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U.S. President Barack Obama called a climate change agreement with China and about 25 other nations an “unprecedented” move to slow global warming. Environmental groups and at least five developing nations called it a failure.

The accord, which pushes off signing a treaty for at least a year, is “a first step,” Obama said yesterday before leaving Copenhagen, where he spent 14 hours cobbling together the agreement in meetings with world leaders, and addressing 8,000 envoys from 193 nations.

Delegates from the countries failed to reach consensus on the accord today after discussing it through the night, agreeing instead to “take note” of the document, or recognize that it exists. The agreement seeks voluntary cuts in greenhouse-gas emissions that scientists blame for global warming without binding countries to take action.

“The meeting was a disaster,” Lars-Erik Liljelund, the director general of Swedish Prime Minister Fredrik Reinfeldt’s office, said in an interview today. “The process needs to be changed because if we continue like this, we won’t be any further a year from now.”

Negotiators met in the Danish capital for two weeks of United Nations talks on curbing global warming. Debate stumbled on aid to developing countries facing damage from climate change, pollution-reduction goals and how to verify individual country’s pledges to cut harmful emissions.

Environmentalists said the agreement that includes the U.S. and China — the world’s two biggest emitters of greenhouse gases — falls well short of what’s needed to deal with global warming. Bolivia, Sudan and Venezuela were among countries that spoke out against the accord, which will serve as a framework for continuing talks in 2010.

‘Backroom Deal’

“This is the United Nations and the nations here are not united on this secret backroom declaration,” Kate Horner, policy analyst for the London-based environmental group Friends of the Earth, said in statement. “Copenhagen has been an abject failure.”

The proposal calls for voluntary steps to reduce emissions blamed for heating the atmosphere, melting icecaps and causing destructive weather patterns. For two years, nations from China to members of the 27-country European Union repeatedly called for a binding treaty to be signed in Copenhagen.

“It will not be legally binding, but what it will do is allow for each country to show to the world what they are doing,” Obama told reporters in Copenhagen. “There will be a sense on the part of each country that we’re in this together and we’ll know who is meeting and who’s not meeting the mutual obligations that have been set forth.”

Bleeding Hand

Obama, U.K. Prime Minister Gordon Brown and Brazilian President Luiz Inacio Lula da Silva were among about 25 world leaders who spent ten hours “in a rather stuffy room” drafting details normally left to lower-level negotiators, UN Framework Convention on Climate Change Executive Secretary Yvo de Boer told reporters today.

The text, called the Copenhagen Accord, was then introduced to the meeting hall where delegates from all nations were present. Envoys from Bolivia, Sudan and Venezuela rejected the text.

During the meeting, Venezuelan negotiator Claudia Salerno Caldera raised her hand that was bloodied and complained about the way the document was drafted, calling it a “Coup d’état on the UN charter.”

“This hand that is bleeding wants to talk and has as much right as any of those you call a “representative” group of leaders,” she said. “International agreements can’t be imposed by a small and select, as you call it, group of countries.”

Burning the Midnight Oil

Negotiations went through the night yesterday, finally ending today at about 3:30 p quick guaranteed personal loans.m. local time, more than 21 hours after their scheduled conclusion. That followed debate by Brown, Chinese Premier Wen Jiabao and U.S. Secretary of State Hillary Clinton until about 2:30 a.m. on Dec. 18.

Dessima Williams, Grenadian ambassador who was lead negotiator for a group of 43 small-island and low-lying states, today said she’d been awake for 48 hours.

“Although I’m not ecstatic, I’m not unhappy in a major way. I wish I could’ve gotten more, but I think I’ll live to fight another day.”

Rich countries offered to provide $100 billion a year by 2020 to help poor nations reduce carbon emissions, conditional on developing countries cutting gas discharges, according to the text. They may also pay out $30 billion in aid from next year through 2012.

“In terms of finance, it is vague, it is a big soup,” Pa Ousman Jarju, a Gambian delegate, said in an interview in Copenhagen. “It’s well below what is required.”

Move Forward

The agreement was reached after Obama had last-minute talks with Wen, Indian Prime Minister Manmohan Singh, Brazil’s Lula and South African President, Jacob Zuma. It was then taken to all nations and most backed it.

“There emerged over time a real sense in the room that most countries wanted to move forward with some kind of decision,” said Ruben Kraiem, co-chair of the climate practice for attorneys Covington & Burling LLP in New York.

Nations should try to keep the global temperature increase before industrialization “below 2 degrees” Celsius (3.6 degrees Fahrenheit), according to the agreement.

Envoys from the U.S., Europe and China have supported the 2 degrees target. Poorer nations and environmental groups wanted 1 or 1.5 degrees, fearing a higher increase will raise sea levels and make coastal cities and some island states uninhabitable.

‘Well Short’

“As President Obama said, its well short of what’s ultimately needed,” Elliot Diringer, vice president for international strategies at Arlington, Virginia-based Pew Center on Global Climate Change, said in a statement. “But it would provide a reasonable basis for negotiating a fair and effective climate treaty.”

Without emissions curbs, temperatures would rise by 6 degrees Celsius, an increase that “would lead almost certainly to massive climatic change,” the International Energy Agency, an adviser to 28 oil-consuming nations, said in a report. A more-than-2-degree warming will bring more intense flooding and drought and a faster sea-level increase, according to the UN.

“This declaration or outcome or whatever you want to call it, is not a legally binding document,” Indian Environment Minister Ramesh said in an interview. “It’s a political statement.”

For 20 years, scientists working for the United Nations have provided guidance for global climate talks. The result is the Kyoto Protocol, a 1997 accord that limits greenhouse-gas emissions among 37 industrialized nations. Those targets are set to expire in 2012, leaving the world without binding goals if Copenhagen doesn’t renew them.

“The objective of these negotiations of securing the future of the planet definitely wasn’t achieved,” Melinda Kimble, the U.S. chief negotiator for the Kyoto Protocol and senior vice president at the United Nations Foundation said in an interview in Copenhagen. “It’s a limited outcome.”

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Boxing Day deals in November?

As the economy continues to wobble, Canadian retailers are offering deeper discounts, keeping stores open longer, and using frequent and sometimes shorter sales to attract whatever holiday shoppers might be in the market this year.

Sears Canada said Thursday it is offering "Boxing Day" pricing on a wide range of items this weekend. For three days only.

Wal-Mart Canada said it’s dropping a "record number" of prices between now and Christmas to help Canadians stay on budget this holiday season.

The retailers cite specific discounts on everything from iPods to cooking sets and clothing.

While the idea of offering Boxing Day deals ahead of Christmas started a few years ago, this could be the first time the term has been used this early in the season, industry analysts said.

They say it’s an indication just how competitive holiday sales could become this year as unemployment remains stubbornly high and consumers worry about future job losses.

"For sure the consumer is very price sensitive and so those who offer the opening price points, the sense there will be good deals, are going to attract more traffic into the stores," said Wendy Evans, president of the retail consulting firm Evans and Company.

The idea is to grab consumers’ attention and an early share of the holiday market "by creating the perception of being very price oriented," Evans said.

Grocery stores, like Loblaw Cos. Ltd., which now sell clothing as well as food, are predicting price competition this holiday season will be fierce. That means department stores, like Sears, "are going to be dragged into the fray," Evans said.

Sears Canada’s chief executive officer Dene Rogers vowed earlier this week to use "aggressive marketing" strategies to boost sales, noting consumers are worried about future employment.

The retailer, which reported Wednesday that sales fell 7.6 per cent to $1.3 billion in the previous three months, wants "to convey to customers that we have the holiday season’s most wanted products at prices that can’t be beat," Rogers said.

Wal-Mart Canada, which said it expects to cut prices on 18,000 items this month, 20 per cent more than last year, said it’s trying to help Canadians make their dollars go further.

The price-cutting comes as a new survey suggests this will be the worst season for holiday shopping since 2005.

Just under six in 10 Canadians say they plan to spend the same amount as they did last year, about one-third plan to spend less and 8 per cent plan to spend more, according to TNS Canadian Facts.

"We often hear talk of so-called cautious optimism. But these results suggest now is a time for cautious negativism. Clearly, the floor hasn’t collapsed but it might be time to start looking for cracks," TNS vice-president and research director Michael Antecol said in a statement.

The Toronto-based research firm’s Consumer Confidence Index now stands at 95.5 points. That’s down 2.5 points since last month and down 3.7 points since August.

The numbers have slipped in all categories, TNS also said. Consumers are less confident about the present and the future and also say they’re less likely to make a big purchase at this time.

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Conservative leader David Cameron’s suggestion that the Bank of England end its asset purchases soon was criticized by two former central bank officials, a setback to the opposition’s effort to build credibility on the economy.

David Blanchflower, who left the bank’s Monetary Policy Committee in May, said Cameron’s speech yesterday was “bizarre” and if put into practice may tip the U.K. into a “depression.” Shamik Dhar, a former Bank of England economist, said “at best this is wrong and at worst downright dangerous.”

Without mentioning the central bank, Cameron told his party’s conference in Manchester that he opposed creating money, saying “sometime soon that will have to stop, because in the end, printing money leads to inflation.”

Prime Minister Gordon Brown’s government has authorized the Bank of England to purchase 175 billion pounds ($278 billion) in securities to help pull the economy out of its deepest slump since World War II. While the program will be wound down as the economy recovers, most economists say it has been necessary.

“I’ve been quite a critic of the Bank of England’s tactics in printing money, but the principle is a very good one,” said Steven Bell, chief economist at London-based hedge fund GLC Ltd. and a former U.K. Treasury official. “It has lowered bond yields and improved prospects for economic recovery.”

The yield on the 10-year U.K. government bond was 3.35 percent yesterday, compared with 3.64 percent on March 4, the day before the effort started.

Suggesting Reversal

Bell said Cameron’s remarks suggested that the Conservatives may reverse the policy if they win the election, due by June 2010, and that the comments were “unhelpful and surprising.”

After 12 years in opposition, the Conservatives are attempting to gain credibility as an alternative to Brown’s Labour government, which has trailed in polls since January 2008. At the party gathering, Cameron and his aides set out what they called a “painful” austerity plan to curb record debt, built up to revive growth.

Aides to Cameron and George Osborne, the Conservative lawmaker who speaks on finance, said the leader didn’t shift the party’s policy. The Conservatives have previously supported the central bank asset purchases.

They also proposed increasing the retirement age, freezing the wages of 4 million government workers and cutting spending by 7 billion pounds to shrink “big government.” There is “a steep climb ahead, but I tell you this: the view from the summit will be worth it,” Cameron said.

Blanchflower’s Concern

Blanchflower said it’s wrong to cut spending and shrink the size of the state before economic recovery is firmly rooted.

“Talk of repaying the debt, if you like, is fine in a boom, but not in the depths of the greatest recession we’ve seen in our lifetime,” Blanchflower said in a separate interview with Bloomberg Television yesterday. “It’s all about timing. Clearly you need to control the debt, but now? I don’t really think so.”

The British economy will contract 4.4 percent this year before expanding 0.9 percent in 2010, the International Monetary Fund predicts. The central bank forecast in August that inflation, which is now at the lowest level since 2005, will struggle to return to the 2 percent target in two years on line pay day loans.

Cameron’s remarks about the central bank are unlikely to register with voters, though attacks on his economic credibility might, said Andrew Hawkins from ComRes Ltd., a polling company.

‘Weakest Flank’

“I don’t think people have understood Cameron’s economics and it is his weakest flank,” Hawkins said.

Rick Nye, a pollster at Populus Ltd., said Cameron’s message about the economy is more likely to seep through.

“What Cameron wanted to do was reinforce the message that it’s time for a change and lay down a marker for the kind of government the Conservatives would be and the kind of prime minister he would be,” Nye said. “He did that pretty well.”

Brown’s Chancellor of the Exchequer Alistair Darling reiterated his critique of the Conservative economic plan, saying the economy remains fragile enough that his stimulus program is necessary.

“If we stopped supporting the economy now it would crash,” Darling said. “Every country in the world and just about every informed commentator is saying the same thing. The job is not finished. The Tories have been wrong at every turn.”

Blanchflower said Cameron’s program was “the most wildly dangerous thing I have seen in a hundred years of economic policy in Britain.”

‘No Understanding’

The economist from Dartmouth College in Hanover, New Hampshire, who was among the first to urge the central bank to stimulate the economy, said the Conservatives showed “no understanding of economics. It could drive the economy into depression.”

Dhar, now an economist at Fathom Financial Consulting in London, said that the central bank’s asset-purchase program, known as quantitative easing, should continue as long as institutions hoard cash and ration loans.

“Obviously, you have to stop QE at some stage, but this sounds like he’s ideologically opposed to it,” Dhar said. “It’s only ideologues that want to cut it off.”

Cameron didn’t mention the Bank of England’s program by name or make an explicit remark about what the Treasury’s policy toward asset purchases would be if he took office. Instead, he talked generally about the risks of the government running a deficit and “printing money” to bolster debt markets.

The central bank said yesterday it would spend to the limit of its program and evaluate whether to seek authority to make more purchases in November. While Governor Mervyn King has said the program will be wound down as the economy recovers policy makers will decide next month whether to extend it.

“Printing money will lead to inflation when you’ve got an economy running with no spare capacity, but that’s not the case now,” said Peter Dixon, an economist at Commerzbank AG in London. “We could print money without inflation for some time to come. Now is not the time to take back unconventional stimulus measures, that’s a long way down the road.”

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BAE Systems turned down the chance to pay 300 million pounds ($477 million) to settle a bribery investigation and is seeking to review evidence against it before trying to agree a deal, newspapers reported on Sunday.

The Serious Fraud Office said this week it was prepared to prosecute Europe’s biggest defense contractor over allegations the firm used bribery and corruption in arms deals in South Africa, Tanzania, Romania and the Czech Republic dating back to the 1990s.

The Sunday Times reported BAE had turned down the 300 million pound settlement after receiving advice the sum was too great for the evidence uncovered and the company could leave itself open to civil lawsuits from shareholders.

The Sunday Telegraph, which also cited the 300 million pound figure, said BAE wanted to restart talks with the SFO to get a clearer understanding of the evidence against it.

Legal experts estimated last week that BAE could face penalties of hundreds of millions of pounds if found guilty but that securing a conviction would be very difficult, and that both sides would probably seek to settle out of court cash advance.

A spokeswoman for BAE declined to comment on Sunday’s reports, and reiterated comments made on Thursday that the company was “seeking to resolve (the issues) at the earliest opportunity.”

The Independent on Sunday said the U.S. Department of Justice was looking to see if the deals under investigation by the SFO breached its own corruption rules and that there had been an informal exchange of information between the two agencies.

No-one at the SFO could immediately be reached for comment.

(Reporting by Victoria Bryan; editing by John Stonestreet)

($1=.6289 Pound)

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South Korea’s economy grew at a faster pace in the second quarter than initially estimated, Finance Minister Yoon Jeung Hyun said today.

The Bank of Korea will tomorrow report a larger expansion of gross domestic product than the July 24 estimate of 2.3 percent, Yoon said in a speech in Seoul, according to a Finance Ministry spokesman. Yonhap News cited Yoon as saying second- quarter growth was probably between 2.6 percent and 2.7 percent.

South Korea has joined China and Singapore in leading a regional rebound. Asia’s fourth-largest economy expanded at the fastest pace in almost six years in the second quarter, as shipments abroad and household spending rose, backed by interest rate cuts and fiscal stimulus, the central bank said in July.

“The brisk second-quarter result was widely expected,” said Kim Jae Eun, an economist at Hyundai Securities Co. in Seoul. “The upward trend should continue, although the pace of growth should be moderated from the fourth quarter.”

South Korea’s current account surplus in 2009 will probably exceed the previous forecast of $30 billion, Yoon said today, according to the Finance Ministry spokesman. The Bank of Korea said Aug. 28 the current account surplus was $26.15 billion in the first seven months of this year.

“Although the surplus is narrowing due to rising imports, that could be a sign that the economy may be entering a good cycle as demand is reviving,” said Kim of Hyundai Securities.

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The number of Americans collecting long-term unemployment aid fell to the lowest in three months in mid-July, according to government data that implied a slowing pace of layoffs as the economy stabilizes.

The Labor Department said that while initial claims for state unemployment insurance benefits rose by 25,000 to a seasonally adjusted 584,000 last week, the number of people still on benefit rolls after collecting an initial week of aid fell by 54,000 to 6.20 million in the week to July 18, the lowest since early April.

In addition, the four-week moving average for new claims, considered to be a better gauge of underlying trends, fell by 8,250 to 559,000, the lowest since late January.

The weekly moving average has declined for five straight weeks. New applications for unemployment benefits have in recent weeks been distorted by auto plant closures for retooling which normally happens in July.

Further, plant closures related to General Motors (GM, Fortune 500) and Chrysler bankruptcies have also caused volatility, making it difficult to gauge labor market trends.

Analysts said the general trend, however, was still toward a slowdown in the rate of layoffs, as illustrated by a consistent decline in the four-week moving average for new claims. This measure irons out weekly volatility.

Layoff pace slows

"It is becoming increasingly evident that the underlying pace of layoffs is slowing," said Stephen Stanley, an economist at RBS Securities in Greenwich, Connecticut. "The reality, outside of the auto sector at least, is that layoffs have probably been moderating steadily for several months instant cash advance."

The weekly jobs data, together with a string of stronger-than-expected quarterly corporate profits, lifted U.S. stocks, while government bond prices fell.

Recent data, including home sales and prices, have added to growing optimism that the recession is ending but high unemployment still weighs on consumer sentiment, which could result in the anticipated economic recovery being feeble.

Initial jobless claims are being monitored for signs of stability in the labor market and the number of laid off workers on jobless rolls fell for a third straight week.

The insured unemployment rate, which measures the percentage of the insured labor force who are jobless, was unchanged at 4.7% in the week ended July 18, remaining at that level for a third consecutive week.

Analysts said the sustained decline in continuing claims raised the chances of a less steep decline in July nonfarm payrolls data, due to be released next week.

"More to my liking is that continued claims are falling. There is the possibility that July’s payroll number could be better but that number could be suspect because of auto and seasonal adjustments in July," said Lee Olver, a fixed income strategist at SMH Capital in Houston, Texas.

A Reuters survey forecast U.S. nonfarm payrolls would be down 340,000 in July after shrinking 467,000 in June. The unemployment rate is forecast to rise to 9.7% from 9.5%. 

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Iceland’s central bank should focus on supporting the krona when deciding monetary policy, an International Monetary Fund spokesman said, signaling the fund wants policy makers to keep interest rates on hold today.

“The monetary policy advice of the fund is to use stabilization of the exchange rate as the principal instrument to stabilize inflation,” said Franek Rozwadowski, the Washington-based Fund’s representative on the island, in an interview in Reykjavik yesterday.

The central bank last month lowered the benchmark to 12 percent, the fourth reduction since the island came under IMF administration at the end of last year when the failure of its biggest banks precipitated the collapsed of the krona. Even with capital controls in place, the krona has slipped 4 percent against the euro since June 1, the worst performance of the 18 emerging market currencies tracked by Bloomberg.

The central bank announces its rate decision at 9 a.m. in Reykjavik today. Two of three economists surveyed by Bloomberg expect no change, while one expects a cut to 11 percent.

The currency “is what should drive monetary policy, including interest rate policy,” Rozwadowski said.

Sedlabanki interim Governor Svein Harald Oygard said on June 4 that it’s the central bank’s “privilege” to set benchmark interest rates, adding that policy makers’ decision to lower the key rate last month was mainly steered by the outlook for the domestic economy.

Lawmaker Doubts

Oygard will be succeeded on Aug. 20 by Mar Gudmundsson, a former chief economist at the central bank who currently works as deputy head of the monetary and economic department at the Bank for International Settlements in Basel.

The government of Prime Minister Johanna Sigurdardottir is struggling to get lawmaker approval for an accord struck with the U instant payday loan.K. and the Netherlands last month to cover internet deposits stemming from failed lender Landsbanki Islands hf.

Twenty-nine opposition lawmakers in the 63-seat Reykjavik- based parliament have said they will block the Icesave accord reached by the government. Four members of the junior ruling coalition partner have expressed doubts about the agreement.

Finance Minister Steingrimur Sigfusson said on June 29 he hopes the bill will pass in two weeks. The government has no “Plan B,” should the bill fail, Sigurdardottir has said.

Iceland is relying on a $2.1 billion IMF loan to avert default and received the first $827 million installment in November after the loan was approved, with a further eight equal disbursements yet to be paid. The Nordic states of Sweden, Norway, Finland and Denmark this week signed off on a further $2.5 billion in loans, and said that disbursement remains contingent on IMF reviews.

Nordic Loans

“The Icesave agreement is not part of the letter of intent for the review and the approval of this agreement in the parliament is not an explicit condition for the review,” Rozwadowski said. “However, the Nordic countries have signaled that a solution to Icesave is a condition for disbursing the loans that were signed, and these loans are needed as part of the financing of the program.”

A parliamentary rejection of the Icesave accord struck with the U.K. and the Netherlands “would create a good deal of uncertainty,” Rozwadowski said. “One question would be how the Nordics would react? Another question, for the broader membership of the Fund, would be: what does a no vote imply about Iceland’s commitment to meet its international obligations.”

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The deterioration of the Manhattan office availability rate slowed in the second quarter, signaling the worst may be over for the market, real estate services company FirstService Williams said in a report.

Although the Manhattan office market’s total availability rate — which includes vacant space plus space scheduled to become available within a year — rose to 13.4 percent in the second quarter from 12 percent in the first, the increase slowed significantly in the latter half of the quarter, according to the report released to Reuters on Sunday.

That could help major Manhattan landlords such as SL Green Realty Corp, Vornado Realty Trust, Boston Properties Inc and Brookfield Properties.

During the second quarter an additional 4.7 million square feet of office space was put on the market, surpassing the 3.9 million square feet that hit the market in the first quarter.

The 13.4 percent availability rate is still below the last cycle’s peak of 14.5 percent reached in the first half of 2003.

The firm, which monitors space changes on a weekly basis, said the rise in the availability rate in the first half of the second quarter was essentially a continuation of the first quarter as demand for space weakened rapidly.

That changed during the latter half of the second quarter as the net total of available space added to the market noticeably slowed affordable car insurance.

“The availability data for the second half of the second quarter of 2009 portray a substantially different picture about the pace and direction of activity than what was observed in both the first half of the quarter or in the first quarter of 2009,” Mark Jaccom, FirstService Williams chief executive, said in a statement.

Net additions to the supply of space in the latter half of the second quarter were about half the level seen a month earlier Jaccom said.

“As the quarter ended, we also found that firms that earlier were not even beginning the decision making process quickly shifted and ramped up their search activity,” he said.

Earlier this month, CB Richard Ellis Group Inc, said that asking rents had fallen 28 percent in Midtown Manhattan, a big enough drop to show a re-pricing of leasing terms and signaling the approach of a market bottom.

At the Reuters Global Real Estate Summit last week, commercial real estate experts said that adding in months of free rent and tenant improvements, rents had fallen about 50 percent.

(Reporting by Ilaina Jonas; Editing by Phil Berlowitz)

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The recession began in December 2007. Did it end sometime this spring?

It’s a provocative question that’s tough to answer. It’s tempting to say the recession is over when that seems to be what the stock market is telling us.

But Wall Street hardly has a perfect track record: There were numerous bear market rallies during the Great Depression, for example.

Stocks also enjoyed a nice run last spring after Bear Stearns almost imploded, even though the collapses of Fannie Mae (FNM, Fortune 500), Freddie Mac (FRE, Fortune 500), Lehman Brothers and AIG (AIG, Fortune 500) were still yet to come.

"With all due respect to Mr. Market, it is highly fallible as a forward looking barometer," said David Rosenberg, chief economist & strategist at Gluskin Sheff + Associates, a Toronto-based wealth management firm.

The bear case: ‘Less bad’ does not equal good

The jump in stocks also poses another chicken-versus-egg question: Is the market rallying because people think the recession is over or do people think the recession is over because the stock market is rallying?

If it’s the latter, that’s not necessarily great news. Rosenberg said he thinks it’s "beyond bizarre" to say the recession is over. The economy may have pulled out of the free fall that took place from September through February, he said, but that shouldn’t be confused with a bottom.

"We’re still in a recession. Are we past the worst point of it? 100% yes. But is the downturn over? It’s far too premature to make that assessment," he said.

Talkback: Is the recession over? If so, why do you think that’s the case? If not, when will it finally end? Leave your comments at the bottom of this story.

Jim Keegan, chief investment officer of Seix Investment Advisors, which manages the RidgeWorth Intermediate Bond fund, agreed that the recession may not be over yet. He said that even though the pace of decline may be slowing, it’s still a decline.

"The green shoots everybody’s talking about look more like dandelions. ‘Less bad’ is not good," he said.

The bull case: The decline is slowing

But Liz Ann Sonders, chief investment strategist with Charles Schwab & Co., believes that the recession ended sometime in the past two months and that the market is doing what is usually does, heading higher before it’s common knowledge that the economy is recovering.

Sonders noted that the Leading Indicators Index, a report that looks at consumer goods orders, stock prices, building permits and seven other key economic data points, rose sharply in May for the second consecutive month.

The report, released Thursday, showed a 1.2% increase last month, following a 1.1% rise in April. Sonders thinks this is significant because it’s the largest two-month consecutive jump since November and December 2001 — the first two months that followed the end of the 2001 recession.

Dan North, chief U.S. economist with Euler Hermes, a leading credit insurer, said he’s encouraged by signs of life in the housing market.

"You have record affordability with home prices and even though people are wringing their hands about mortgage rates rising lately, they are still historically cheap," he said.

North added that he thinks the decision by homebuilder Pulte Homes (PHM, Fortune 500) to buy rival Centex (CTX, Fortune 500) in April could be a sign of a bottom in housing since it could represent renewed confidence.

Kathy Lien, director of currency research at GFT, a foreign exchange and futures brokerage firm, also thinks that the recession has just about run its course.

She said that declines in the average number of jobless claims from their peak a few months ago is an encouraging sign, as are reports of improving home sales and stabilization in the manufacturing sector cash advance no faxing.

"There are signals indicating that the areas of the market that suffered the most in the recession are turning around, such as housing, manufacturing and the labor markets," she said. "All this, in combination, sends a strong message to us that the worst is behind us."

Housing and jobs key to recovery

Still, Rosenberg counters that the labor and housing markets remain weak and should stay so for the foreseeable future.

He notes that jobless claims may only be declining because of the surge in the number of people who have exhausted their unemployment benefits. Plus, the unemployment rate has continued to rise sharply in recent months.

And even though many economists point to unemployment as a so-called lagging indicator — i.e. it probably won’t peak until after the recession is over — Rosenberg disagrees. In many previous recessions, especially those led by downturns in business spending, it was true that the broad economy could recover before the job market.

But Rosenberg said this is a different kind of recession since it was caused by a credit bubble. So he believes that unemployment is no longer a lagging indicator, but one that is coincidental and perhaps even leading.

"There is a perfect link between unemployment and consumer delinquencies," he said.

He added that home sales may be improving, but prices continue to fall in many markets. He is also worried that rising unemployment could cause many borrowers who have so-called alt-A loans that are about to reset to default on their mortgages.

"We’ve got another leg down in housing and foreclosures. We need stabilization in home prices and the unemployment rate and we might be a year away from that," he said.

Who cares when it ends? When will we feel better?

Of course, the debate about whether the recession is or isn’t over should not overshadow the fact that the whole notion of a recession is largely a case of semantics.

Contrary to popular belief, a recession is not defined as two consecutive quarters of declines in the nation’s gross domestic product; a group known as the The National Bureau of Research makes the official call on recessions by looking at various economic trends beyond GDP.

And the NBER is notoriously slow in deciding when recessions begin and end. It didn’t declare until July 2003 that the 2001 recession ended in November of that year. The NBER also waited until last December to announce that the current recession started in December 2007.

Sot his might be a more important question to ask: When will the economic pain actually end?

Sonders conceded that even though she thinks the recession is over, she’s not a blind-eyed optimist. "I’m not telling clients to do anything differently. It doesn’t feel great now. I understand that."

Lien also said that no matter what happens on Wall Street, it’s not going to look good on Main Street for a while longer.

"There’s a big difference between the recession being over and increased growth. It’s probably going to be a slow, painful recovery," she said.

With that in mind, it may not really matter all that much when the NBER says the recession is over.

"The end of the recession won’t be like a hammer hitting you in the head," North said. "There are signs that the economy is turning the corner but it won’t feel good for months and months yet. If you don’t have a job, you don’t care if GDP is going up. You care that you don’t have a job."

Talkback:What do you think? Is the recession over? If so, why do you think that’s the case? If not, when will it finally end?  

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WASHINGTON — Thousands of first-time home buyers will be able to get short-term loans so they can quickly make use of a new $8,000 tax credit to pay for some of the costs of buying a home.

The Federal Housing Administration on Friday released details of a plan in which borrowers who use FHA loans can get advances from lenders that let them in effect receive the credit in advance, so they don’t have to wait to get the money from the Internal Revenue Service.

Most borrowers still will have to come up with the FHA’s required 3.5 percent down payment, unless they work through a state or local housing agency or an approved nonprofit. Ten states have such programs in place, according to the National Council of State Housing Agencies.

The tax credit was included in the economic stimulus package signed by President Barack Obama in February payday loan. It is not available to individuals with incomes above $95,000 or couples with incomes above $170,000 and expires Nov. 30.

Real estate agents and home builders generally welcomed the change.

Jerry Howard, chief executive of the National Association of Home Builders, called it a "great step in the right direction."

Still, some real estate agents were concerned that many buyers won’t benefit at all if they can’t use it for a down payment — a big hurdle for many first-time buyers.

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