By Andrew (Business Editor)

The first batches of government stimulus checks are being received today, although only for those who opted for a direct deposit into their accounts. These checks are intended as a shot in the arm for the economy and to boost consumer confidence. There is one thing Fed chairman Bernanke want you to do with yours, spend, spend, spend! Both he and the administration are desperate for consumers to spend these checks to make more money flow through the economy. The checks and deposits will continue throughout May and June, with the roll out based on social security numbers. Wall Street Fighter has a good FAQ regarding how much you can hope to receive and when.

While being given a cash “bonus” may sound like grounds for frivolous spending, it’s probably not the best plan if you’re struggling to cope with the crunch. Paying off some loans or a portion (however insignificant) of your mortgage seems a sensible approach if you have found yourself reigning in your spending recently. A counter argument to being that fiscally responsible is this CNN report, speculating that the crunch may be over. Even if it is, using the cash to pay off some debt is normally a good long term plan.

Oil is still very high despite a fall back from the $120 mark when futures trading moved from May to June. This is keeping derivative prices high, such as the diesel price. Gasoline is still rising but Hubdub users don’t think that it will hit $4 per gallon by the 4th of July. What do you think?

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By Andrew (Business Editor)

Well it’s been a bad week for the airlines.  With the safety problems on board American Airline’s MD-80 planes, the company was forced to ground 300 aircraft (a large portion of its fleet), leading to thousands of flight cancellations.  This spate of safety actions is as a result of the increased scrutiny of the FAA, after it came out last month that Southwest had been flying without proper inspection. The situation appears to be over for American Airlines with all planes back in the air and service running as normal.  The more long term issue in the aviation industry which is coming to light is the collapse of multiple budget airlines.

There is now a growing list of low-cost carriers who are going bankrupt.  They include Oasis, Skybus, Aloha, ATA and Frontier.  These airlines are the latest casualties of the current difficult economic situation, someone in government will have to use that ‘R’ word at some point.  Budget carriers the world over are notorious for running close to the wire  with razor thin profit margins.  This is an obvious result of the ultra-competitive market in which they operate, in a situation where the customer isn’t paying for any sort of in flight service they will simply go for the cheapest option.  Therefore when running costs increase, they can’t absorb them as lost profit as some of the more expensive operators are able to.

It looks like its going to get even harder for the budget airlines still in operation, as oil is yet again on the up.  Its currently sitting around the $113 mark but there seems little reason for it to fall back.  Will Oil close below $100 before the end of April? Hubdub users currently don’t think so.  Interestingly gold has fallen back as money goes back into the oil markets. Will it get back above $1000/oz?

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  By Andrew (Business editor)

These are far from certain times for the American economy. The Dow is on the slide, closing below the psychological 12,000 mark on Friday and fears of recession seem to be well founded. Warren Buffet has already been quoted as saying the U.S. is in recession but the federal government seems to be hoping its economic stimulus package will get it out before it becomes official. It seems recession is here in everything but name despite the best efforts of the federal reserve to ease tensions with interest rate cuts.

Not to make matters worse but while the Dow goes down, OPEC has decided not to increase production at their meeting in Vienna, Austria. This as expected has caused oil prices to increase and they are now sitting comfortably above the $100.00 point. This is not welcome news for American drivers, as gas prices increase nationwide. While the American economy does have a large effect on the rest of the world it seems that the current economic crisis is going to be most acute in the U.S. with the Dollar hitting new lows against the Euro.

The U.S., despite probably having to go through some harder times than they have had recently will most likely be able to stay afloat just because of how valued a customer base they are to foreign salesmen. For example they are still an essential market for OPEC and if consumers can’t buy oil and its derivatives, that will have a serious negative impact on the OPEC countries. The stalemate that exists between them looks like it is stable until China or India is able to make up the capacity, which may still be some years off.

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