A plunge in U.S. home sales and uncertainty over the Obama administration's housing policy plans are fueling fears about another looming recession. Sales of previously owned homes fell 27.2 percent in July, the lowest level in over a decade, followed by a sharp drop in new U.S. home sales, leading economists to predict a further decline in housing prices (WSJ), which stabilized last year. Such declines, coupled with high unemployment and slow hiring, could further depress consumer spending, key to short-term recovery (WashPost).

The recession that began in December 2007 ranks as the worst since World War II. It carved a huge slice out of Americans’ financial wealth and caused the biggest percentage decline in employment of the post-war era. Even though the stock market rebounded in 2009 and U.S. output began to grow in the second half of that year, the recession continues to take a terrible toll on the incomes and psychological health of many families. Read more

The rise in Canada's currency "makes sense" because investors are snapping up the country's assets and the economy is growing nicely, Finance Minister Jim Flaherty said yesterday. It's a different world from the heady days of 2007, when the Canadian dollar zoomed up to a high near US$1.10, Mr. Flaherty said. Then, speculators were at the heart of the rise, he said, while this time he credits the strong economy. "There's more demand for Canadian investments. So the upward pressure on the dollar to me makes sense," said Mr.

President Obama inherited the scariest and most dangerous economic situation in more than 50 years. The economy was in free fall in the spring of 2009, with GDP plunging and employment declining at the rate of 700,000 jobs a month. The financial sector was on the verge of collapse, both in the United States and around the world. The two big policies used to turn around the economic situation, the Troubled Assets Relief Program (TARP) and the stimulus package, were the right ones, and they have worked as well or better than could have been expected. Read more

New numbers from the Finance Department indicate the stronger economy is helping the federal government run smaller budget deficits than at the same time last year, as tax revenues increase. Through the first two months of the current fiscal year, April and May, Canada's deficit sits at $4.4-billion, compared with $7.5-billion in the same period of 2009 when the economy was still in recession.

Financial market participants would benefit from a better understanding of how the Bank of Canada sets the overnight interest rate in response to economic developments, proclaims the C.D. Howe Institute. The study suggests that more accurate forecasts of the Bank’s future policy choices would lead to better financial decisions and better price and wage-setting decisions. Read more

THOUGH he's only held his office for 10 months, United States ambassador David Jacobson can already name a lot of things he admires about Canada. For instance, there's our firmly regulated banks, which did not require a nearly trillion-dollar bailout in 2009. Then there's our housing market, which didn't collapse last year. Both of those features are now a model of success in a tumultuous global economy, Jacobson told the Free Press. http://www.winnipegfreepress.com/local/us-envoy-plays-up-canadas-role-in-economic-recovery-98905069.html

THE PRESIDENT:  Good afternoon, everybody.  With today’s vote in the Senate, the United States Congress has now passed a Wall Street reform bill that will bring greater economic security to families and businesses across the country. It was clear from the moment it began that this recession was not the result of your typical economic downturn.  It was the result of recklessness and irresponsibility in certain corners of Wall Street that infected the entire economy –- irresponsibility that cost millions of Americans their jobs, and millions more their hard-earned savings.  It’s