10pc of GDP have so far failed to lift the economy out of a structural slump.

"The Committee would need to consider whether further policy stimulus might become appropriate if the outlook were to worsen appreciably," it said. The economy might not regain its "longer-run path" until 2016.

"The Fed is throwing in the towel," said Gabriel Stein, of Lombard Street Research. "They are preparing to start QE again. This was predictable because the M3 broad money supply has been contracting for months."

The Fed minutes amount to a policy thunderbolt, evidence of how quickly the recovery has lost steam. Just weeks ago the Fed was mapping out withdrawal of stimulus. Continue reading and comment >>> Ambrose Evans-Pritchard, International Business Editor | Thursday, July 15, 2010