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Call it the big fizzle. The hoped-for second-half economic rebound is looking to be lethargic, with the country straining under high energy prices and fallout from the housing and credit debacles.

Forty-five percent of economists believe the economy won’t log any growth or will clock in at a feeble 1% pace in the final six months of this year, according to a survey being released Monday by the National Association for Business Economics, which is known by the acronym, NABE. And, 10% think economic activity could actually contract during the period.

"Forecasters are approaching the second half with a lot of caution," Ken Simonson, point person on the survey and chief economist for the Associated General Contractors of America, said in an interview. "Most forecasters are suggesting the outlook will be sluggish, but not desperate. I’m afraid we’re stuck on the ground floor of growth."

Thirty-two percent, meanwhile, think the economy growth’s during the second half could be between 1% and 2%, which would mark a plodding performance. The more bullish are clearly in the minority camp: 11% think growth will come in between 2% and 3%. Only 1% expect growth to surpass 3%.

The economy’s growth slowed sharply in the final quarter of 2007 and remained stuck in a rut in the first quarter of this year. Tax rebates, which have energized shoppers, should help lift the country out of the doldrums somewhat in the second quarter. The government releases its estimate of the second-quarter’s economic performance at the end of this month. However, as the bracing force of the rebates fade, some analysts fear the economy could hit another rough patch near the end of this year.

Earlier this year, many thought that the first half of this year would be difficult and the second half would be stronger, lifted by the government’s $168 billion stimulus, including tax rebates for people and tax breaks for businesses. With the rebates kicking in earlier than some expected, the second half could turn sluggish.

Many have "abandoned the notion of seeing a rebound," Simonson said.

Federal Reserve Chairman Ben Bernanke, who briefed Congress on Tuesday and Wednesday, warned that over the rest of this year, the economy will grow "appreciably below its trend rate" mostly because of continued weakness in housing markets, high energy prices and tight credit conditions.

Normal activity would be along the lines of a 2.5% to 3% growth rate for the economy.

Not only is the country slogging through lethargic growth, but it is also confronted by rising prices that threaten to spread inflation.

In the NABE survey, 75% reported paying more for raw materials, such as fuel and steel no fax payday loans. That’s the highest percentage in record keeping going back to 1994. Those higher prices are squeezing profit margins and leading some firms - 35% - to boost their prices, the survey found. That’s up from the 29% who said their companies raised prices in the previous survey in April.

Consumer prices in June rose at the second-fastest pace in a quarter century, the government reported Wednesday. Wholesale prices also went up sharply during the month.

Meanwhile, most forecasters expect a continued slowdown in housing over the next six months, although they think it will be "mild" versus "substantial."

Grappling with fallout from housing and credit troubles and stung by high costs for energy and other raw materials, employers have cut jobs in each of the first six months of this year. Over the next six months, 51% said they expected to hold payrolls steady. Twenty-nine percent expected to boost them and 20% thought jobs would be reduced through layoffs or attrition.

Caught between slow growth and rising prices, the Fed is likely to leave interest rates alone when they meet next on Aug. 5. Boosting rates to fend off inflation would deal a setback to the economy and further hurt the housing market. The Fed can’t afford to lower rates more to shore up economic activity because that would make inflation worse.

Sixty-two percent said the Fed’s nearly yearlong string of rate reductions and other steps to prop up financial markets, had no effect on their business.

The survey, based on the responses of 101 NABE members, was conducted between June 19 and July 10. 

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The U.S. economy needs months to recover from its slowdown, but the banking system remains sound despite a home mortgage crisis that could cause more problems, Treasury Secretary Henry Paulson said.

Paulson also said on Sunday morning news programs he was optimistic Congress would approve the Bush administration’s request for authority to shore up the troubled mortgage giants Fannie Mae and Freddie Mac.

The treasury secretary has been trying to reassure nervous financial markets and is scheduled to deliver an important speech on markets and the economy in New York on Tuesday.

“We’re going to be in a period of slow growth for a while,” Paulson told “Face the Nation” on CBS. “I think it’s going to be months that we’re working our way through this period.”

High energy prices would prolong the slowdown, but the key to recovery was stabilizing the housing market, Paulson said.

He added that U.S cashadvance.com. banking problems were manageable despite this month’s highly publicized failure of mortgage lender Indy bank.

The July 11 takeover of the bank by Federal regulators marked the third-largest bank failure in U.S. history. The lines of frustrated depositors outside its doors provided a stark illustration of the U.S. home financing crisis.

“Our banking system is a safe and a sound one,” Paulson insisted on CNN’s “Late Edition.” 

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Psst! Here’s one you can trade on: The Securities and Exchange Commission, buffeted on all sides from the great leverage collapse of 2008, is now going to get to the bottom of the age-old dilemma of the trading desk rumor.

In a press release Sunday night that coincided with the opening of Asian markets, the SEC announced it was conducting examinations at brokers and hedge funds to determine if false information is being deliberately spread by traders to manipulate stock prices.

Philosophically, there’s little argument against cracking down on those who knowingly develop or pass on bad info. After all, such bald attempts to manipulate the market have long been illegal.

But given that sharing of rumors and information - some of it good, some not - occurs constantly across trading desks, there appear to be some truly head-scratching aspects to the SEC’s move.

The first is that the agency’s overburdened enforcement unit is already looking into, to name just a few - mortgage originator fraud, investment dealer disclosure on auction-rate securities, and broker valuations of the arcane vehicle known as collateralized debt obligations (CDOs) that has been the source of so much misery on Wall Street.

Now the watchdogs are going to chase down down trading desk rumors too?

The second is that much of the impetus of this investigation appears to have come from senior executives at several Wall Street brokerages outraged over the effect rumors are having on their companies’ stock prices.

Last week, for example, Lehman Brothers saw its share price hurt last Thursday when a story made the rounds - and was picked up by CNBC - that stock-trading giant SAC Capital and giant bond manager PIMCO had ceased trading with the firm.

A likely death-blow if true, but it was easily disproved. The stock, which closed at $19.74 on Wednesday, dropped to $15.79 before rallying to close at $17.30 on Thursday. Whatever the story is behind the origination of the rumor, shorting Lehman’s stock that day proved to be a pretty volatile - if not outright crummy - trade for those who piled on http://easy-quick-payday-loans.com.

More important, while Lehman chief executive Richard Fuld has a well-documented antipathy towards shortsellers who question his firm’s financial health, he and his deputies made decisions that have saddled the company with big losses and required it to make repeated trips to the markets to raise more capital.

So which has proven more painful for Lehman shareholders: the quick-buck artist who passes on some bogus tip - or Lehman’s decision to become the most aggressive investment bank to speculate on Southern California real estate?

Then there’s the case of Bear Stearns. A cottage industry of sorts, typified by a much-discussed Vanity Fair article, has developed that blames shortsellers for Bear’s near-collapse and subsequent fire sale to JPMorgan Chase (JPM, Fortune 500).

It’s true there was no shortage of rumors swirling around Bear Stearns on the eve of its mid-March rescue. Like most trading desk rumors, they were easily disproved and immediately forgotten.

Ultimately, what allowed the run on the bank were the huge holes in Bear’s balance sheet. Alone among Wall Street’s big brokers, Bear Stearns had a nearly $33 billion gap between what it had borrowed short-term and what it had available to repay those loans. No other broker had anything like this exposure.

In the end, the people who did business with Bear Stearns came to see it as a highly-leveraged, mortgage-bond-centered hedge fund and wanted less exposure to it.

Veteran analyst Barry Ritholtz, in his "Big Picture" blog, put it well in a post Friday. "Why is it that all these rumor-mongerers and shorts are only bringing some firms to their knees? How come they always seem to be the over-leveraged, under-capitalized, unhedged, most poorly-managed companies?"  

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There's no single solution to high oil prices, and lawmakers need to take an “ecumenical'' approach to drafting legislation and policy, according to Daniel Yergin, chairman of Cambridge Energy Research Associates.

“We ought to really get beyond `either-or' and the notion that there's only one thing to do,'' said Yergin, the Pulitzer Prize-winning author of “The Prize,'' a history of the oil industry. “It doesn't work that way in a $14 trillion economy.''

Changes to oil policy, renewable fuels, alternative energy sources and improving fuel efficiencies can all be part of a solution, Yergin said in an interview with Bloomberg Radio.

Oil futures rose 48 percent in the first half of the year amid declines in the dollar and concern that supplies won't be able to keep pace with demand, particularly from developing countries. Unrest in Iraq and Nigeria and speculation that Israel may bomb Iran have also supported prices.

Crude oil for August delivery rose 97 cents, or 0.7 percent, to $140.97 a barrel yesterday on the New York Mercantile Exchange. Futures have almost doubled from a year ago. Oil touched a record $143.67 on June 30. The price climbed 38 percent between April and June, the biggest quarterly increase in nine years.

The oil market “really reflects the success of globalization and hundreds of millions of people rising out of poverty,'' Yergin said. “Demand isn't stagnant.''

U.S. gasoline use may have peaked in 2007, Yergin told a congressional panel June 25. Consumption for the week to June 20 slipped 5 percent from its peak of 21.3 million barrels a day on Jan. 4, data from the Energy Department shows.

Supply Concerns

The International Energy Agency said yesterday that global supplies may not keep up with demand through 2013 and that spare capacity from the Organization of Petroleum Exporting Countries will shrink by 2013, keeping the market “tight.''

“I think there is a kind of shortage mentality that is particularly strong in the financial markets that believes in three to five years from now we're in an oil crunch because of a lack of timely investment,'' he said cash til payday loan. “We still have this very sort of old-fashioned view that price matters and supply and demand do work, even with delays.''

Yergin cautioned Senators Barack Obama and John McCain, the Democratic and Republican contenders for U.S. president, to “have a basic confidence in the ability of markets and don't overdo it in terms of interference and regulation'' when they plan energy policy. “Be careful what you do.''

Congressional Action

The U.S. House of Representatives last week approved a bill calling on the Commodity Futures Trading Commission to use its emergency powers to “curb immediately the role of excessive speculation'' in any market it oversees where energy futures or swaps are traded. The measure, which passed 402-19, must be approved by the Senate and be signed by the president to become law.

As biofuels such as ethanol become more important in the global transportation mix in the next three to four decades, oil isn't likely to become irrelevant or disappear, Yergin said. Still, “oil is not going to have the almost totally dominating position in transportation that it had kind of until now.''

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The current housing market is bleak: home prices and sales are plummeting, foreclosure proceedings are skyrocketing and mortgage rates are on the rise.

When will things be better?

A new study from the Joint Center for Housing Studies of Harvard University, "The State of the Nation’s Housing 2008," finds the country poised to see an increase in housing demand over the next decade.

"The good news is that we still have a growing population," said Nicolas Retsinas, director of the Joint Center for Housing Studies and one of the study’s authors. "As long as you have more households, more people are going to need places to live."

Social trends - people getting married later and divorced more often - are making single-person households the fastest growing household type, the study finds. In addition, a long-term net increase in potential home buyers will be driven by demographic factors: the aging of "echo boomers" into adulthood, an increased life expectancy for baby boomers and projected annual immigration of 1.2 million.

From 2010 to 2020, the number of households in the United States will grow by an average of more than 1.4 million per year, the study finds.

Unsold homes block growth

Still, before the housing market can turn around, it must first work off the record numbers of unsold homes on the market. From 2005 to 2007, the number of new and existing vacant homes for sale rose 46% to 2.12 million.

The nationwide glut of unsold homes has hit the real estate market hard, forcing down sale prices, stemming new construction and leaving millions of homeowners with properties worth less than the value of their mortgage.

In early 2008, the nation had an 11-month supply of unsold new homes and a 10.7-month supply of existing single-family homes, according to the Harvard study. A six-month supply of existing homes is considered a buyers’ market. Reducing the current supply will require price declines, a decrease in interest rates, employment growth, a return of consumer confidence and the revival of accessible mortgage credit.

A reduction in new home construction is another key to decreasing inventory, Retsinas said cash advance today. Privately owned housing starts fell 3.3% to a seasonally adjusted annual rate of 975,000 in May from 1 million in April, according to the Commerce Department.

A sharp drop-off in housing starts has precipitated housing turnarounds in previous bubble-bust cycles, said Karl Case, a Wellesley College economics professor and a co-founder of real estate consulting firm Fiserv CSW. Case also sees long-term growth in the housing market and agrees that immigration and other demographic trends will help fuel a long-term recovery.

"If household formation continues at pace, prices will recover and starts will rise again," Case said.

In the housing bust of the early 1990s, cities with big immigrant populations, like Los Angeles, recovered more quickly than other metropolitan areas, like Boston, with lower foreign-born, said Case.

"Not all immigrants buy houses, but many immigrants buy houses," Case said. "That has a positive effect on the prices in a market."

Regional recoveries

Retsinas said parts of the country, such as the Northeast, with fewer vacant homes could see signs of a recovery in spring 2009. He was less sanguine about markets like the Southwest, where excessive overbuilding at the height of the market means it could take two years or more to sell off excess inventory.

Recovery in the Midwest represents that biggest challenge, because the housing downturn there stems from regional economic problems beyond overbuilding.

"They’re not reacting to an overheated housing market there," Retsinas said. "They live in an economy that is shedding jobs." 

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Yahoo Inc CEO Jerry Yang ordered up a draft press release rejecting a Microsoft Corp takeover bid months before January’s unsolicited bid, company documents unsealed on Monday show.

Selective details from Yahoo board minutes and other confidential company documents in an investor suit, unsealed by a Delaware Chancery Court judge on Monday, paint a picture of how Yahoo has rebuffed Microsoft’s courtship since early 2007.

Attorneys working on behalf of Yahoo investors aiming to force the company to drop its anti-takeover defenses — opening the way to a Microsoft deal — got the papers from the company and were allowed by a judge to make them public on Monday.

Minutes of Yahoo’s board meeting last October said directors discussed “the likelihood that a third party would make an offer to purchase the company.” Yang then obtained approval to reject any offer, drawing up a standby press release for an offer that only arrived late in January 2008. The suit alleges the “third party” was Microsoft.

While many events described in the shareholder complaint have enjoyed wide media coverage over the past year-and-a-half — dating back to reports of Yahoo’s decision to reject a Microsoft offer of $40 per share in January 2007 — the new disclosures bring to light Yahoo’s resistance to a merger.

In notes from a phone conversation between Yang and Microsoft Chief Executive Steve Ballmer held the day before Microsoft made public its takeover bid for Yahoo, Yang sought to delay Microsoft, but Ballmer said he would wait no longer.

“You don’t lose anything by waiting a week,” Yang is cited as saying, according to notes taken by an unidentified Yahoo participant and released in the shareholder suit on Monday.

Ballmer responded with words to the effect that “If you really don’t want to sell the biz, then (I) don’t want to wait” according to the previously undisclosed notes of the call no fax payday loan. Ballmer also encouraged Yang to make a counterproposal and said Microsoft would forego making its bid public if Yahoo did so. 

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Toyota is preparing to rev up production of hybrids, announcing Tuesday its third plant in Japan for producing batteries that are key components for the "green" cars.

Just last week, it announced that it was building a second such battery plant.

Toyota Motor Corp. (TM) has emerged the world leader in hybrids with its hit Prius, which has sold more than a cumulative 1 million vehicles over the last decade. Sometime after 2010, it hopes to sell 1 million hybrids a year.

For that, it needs to boost battery production as Honda Motor Co. (HMC) and other automakers aim to catch up with their new gas-and-electric hybrids - a technology that is growing in appeal for the world’s drivers as gas prices soar.

The $291 million plant in Miyagi prefecture, northern Japan, will be operated by Panasonic EV Energy Co., Toyota’s joint venture with Matsushita Electric Industrial Co.

Set to be running by 2010, the factory will make nickel-metal hydride batteries, with production capacity at 200,000 a year, with start-up production at about half of that.

The latest move follows a similar announcement just last week about Toyota’s plans to build a $194 million plant in Shizuoka, in central Japan, also to produce nickel-metal hydride batteries for gas-electric hybrid vehicles.

Hybrids reduce pollution and emissions that are linked to global warming by switching between a gasoline engine and an electric motor to deliver better mileage than comparable standard cars.

Last week, Honda, Japan’s second-biggest automaker after Toyota, said it will boost hybrid sales to 500,000 a year by sometime after 2010 payday loans in 1 hour. Honda said it will introduce a new hybrid-only model next year for a lineup of four hybrids.

Nissan Motor Co., which still hasn’t developed its own hybrid for commercial sale, said it will have its original hybrid by 2010. Nissan says its joint venture with electronics maker NEC Corp. will start mass-producing lithium-ion batteries in 2009 at a plant in Japan.

Lithium-ion batteries, now common in laptops, produce more power and are smaller than nickel-metal hydride batteries. Toyota has said lithium-ion batteries may be used in plug-in hybrids, which can be recharged from a home electrical outlet, but it has not given details about a plant for such batteries. 

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Private equity firm Blackstone Group says it swung to a loss during the first quarter due to deterioration in the credit and equities markets.

New York-based Blackstone Group LP (BK, Fortune 500), which went public about a year ago near what proved to be the peak of the private-equity funded buyout frenzy, says it lost $251 million, or 97 cents per common unit. Blackstone earned $1.13 billion a year ago faxless payday advances.

Deterioration in credit and equities markets caused Blackstone to lose $188.7 million in performance fees and post a $215.6 million loss from fund investment activities. 

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NEW YORK – Gas prices jumped nearly three cents overnight to a new U.S. record of nearly $3.65 a gallon today, while oil prices paused from their own climb to record highs and succumbed to mild profit-taking.

At the pump, the average price of a gallon of regular gas nationwide rose 2.7 cents to a record $3.645, according to a survey of stations by AAA and the Oil Price Information Service. Diesel prices also rose, adding 0.9 cent to match a record national average of $4.251 a gallon.

Gas prices tend to lag oil futures, and with crude rising to a new record near US$124 a barrel Wednesday and likely headed higher, it’s widely expected the average U.S. price of gas will soon rise as high as $4. Motorists in many areas, including parts of California and Hawaii, are already paying that much, or more.

"If oil prices go the way that pundits are expecting, there’s no way we’ll stay under $4 a gallon," said Fadel Gheit, an analyst at Oppenheimer & Co. in New York.

Meanwhile, light, sweet crude for June delivery fell $1.16 to $122.37 a barrel on the New York Mercantile Exchange today. Prices rose as high as a record $123.93 on Wednesday.

Analysts said there was little in the way of news driving today’s oil moves. Investors occasionally sell a little during rallies to lock in profits, Gheit said. But bullish momentum – and expectations that the dollar will continue to weaken against foreign currencies including the euro – are likely to keep pushing oil to new records, he said.

Goldman Sachs analysts recently predicted prices will rise as high as $150 to $200 a barrel within two years. That forecast has driven much of oil’s gains in recent days.

Analysts at Goldman and firms such as Barclays Capital believe tight global supplies and growing demand from fast-growing economies in countries such as China and India are driving oil higher cash advance loans. But Gheit and analysts including Tim Evans at Citi Futures Perspective argue that supply and demand fundamentals don’t support such high prices.

"There is no reason why oil prices should be above $60," Gheit said, noting that domestic crude supplies are at average levels, and that refineries are cutting gasoline production as high prices cut consumers demand for fuel. "The physical supplies do not justify the price, it just doesn’t make sense."

Many analysts feel speculative investment driven by the dollar’s protracted decline is the real reason behind higher prices. The dollar fell against the euro today, attracting investors who view commodities such as oil as a hedge against inflation. Also, a weaker dollar makes oil cheaper to investors overseas.

Still, the market sometimes ignores the dollar, as it did Wednesday when oil surged to new records although the dollar advanced. Some analysts say that’s a sign that many investors are buying on pure momentum – believing prices will head higher regardless of negative data, news or dollar movements.

"There’s a lot of momentum driving the oil price up," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

In other Nymex trading, June gasoline futures fell 0.41 cent to $3.1141 a gallon and June heating oil futures rose 2.99 cents to $3.4772 a gallon. June natural gas futures fell 10.6 cents to $11.221 per 1,000 cubic feet. The Energy Department said natural gas inventories rose by 65 billion cubic feet last week, but remain slightly below the 5-year average.

In London, June Brent crude futures fell 63 cents to $121.69 a barrel on the ICE Futures exchange.

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Yahoo Inc (YHOO.O: Quote, Profile, Research), whose shares fell as much as 20 percent on Monday after Microsoft Corp (MSFT.O: Quote, Profile, Research) dropped its $47.5 billion bid for the Web company, is likely to face pressure and possibly a proxy battle from activist hedge funds looking to revive the deal.

With billions of dollars in financial muscle, some activist hedge funds are already laying the groundwork for a campaign after the three-month talks between Microsoft and Yahoo collapsed last weekend. Microsoft walked away, saying it would not bid more than $33 per share for Yahoo, while Yahoo wanted $4 a share more to agree to the deal.

Experts say it would likely take one or more substantial, seasoned activists to buy a large stake in Yahoo and finance a credible multimillion-dollar proxy campaign. But at least one small firm, Ironfire Capital, is talking to other firms about running a director slate, according to Eric Jackson, who heads the firm.

“I’m mad,” said Jackson, who was involved in a successful campaign last year to have former Yahoo Chief Executive Terry Semel replaced. “Yahoo’s rejection was not in the best interests of shareholders, and the board needs to be held accountable.”

Jackson’s Naples, Florida-based firm has a minuscule holding in Yahoo, just 96 shares http://payday-z.com. But if other, larger hedge funds line up and buy at least 5 percent of the company’s now-discounted stock and run a slate of director candidates that would favor a sale to Microsoft, the move could gain traction.

With 1.25 billion Yahoo shares outstanding, a stake of 62 million shares, or around 5 percent, could cost more than $1.5 billion at today’s price of around $24 per share. That leaves such a campaign likely only for the largest activists, such as Carl Icahn, William Ackman of Pershing Square Capital, Nelson Peltz’ Trian Partners, Jana Partners and a handful of others.

“There are not a lot of activists who can invest $1 billion,” said Manny Pearlman, CEO of hedge fund Liberation Investment Group and veteran of numerous, smaller proxy battles.

Icahn, who led a high-profile campaign against Time Warner two years ago and has invested over $1 billion in Motorola in a current proxy campaign, is not currently a Yahoo investor and has no immediate plans to run a campaign, a person close to Icahn said. 

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