Stronger-than-expected reports on orders for big-ticket manufactured goods, housing and retail sales have led some economists to declare that the worst of the 15-month, housing-led recession in the U.S. is over. But the economy has not hit bottom yet and mounting unemployment looks likely to keep demand sluggish for a while.

Sales of both previously-owned and new home sales rebounded in February. Still, analysts say the recovery was from historically low levels. Among factors weighing on the economy: falling home prices, weak consumer confidence, squeezed corporate profits and deteriorating labor markets.

Source: Reuters

Ford May Face Trouble If Obama’s GM Plan Works

Ford Motor, the only U.S. automaker not taking federal aid, could lose its competitive edge if President Obama successfully slims down General Motors. Analysts say GM could come up with a new strategy, win concessions from its union for cost cutting measures, slash debt, and reduce its dealerships and brands, which could give it a cost advantage over rival Ford.

Source: Bloomberg

Disney to Launch Channels on YouTube

Walt Disney and Google’s YouTube have agreed to offer sports highlights, clips of television shows and other short-form content on the popular video-sharing site. Under the deal, videos from sports network ESPN will be available on YouTube from April and the Disney/ABC Television networks such as ABC Entertainment and SoapNet from May. Disney hopes the arrangement will bring its advertisers to YouTube, which says Disney would keep the majority of the proceeds.

Source: Los Angeles Times

Cerberus to Give up Stake in Chrysler

Chrysler’s owner, Cerberus Capital Management, will give up its 80% equity stake in the carmaker. The Obama White House has determined that Chrysler’s only avenue of survival is through an alliance with another automaker and it has 30 days to cut a deal with Italian automaker Fiat. Under any rescue plan, an Administration official said, Cerberus will have to forfeit its Chrysler stock, though it will retain control of Chrysler Financial, the carmaker’s finance arm.

Source: BusinessWeek

High-tech Sector Better Handles Downturn

Despite year-end weakness, the U.S. high-tech sector added about 77,000 net jobs in 2008, with most of the growth occurring in software services, according to TechAmerica. The trade group that represents 1,500 companies says the industry has weathered the downturn better than most other parts of the American economy, although the country lost about 38,000 high-tech jobs in the final three months of 2008 and faces uncertain prospects this year amid a deep recession. In 2007, high-tech added 79,000 jobs.

Source: MarketWatch

Google Launches Investment Fund

Google launched Google Ventures on Monday, following other Silicon Valley firms with a division to invest in promising start-ups. Google Ventures managing partners Rich Miner and Bill Maris say in a blog post that Google will be focusing on early-stage investments across a diverse range of industries, including Internet, software, clean-tech, biotech and health care. A recession is a good time to get better terms out of start-ups and to take on traditional venture capitalists.

Source: CNET News

France Sets Limits for Executive Pay

In a bid to quell public anger over executive pay, the French government banned companies that get state funding from issuing stock options to top managers. The order limits other forms of compensation but doesn’t prohibit executive bonuses. President Nicolas Sarkozy has come under pressure from labor unions and opposition parties to raise taxes on the rich and cap executive pay.

Source: Wall Street Journal

China and Argentina in Currency Swap Deal

China, which is pushing to end the dominance of the dollar as a worldwide reserve, has agreed with Argentina to swap $10 billion worth of their currencies to allow South America’s second-largest economy to avoid using dollars in trade between the nations. Since December, China has struck similar deals with South Korea, Malaysia, Hong Kong, Belarus and Indonesia.

Source: Financial Times

Calif. Gets $4.7 Billion Settlement with Brokerages

Wachovia and Citigroup will return a total of $4.7 billion to California residents who bought auction rate securities from them. California regulators have alleged Wachovia and Citigroup misrepresented auction rate securities as safe, cash-equivalent products, even though the products faced increasing liquidity risk.

Source: Associated Press

In Your Face: GLIMMERS OF HOPE IN LATVIA

Reader Joanna Writes: “So Latvia ‘may simply have to grit its teeth’? Is that when people are so hungry because they haven’t got enough to eat?”

Tell Us: Is the Baltic Economic Crisis Being Overlooked?

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