Ever since it became clear that a tanking housing market was the poster child of the recession, anxious homeowners have waited for any good news to surface.

A slight glimmer came in the form of an announcement March 17 that construction of new homes and apartments jumped 22.2 percent in February compared with January, a larger-than-expected bump.

But even that good news was tempered by the fact construction activity is still down 47.3 percent from last year, according to a March 17 story by The Associated Press.

Fundamental weaknesses in the job and credit markets and still-rising inventory are still a major drag on any hope of a real rebound.

All of this was central to the Federal Reserve’s two-day meeting where they left a key bank lending rate at a record low to try to jumpstart the economy.

According to the AP, all areas of the country reported an increase in housing starts in February, except the hard-hit West. Applications for building permits rose, also, gaining 3 percent with permits for single-family homes up 11 percent.

Now economists are watching for signs historically low interest rates may finally be triggering inflation.

Core inflation, which excludes energy and food, edged up 0.2 percent in February, only slightly higher than the 0.1 percent gain economists had expected, the AP said. Core prices had risen 0.4 percent in January, the AP said.

“Only last summer, Fed officials had started to worry that a surge in energy costs could spread to other areas of the economy and boost inflation to unacceptable levels,” the AP said. “But after the financial crisis struck in the fall, the Fed switched signals and is now aggressively fighting a deepening recession with no real threat of inflation.”

Ironically, economy-wide job loss has tempered inflation fears as widespread layoffs depress wage demands, the AP said. Many economists say the Fed will not even contemplate interest rate increases until the unemployment rate, which soared to a 25-year high of 8.1 percent in February, declines, the AP said.
—————————————————————————————————————————————————————————————– This article was submitted by Kathleen O’Connor, a contributing writer for Biz2Credit. Biz2Credit is a small business marketplace that provides entrepreneurs with the latest industry news and financial advice. Send all questions to info@biz2credit.com.

A new requirement by the Obama administration will hopefully spur the 21 largest banks receiving U.S. government money to lend more to small businesses.

The new rules, outlined in a March 16 Associated Press story, have those banks reporting monthly on how much they lend to small businesses. All others are being called upon to make an “extra effort” to boost small business lending.

The announcements came March 16 as part of a broad package aimed at small business that was being unveiled by President Barack Obama and Treasury Secretary Timothy Geithner, the AP said. The package also includes reduced small business lending fees and an increase on the guarantee to some Small Business Administration loans.

“We know that small businesses are the engine of growth in the economy, and we absolutely want to do things to help them,” Christina Romer, who heads the White House Council of Economic Advisers, told the wire service. “There are already a lot of things to help them in the recovery package, and some of what will be coming out are the things that were in the recovery package: increasing the SBA loan guarantees, lowering fees.”

Republicans appeared to embrace the efforts, but with some qualifications.

U.S. Rep. Eric Cantor of Georgia said: “We’ve got to do something to help these small-business people. We know that they’re the job creators in this economy. And the problem … I think we’re seeing out of the Obama administration is a lack of focus on how to get things going again.”

The new measures have the government stepping in to buy loans, temporarily eliminate upfront fees of up to 3.75 percent and some processing charges on certain SBA loans typically passed along to borrowers, the AP said. It also increases the government guarantees on certain loans to 90 percent, up from 85 percent for loans below $150,000 and 75 percent for larger loans.
—————————————————————————————————————————————————————————————– This article was submitted by Kathleen O’Connor, a contributing writer for Biz2Credit. Biz2Credit is a small business marketplace that provides entrepreneurs with the latest industry news and financial advice. Send all questions to info@biz2credit.com.

Just when it seems like the bad news couldn’t get much worse, tales of economic success amid financial chaos are thankfully bubbling up.

And it’s in the form of successful entrepreneurship, everything from shoestring-budget start-ups to major viral marketing coups by tiny companies.

Recession be damned, some entrepreneurs are not only doing well, they are doing exceptionally well, wrote Jill Priluck of MSNBC’s “The Big Money” on March 17.

“With less overhead, a slim-to-none bureaucracy, and a philosophy that goes against even the most innovative Fortune 500 game plan, little guys in industries such as finance, marketing, entertainment, and media are busy, some more than ever, and a few are moving into territory where the big fish can’t swim. Whether making deals, planning ad campaigns, or signing talent, all small fish have the same slogan: lighter, cheaper, faster,” she wrote. “Welcome to the Little-Guy Economy, where boutique investment banks make deals while big finance is frozen, where Web geeks field calls from big media and corporate clients who need viral video and other digital-branding tools, where small law firms prosper and laid-off lawyers open their own shops, where independent music labels innovate faster, and where the word “team” can have a whole new meaning.”

Finance is perhaps the most interesting example, where small firms are playing a strong hand, particularly in the credit markets, where huge loans are history.

“While firms like Goldman Sachs and JPMorgan Chase depend on freely flowing credit markets, boutique firms, which do smaller deals, rely more on private equity sponsors—and don’t have the same bank, credit, or securitization obligations,” Priluck wrote.

If small is in, then it doesn’t take long for some bigger fish to swim over and take a look.

New York City Mayor Michael Bloomberg — as big a billionaire as there is — is now looking to spearhead small business and entrepreneurship in the financial services sector, Priluck wrote.

Video producers Lindsey Johnson and Leo Borovskiy of Lush Life Productions know how it is to make it big when your administrative assistant is your voice mailbox.

They turned a viral marketing jackpot and YouTube sensation “The Chad” into a thriving business that today includes clients like Hearst Digital, Priluck wrote.

“We’ve gone from only working for advertising agencies and marketing companies to having corporations directly approach us with their brands and ask, ‘What can you do and how much can you do it for?” Johnson told Priluck.
—————————————————————————————————————————————————————————————– This article was submitted by Kathleen O’Connor, a contributing writer for Biz2Credit. Biz2Credit is a small business marketplace that provides entrepreneurs with the latest industry news and financial advice. Send all questions to info@biz2credit.com.

The federal government is pouring cash into huge financial firms with very little oversight while even the slightest hand out to small business owners brings “we-need-scrutiny naysayers” out of the woodwork, says journalist JJ Ramberg of “Your Business.”

Ramberg, who anchors the MSNBC weekly show on small business, continued in her March 18 blog post:
“Maybe I’m missing something here, but small businesses are the lifeblood of the economy, and they are struggling right now largely through no fault of their own. They can’t get loans because the big boys messed up the system; and the faltering economy — caused in large part by the big financial firms — is also taking a big bite out of their sales,” Ramberg wrote. “All they want is a little bit of a break. So many entrepreneurs I’ve profiled in this blog — and many of the ones who post comments here — are struggling to keep their doors open.”

The impetus for her outrage came from a recent proposal by President Barack Obama to boost declining lending on Small Business Administration-backed loans. The idea was to do such economy-stirring efforts as directly purchasing up to $15 billion of securities backed by loans from the SBA, eliminating fees and increasing loan guarantees.

But it soon ran into criticism, she said, citing a Wall Street Journal story that worried the Obama administration could be creating incentives for another run on unwise credit and create a huge pool of unregulated money.

“I’m all for putting a lid on the bailout free-for-all with tougher standards and regulations,” she wrote, “but isn’t it odd that when small businesses want a helping hand suddenly the scrutiny reaches a fever pitch?”
—————————————————————————————————————————————————————————————– This article was submitted by Kathleen O’Connor, a contributing writer for Biz2Credit. Biz2Credit is a small business marketplace that provides entrepreneurs with the latest industry news and financial advice. Send all questions to info@biz2credit.com.

India’s Bollywood has long been a prolific producer of films large and small, but until a certain movie about a certain boy from the slums of Mumbai won an Oscar, there was little interest across continents.

India didn’t pay much attention to the American Academy of Motion Picture Arts and Science, which bestows the Oscar, and likewise, Americans would have a hard time finding Bollywood favorites at the local Blockbuster.

That’s changing, said a Feb. 23 BusinessWeek story.

The success of Slumdog Millionaire is cementing ties between the two country’s movie-making movers and shakers.

On Feb. 22, Slumdog Millionaire captured eight Oscars, including Best Picture and Best Director. Indian Allah Rakha Rahman won for Best Music Score as did fellow countrymen Gulzar and Resul Pookutty for Best Original Song and Best Sound Mixing respectively.

Unlike most foreign films made in India, BusinessWeek said, “Slumdog is like a typical Bollywood film, complete with the local industry’s favorite seasonings of survival, love, and triumph.”

Indian director Anurag Kashyap, who made a film called Black Friday based on the 1993 Mumbai bomb blasts, told BusinessWeek: “Slumdog’s Oscar tally is an absolute victory for India, as it has opened up so many gates for us.”

One possible recipient of the newfound interest could be the Film & Television Institute of India, the story said, hinting at a new trend for outsourcing. Pookutty, the Slumdog sound mixer, is an alumnus.
—————————————————————————————————————————————————————————————– This article was submitted by Kathleen O’Connor, a contributing writer for Biz2Credit. Biz2Credit is a small business marketplace that provides entrepreneurs with the latest industry news and financial advice. Send all questions to info@biz2credit.com.

The first week of March provided little to be happy about for investors with terrible job news and a still-volatile Wall Street hitting a low not seen since 1997.

“Stocks rose, fell, then clawed their way back to a mixed close after the Labor Department released its February jobs report,” MSNBC.com said in a March 6 story. “But while the market finished well above its lows — the Dow Jones industrials had a modest gain after falling more than 120 points — many market watchers say there’s no reason stocks can’t slide further, even as the major indexes are near 12-year lows.”

Contributing to that downward pressure is that big institutional investors are still sitting on the sidelines, MSNBC.com said, leaving the market to the far more volatile actions of short sellers, who buy stock on borrowed cash and bet for the price to go down.

“The shorts are having a complete field day in this environment,” Kent Engelke, managing director at Capital Securities Management in Glen Allen, Va., told the Web site. “Right now you have everybody so fearful, and these shorts are controlling the market.”

The worst news of the week came with February jobs numbers — worse than analysts expected, but not as bad as some investors had feared, MSNBC.com said.

“Employers cut 651,000 jobs last month, and the unemployment rate jumped to 8.1 percent, MSNBC.com said. The government also revised its December and January job loss figures up to 681,000 and 655,000, respectively.”

The Dow was down 6.2 percent for the week, marking its lowest point since the spring of 1997.

There have been gains in the market, but the overall slide has been too far and too fast for a small rally to make a difference.

“When you get this precipitous of a fall, you are always due for some sort of rally, but a rally will be unsustainable,” Jeff Buetow, senior portfolio manager at Portfolio Management Consultants told MSNBC.com.
—————————————————————————————————————————————————————————————– This article was submitted by Kathleen O’Connor, a contributing writer for Biz2Credit. Biz2Credit is a small business marketplace that provides entrepreneurs with the latest industry news and financial advice. Send all questions to info@biz2credit.com.

The massive $789 billion stimulus package just passed by Congress contains plenty of cash to shore up ailing banks, but little in the way of direct spending for small businesses, a Feb. 11 report by The Associated Press said.

“The plan does extend two provisions of 2008’s economic stimulus bill that allow small businesses to take a bigger upfront deduction for the cost of new equipment,” the AP said. “But companies whose sales are hurting may be reluctant to make big expenditures, putting those tax breaks out of reach.”

Raymond Keating, chief economist with the Small Business & Entrepreneurship Council, told the AP small business owners needed something better. “We need incentives in the private sector for people to take risks and expand business. Unfortunately, there’s very little of that in this package,” he said.

The savior for small businesses, economists say, will come when consumers start dusting off their wallets.
“The best thing to happen to small business is if customers come in,” William Dunkelberg, chief economist with the National Federation of Independent Business, a Washington-based small business advocacy group, told the AP.

The big problem with the economy now is “the guy whose job is not at risk has been scared into not spending,” he said, adding the recession’s grip will ease when they start buying again.

In the meantime, small business advocates say extending the Section 179 and bonus depreciation provisions into 2010 because makes more sense because it is unlikely small businesses will be investing much in the near term.
—————————————————————————————————————————————————————————————– This article was submitted by Kathleen O’Connor, a contributing writer for Biz2Credit. Biz2Credit is a small business marketplace that provides entrepreneurs with the latest industry news and financial advice. Send all questions to info@biz2credit.com.

Congress has reached an accord on a $789 billion package of tax cuts and new spending to help get the U.S. economy back on track.

President Barack Obama hailed the deal, saying it will help save or create millions of jobs and “get our economy back on track,” said a Feb. 12 article in Businessworld .

But that optimism came as the economic bad news kept pouring in, including a sharp fall in Chinese imports.

Some 35 percent of the compromise bill provides for tax breaks and the rest in government spending.
Senate Democrats put the jobs figure at 3.5 million, the report said. The package passed on Feb. 11 and was signed by Obama in Denver on Feb. 17.

“…Obama had been pushing Congress to act fast to help reverse the recession he inherited on taking office three weeks ago,” the report said. “U.S. stock markets, hammered the day before by uncertainty over the new administration’s financial recovery effort, reversed losses after (the) news.”

The Dow Jones industrial average gained 0.64 percent on the news, with other stock indices posting similar gains, later lost.

At the same time, on Capitol Hill, lawmakers grilled bankers on how wisely they have spent taxpayer money already received.

For one, Vikram Pandit, CEO of Citigroup Inc., said he told his board he would take a salary of $1 per year until a return to profitability.

The same scenario unfolded in London, the story said. There, a parliamentary investigation is looking into the integrity of the British banking system, which was partly nationalized in the crisis.

The report also said the Commerce Department noted a worldwide drop in demand for goods, driving U.S. imports and exports down for a fifth straight month in December.

“The clear message is that global trade activity has collapsed, as the world economy sinks deeper into recession,” Nigel Gault, chief US economist at IHS Global Insight in Lexington, Mass. told Reuters.
—————————————————————————————————————————————————————————————– This article was submitted by Kathleen O’Connor, a contributing writer for Biz2Credit. Biz2Credit is a small business marketplace that provides entrepreneurs with the latest industry news and financial advice. Send all questions to info@biz2credit.com.

The head of the U.S. Treasury is making good on a promise to take billions worth of toxic assets off the books of U.S. banks.

In a Feb. 10 Reuters story carried by Businessworld , Treasury Secretary Timothy Geithner was set to lay out a rescue plan based on a mix of public and private funds to wipe clean $500 billion of such troubled assets.

While details were light, Reuters reported that sources said the plan would also extend a Federal Reserve program allowing the U.S. central bank to extend up to $1 trillion in loans.

But what was clear in the days following the announcement was that the U.S. had learned from the shocking failure of investment bank Lehman Brothers, which went under in September, marking the largest bankruptcy in U.S. history, and would not let other banks fail.

The plan also included a huge boost in the government’s stakes in one key bank, Citibank, bringing it up to a possible 36 percent, reports said.

Geither’s plan follows a Feb. 9 press conference where President Barack Obama told reporters that cleaning up banks’ balance sheets was a priority and didn’t rule out the possibility that it will take more money than the $700 billion Congress already has approved to complete the job, Reuters said.

“We don’t know yet whether we’re going to need additional money or how much additional money we’ll need until we see how successful we are at restoring a level of confidence in the marketplace,” Obama said.

Obama then called on Congress to speedily approve both Geithner’s plan and an economic stimulus package to complement the revamped bank-rescue proposals, Reuters said.

“If you delay acting on an economy of this severity, then you potentially create a negative spiral that becomes much more difficult for us to get out of,” Obama said. “This is not your ordinary, run-of-the-mill recession, we are going through the worst economic crisis since the Great Depression.”

Geithner, the former president of the New York Federal Reserve Bank, said banks will be closely monitored and tested.

“The spectacle of huge amounts of taxpayer money being provided to the same institutions that helped cause the crisis, with limited transparency and oversight, added to public distrust,” Geithner said in remarks prepared for delivery after the release of the new measures, Reuters said.
—————————————————————————————————————————————————————————————– This article was submitted by Kathleen O’Connor, a contributing writer for Biz2Credit. Biz2Credit is a small business marketplace that provides entrepreneurs with the latest industry news and financial advice. Send all questions to info@biz2credit.com.