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A Recession is a contraction phase of the

business cycle.

National Bureau of Economic Research(NBER) is the official agency in charge of

declaring that the economy is in a state ofrecession.

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They Define recession as :

Significant decline in economic activity

lasting more than a few months, which isnormally visible in real GDP, real income,employment, industrial production, and

wholesale-retail sales .

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The history of recessions in the United States since the GreatDepression show they are a natural, though painful, part of the

business cycle.

The unemployment rate of US grew to 8.5 percent in March2009, and there were 5.1 million job losses until March 2009

since the recession began in December 2007

The most recent recession to affect the United kingdom was the late-2000s recession.

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Dollar value

Declined

Stock market

crashed

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Because of layoff Unemployment

started to rise which resulted in furtherreduction in spending by consumer.

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Government and other private companies are reluctant in starting newventures and starting new projects.

Car, bike & truck sales down.

Steel plants also cutting production.

Hospitality and airlines are hit by poor demand.

Companies in the private sector and government sector are hesitant to takeup new projects. And they are working on existing projects only.

Projections indicate that up to one crore persons could lose their jobs.

The textile, garment and handicraft industry are worse affected. Together,they are going to lose four million jobs by April 2009, according to the FIEOsurvey.

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Banks are facing through a tough time of liquidity crunch. Lehman Brothershad invested a great amount in the stocks of Indian banks that have investedin derivatives.

A sudden fall in the economy directly affected Lehman and Merrill,eventually forcing them to file a bankruptcy.

Falling down of Lehman had a great impact on the leading internationalbank, ICICI Bank, a bank that had invested in Lehman s bonds. This meltdowneven have covered the Axis Bank but not to a great extent.

Lehman Brothers had signed a partnership with some of the real estatecompanies like Peninsula Land Ltd and DLF Assets. These have also suffereda heavy loss.

With all this, the Indian Sensex swung violently downward, mainly becauseof the foreign companies pulling out credits to meet high inflations.

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Indian companies have major outsourcing deals from theUS.Indias export to the US have also grown substantiallyover the years.Indian companies with big tickets deals in the US areseeing their profit margin shrinking.More people have sold the shares in the Indian sharemarket than they bought in the recent weeks. This hasadded to the fall of sensex to lower points.

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Most people have sold the shares.

Foreign investors have pulled out fromstock market.

Stock broking houses are laying-off people.

People have started saving money.

GDP growth rate fell to 2%

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Global Insight Economic Outlook Index showsreal GDP growth, at a six-month annualizedgrowth rate, remaining below 3% through thesummer and then gaining strength in Octoberand November with 3.3%-3.4% growth rates.

Temporary automotive supply disruptions

resulting from the Japan earthquake plus highenergy and food prices are the main reasons forthe slowdown.

A return to stronger growth is expected in thefall as automotive supply levels return to normal,businesses increase equipment spending, exportgrowth remains strong and employment slowlyimproves.

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A Few Humble Suggestions to Get Out of this Recession

Let's face the harsh truth. The United States of America is probably in arecession maybe even a depression.

To get out of this recession, we must first understand why the United

States is in a recession.

So in no particular order, here are some reasons why the United States'economy is faltering:

War: The United States is spending an estimated 2 billion dollars a dayon the Iraqi war.

Housing Credit: Most of the home loan banks are in financial troubleand are less willing to issue new mortgages and loans until their financial

situation improves drastically.

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