PThe latest figures show construction spending was down, but not out, in the month of November. Total spending declined 0.6% against market expectations for a decline of 1.4%. October's decline was also revised to just -0.4% from a previously reported drop of -1.2%.brbrThe residential market continues to be a lead anchor, with private residential spending down 4.2% -- the biggest decline since July's -6.2% reading. Private nonresidential spending, on the other hand, increased 0.7% after a 0.4% decline in October. Within the private nonresidential sector, spending on lodging was up 0.7%, spending on office property rose 0.9%, spending on transportation projects jumped 3.2% and spending on power facilities climbed 5.3%.brbrThe problem? This nonresidential strength simply isn't going to last. After all, as the A href=http://www.nytimes.com/2009/01/05/business/05real.html?hpNew York Times noted yesterday/A, vacancy rates are rising, rents are falling, and commercial real estate financing conditions are much tighter now than they've been in ...

The description of the consensus that growth will resume around mid-year -- while accurate -- does not convey much information about what is the consensus regarding the depth of the recession. Nor does it convey the degree of disagreement regarding the timing and strength of the recovery. To provide some isnight , here is the mean forecast for GDP into the new year, according to the WSJ's December survey.

Figure 1: Log real GDP, from 25 Nov 08 preliminary release (blue), potential GDP (black), WSJ mean forecast from December survey (red), high and low forecasts (teal), and third highest and third lowest forecasts (green). Source: BEA NIPA release [link], CBO estimates of 9 Sep 08 [xls], WSJ survey of forecasters from December [link].

The mean forecast indicates a recovery (i.e., resumption of positive growth) starting in 2009Q3. Despite the positive growth projected, the output

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IEB reader Durgesh Prasad, sent in this idea, via email to some of the IEB contributors.

In today’s slow economy, where government is trying its best to keep the real estate market rolling and attracting investors to invest in real estate market in order to keep market live, I had an idea through which it can be achieved by government without loosing anything. Presently, the deciding period of differentiating a CAPITAL GAIN as Short term or Long term is 3 years period. If one sells his new house in less than 3 years and incurs profit, the gain is termed as Short term capital gain. And if he sells his new house after 3 years and incurs profit, the gain is termed as Long term capital gain. Now there is no way to avoid tax in short term capital gain, whereas there is way to save tax in long term capital

...

From "Trade-Finance Pinch Hurts the Healthy," WSJ, 12/22/08:

The global financial crisis is drying up the financing that firms depend on for trade. That's making the global recession nastier and deeper than it otherwise would be.

As with all kinds of credit these days, financial institutions are making less trade finance available and charging more for it. But the squeeze in trade stands out because it pinches otherwise healthy companies that should be driving a recovery in global commerce. Already, the World Bank predicts trade will contract next year for the first time since 1982.

The Deteriorating Trade Outlook

Here's the IMF's recent forecasts for exports -- from October and then November -- for world trade, disaggregated into advanced and developing country groupings.

Figure 1: Real goods and services exports by country group. Source: IMF, World Economic Outlook Oct. 2008; Nov. 6 WEO update.

These developments in trade financing suggest that

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What does 2009 hold for India, given the global credit crisis and the aftermath of the 26/11 Mumbai terror attacks?

Joe Nocera, one of my favorite business journalists, thinks that India’s banking sector has managed to avoid getting dragged down by the financial maelstrom.

Do you agree?

And what is the outlook for the rest of the economy?

by Edward Hugh: Barcelonabr /br /Well, one good turn deserves another. So if, a href="http://krugman.blogs.nytimes.com/"like Paul Krugman/a (and me, I think, though I hadn't gotten as far as thinking through all the implications of what was happening when I posted the original piece) you take the view a href="http://fistfulofeuros.net/afoe/economics-and-demography/as-the-politicians-battle-it-out-ukraines-economy-tunnels-south-in-search-of-australia/"the Ukraine industrial output chart I put up yesterday/a could be the smoking gun (or starter's pistol, or line judge flag, or whichever metaphor works for you) that tells us that the second great global depression in the history of modern industrial capitalism may now have begun, then here are some more of those tell-tale charts to put in you pipe and smoke - or if , like Huck Finn that is your preference, to chew on.br /br /br /Of course it is entirely possible that Paul Krugman is only saying that a Great Depression has broken out in Ukraine, and obviously ...

PI can count on one hand the number of economists who were expecting the holiday shopping season to be a good one. But even the generally grim consensus forecasts apparently weren't grim enough, according to early sales results. Here are some more details from the A href=http://online.wsj.com/article/SB123025036865134309.htmlWall Street Journal/A ...brbrPrice-slashing failed to rescue a bleak holiday season for beleaguered retailers, as sales plunged across most categories on shrinking consumer spending, according to new data released Thursday.brbrDespite a flurry of last-minute shoppers lured by the deep discounts, total retail sales, excluding automobiles, fell over the year-earlier period by 5.5% in November and 8% in December through Christmas Eve, according to MasterCard Inc.'s SpendingPulse unit.brbrWhen gasoline sales are excluded, the fall in overall retail sales is more modest: a 2.5% drop in November and a 4% decline in December. A 40% drop in gasoline prices over the year-earlier period contributed to the ...

As we near the end of the year, and the end of eight years of Bush economic policy, I think it's useful to look back. The White House has recently tangled with the NYT regarding what got us into the current economic crisis [0] (see also [1]). This comes on the heels of the Paulson argument that he would not have done anything different, had he known the full extent of the looming crisis. This leads me to wonder how we should view the Bush Administration's stewardship of the economy.

Candidate Explanations

In particular, when one examines the mixture of policies and events that have led us to the brink of possibly the deepest and most persistent downturn since the Great Depression, one can see several suspects listed.

Fannie and Freddie Community Reinvestment Act CDO's and CDS's Global saving glut Monetary policy Deregulation Criminal activity and regulatory disarmament Tax cuts and fiscal profligacy Tax policy

Red Herrings

I've already dealt with

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strong/stronga href="http://1.bp.blogspot.com/_ngczZkrw340/SVFAWkhXc8I/AAAAAAAAL3k/ueQYKIgYSc0/s1600-h/hrvynia.png"img id="BLOGGER_PHOTO_ID_5283074594387227586" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 320px; CURSOR: hand; HEIGHT: 159px; TEXT-ALIGN: center" alt="" src="http://1.bp.blogspot.com/_ngczZkrw340/SVFAWkhXc8I/AAAAAAAAL3k/ueQYKIgYSc0/s320/hrvynia.png" border="0" //abr /br /blockquotep“In Ukraine, the evidence is still that policymakers do not quite understand the seriousness of the challenges they face,”. Timothy Ash, analyst at the Royal Bank of Scotland. /pp“There is a burgeoning economic crisis in the European periphery,” Krugman said on the ABC network Dec. 14. “The money has dried up. That’s the new center, the center of this crisis has moved from the U.S. housing market to the European periphery.” /p/blockquoteMake no mistake about it. What is taking place right now in Ukraine is extraordinarily serious. The IMF have recently agreed a support loan to the country, but the politicians themselves still can't agree on whether or not they are actually going to abide by the conditions attached to it. Meantime, as we can all see on ...

Today I outsource to a couple of links I found interesting:

Dave Cohen on oil prices.

Stephen Gordon on economists' fatal flaw.

James Morley on the need for a new Fed-Treasury accord.