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lol... this is kind of an eye opener in a lot of ways.
'R' word looms as US awaits release of official figures
Official figures are expected to confirm that the world's biggest economy has contracted in the first three months of this year, and if that is the case, the US would be just one set of negative numbers away from being officially in recession.
Throughout the year, US President George W Bush has been trying to convince Americans that a recession can be avoided. But his latest attempt at reassurance took on a less certain tone.
"If there's a magic wand to wave, I'd be waving it of course," Mr Bush said.
The US President was fending off increasingly tense questions about the health of the world's biggest economy, as he braced himself for confirmation of what many economists agree is inevitable.
Not surprisingly, Mr Bush was guarded, going nowhere near the 'r' word.
"The words on how to define the economy don't reflect the anxiety the American feel," he said.
"The average person doesn't really care what we call it, the average person wants to know whether or not we know that they're paying higher gasoline prices and that they're worried about staying in their homes, and I do understand that."
Pessimism rules
Mr Bush will have an acute understanding late Wednesday night (Australian time), when the first quarter national accounts are released.
They are expected to show the US economy contracted in the first three months of this year or at best, flat-lined.
But a second successive quarter of negative growth would constitute a technical recession, not that many Americans would be surprised.
Lynn Franco is director of consumer research at the Conference Board, which today released its latest gauge of American consumer confidence, now at its lowest level since 2003.
"I think consumers are sort of getting hit from all angles," she said.
"Right now consumers are extremely pessimistic, extremely cautious. We saw our inflation expectations soar to a level we've not seen since following Hurricane Katrina, in a combination of both prices at the pump and prices at the grocery store."
That is on top of the genesis of the current mess in the US - the meltdown of the subprime mortgage sector which has pushed housing foreclosures to record levels.
Rick Sharga is from housing research group RealtyTrac, and says housing prices have fallen by 13 per cent in America's top 20 market, and there is still no sign that the worst is over.
"Forty-six of the 50 states and 90 of the 100 largest metropolitan areas have seen increases in the past quarter," he said.
"Arizona, Connecticut and Massachusetts have shown a fair amount of recent growth.
"Almost 650,000 households received some sort of foreclosure notice in the first quarter, which works out to being about one in every 194 US households receiving a foreclosure filing during that period."
And many Americans who are struggling to buy life's basics - let alone pay a mortgage - are lining up for financial advice.
Atlanta consumer credit counsellor, Scott Scredon, has some hard advice for families battening down budgets, now that the boom days of easy credit are coming to an end.
"The golden rule is to live beneath your means, obviously spend less money than you make," he said.
"Do you need cable television and if so, do you need 250 channels? If you have children, especially if they're 12 years old or older, do you need three, four, five cell phones in the household?"
Awaiting Fed action
While US consumers are looking for direction, economists are expecting more action from the US Federal Reserve overnight. It has already cut official interest rates by a total of three percentage points since September.
The betting is that Fed chairman Ben Bernanke will cut once again.
Roger Bootle, like most economists, expects the benchmark rate to fall to 2 per cent.
"I think they'll probably cut by a quarter, but I don't think that's going to be the end of it," he said.
"The market seemed to think that there'll be some sort of pause afterwards and that may well be right."
He thinks they could fall even further, but that the US central bank will now start debating the balance between dealing with a recession, and fighting off inflation.
"There are two camps really on the Fed board. Two intellectual camps in general - all those that are worried more about inflationary risks, and those that are more worried about the downside risks of the real economy," he said.
"We will have quite a few rate cuts and as it were, this could then sort of hold the balance between these two opposing views.
"I guess the hope would be that further news would emerge over the next couple of months to make it clear which way things were going, and my own view is that the economy is going to be proved to be pretty soft.
"I'm hopeful that inflationary pressures will subside as the year moves on, but I still think myself that US rates are coming a lot further down."
The uncertainty in the United States continues to be reflected in Europe, where Germany's Deutsche Bank has posted its first quarterly loss in five years.
The outlook is so foggy that the bank will not give a forecast for its full year profit result because of the unprecedented financial circumstances.
The bank says it simply cannot see that far ahead.
ABC News Australia
Magic wands, banks that refuse to forecast... 
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