What’s the Holiday Shopping Season Looking Like?

Gosh, seriously, I feel like all I do lately is provide the latest gloom and doom financial news that permeates the media by the dozens these days, but I guess I have to still report the facts as I see them at least, right? Well, it’s no secret at this point that this holiday shopping season is not shaping up to be the greatest news. No shock there, right? But the other part of that is that of course many are saying it’s going to be one of the best bargain hunter’s dream season we’ve seen ever.

However, as I just talked about in my last posting, deflation, or falling prices is hardly ever good news in an already browbeaten economic atmosphere. Most economists and analysts are saying that if October’s record drops in retail sales are any indication, consumers are holding onto their money for dear life and will definitely be holding out on holiday retailers as well, making this one of the worst retail sales holiday seasons on record. Heck, I was just discussing this with my own family, and we decided to put a lower than usual price limit on our own annual gift exchange for the Christmas holiday.

I’m imagining that lots of people are doing this, scaling back on buying gifts for their friends and family and maybe instead putting the focus of their holiday shopping dollars on kids since they are the most important part of the holiday season. Even toy retailers have been feeling the crunch of the shopping moratorium, with makers like Mattel and Toyco’s stocks dropping in the wake of dismal forecasts for toy sales this season. However, it still must be noted that in times of economic downturn, parents still notoriously keep spending on their children.

I’ve already gotten the down low on the black friday shopping deals in my email, and believe me, if you are in the market for any kind of pricey electronic like a laptop computer or even cameras or GPS devices, then you really should think about making those purchases around this time since you may not be finding many better prices any time soon on these types of normally high ticket items.

If you’re not feeling the economic crunch and your job is safe, why not use this as an opportune buying experience for some of the higher priced items you may have been putting off? Sounds good, doesn’t it? Just make sure you’re not spending money that should be saved in case someone in your family loses their job, if you think you may be at high risk for that.

Deflating Prices Not as Good as You’d Think!

So, we’re all really happy that the gas prices have gone back down to levels not seen in a few years, to that I can attest, and I personally couldn’t be happier that I’m not longer paying double what I used to for filling up my modestly sized gas tank! However, I also can’t ignore the fact that this is not a good sign for our economy, since falling prices that just don’t stop falling is not good either. It may seem like it’s a nice relief, but in fact what it does is put the economy into a further tailspin once the prices fall and people still can’t afford to buy things, or are too afraid to buy things because of the current crisis we are seeing.

Actually, the concern over deflation is well warranted. Deflation is a normal process that occurs during down economic times, but these economic times are unprecedented from what most of us have seen in our lifetimes. In fact, if the deflation keeps occurring, then we are going to be faced with more momentous problems when it comes to economic growth since stagnating prices are making it harder for companies to make money, to hire people and keep them, etc. etc. It’s also incredibly hard to get the economy out of the current situation with prices that don’t stop falling.

Some of the prices we’ve seen fall are of course, most notoriously probably, the price in gas has fallen. Also following that though are the prices for electronics, clothes and other goods that are suffering because people are just holding off on buying them. Look at what’s happened to the auto industry lately- it’s been battered in a matter of just a few months because no one is opting to buy cars any more! This is definitely a problem.

Like economists say, deflation is good if you’re in a decent or recovering economy, but when you have deflation combined with the torrent of other going on right now, and the combination of that with the bailouts and the unemployment rates and credit lockdown, then you have low prices in an environment where no one can afford to buy these things or has no desire to buy them anyways, which is definitely not a good combination for growth.

Consumer Spending Hits Record Low in October

Well, sorry to report all the doom and gloom, but it seems to be the only news to report lately in the economic and financial sector! Don’t fear though, things will bounce back – they always do, no matter how hard and bad they get, they will be sunny and bright again, it’s just hard for people to imagine that right now because of all the negative news and sentiment that follows. At an rate, the silver lining around this bit of news about consumer spending hitting a thirty year low for October of 2008, is that maybe Americans are finally learning to save their money when they need to.

It may mean that this is a turning point for American consumers, that they will no longer so easily or without a lot of thought spend money that they don’t have or constantly live above and beyond their means, only to pay for those sins later when they have gotten themselves in too deep and need to be bailed out – kind of like the current predicament that mortgage lenders and the big three auto companies have themselves in.

Apparently October was a very bad month for retailers, and the numbers just now coming in for the month are pretty dismal, showing a much lower increase in spending (yes, every year there is an increase, but that’s because that signifies economic growth, and that’s supposed to happen), this time there was very little growth, which only coincides with the point that we currently find ourselves in a prolonged recessionary period.

Spending reports from retailers are showing that their sales are way down over historical figures this time of year, even with great sales and incentives being offered. Speaking of another silver lining, the deals I’m seeing and the coupons I’m getting in the mail from virtually every store that I spend money in are unprecedented.

I’d have to say that if I weren’t in the same “broke” boat as everyone else and the watching my money boat, I might be snapping up some exceptional bargains myself! I’m thinking that I may at least take them up on a few, but they will be for Christmas gifts, probably nothing for myself since I’m on “me” spending lockdown mode at the moment.

Bankruptcies Way Up in October

Yes, people (or shall I say my friends in honor of McCain), Americans are indeed suffering this year when it comes to personal finances and debts that outweigh their income, as evidenced by the latest bankruptcy filings for October, which just trickled in and staggered most people.

This is only vindication for what many economists and strategists have been saying this whole year, that bankruptcies will soar, as home values go down, the 401k savings that people have the majority of invested in the stock market have plummeted, and jobs remain stagnant with pay also remaining on strict budgets and remaining pretty much the same year over year for the past few years.

I know for my job personally, I haven’t seen a raise that’s over 3% in the past three years, and my company is doing ok right now, although it is struggling with some of the economy’s woes and loss os customers and profit just like almost every other company. That doesn’t even keep pace with inflation, so what that means is that even though I’m seeing a percentage increase in my wages, it’s all going right back out the door in increased cost of living for things like gas, heating and electricity bills for my house, and one of the most expensive things lately, groceries.

Most people are in exactly that same boat with me, except they have it worse. Many reasons are that some have gotten in over their heads with a larger mortgage than what they could afford (thanks to the predatory lending practices of many major banks), people have been consuming more and more on credit without a solid plan for paying that credit off month by month and are drowing in the high APR interest that remains every month when the bill is not paid in full, and there are also more companies laying people off in response to the lacking economy and forecasts that are lackluster when it comes to corporate performance and consumerism.

For these reasons, bankruptcy filings went up almost 40% just in October alone, when compared with bankruptcy filings in October of 2007. That’s a huge concern, and will further lend to instability in the economy, but more frightening is the fact that we have already blasted right by the numbers of filings for all of 2007, and we haven’t even concluded the 2008 fiscal year yet, which means we are in for astronomical numbers for bankruptcy filings for the year 2008.

Deals to Be Had in Recession

While a recession and prolonged finanical hardship in the economy are obviously not a desirable thing, there are some silver linings around those deep, dark clouds that the media seems to constantly like to remind us of, even when we are almost in the midst of forgetting, at least for the time being, that the economy may be at the beginning of deep and prolonged plunge, and our jobs could be in jeopardy.

The silver lining around the recession and credit crunch cloud is that we may soon start to see LOTS of good deals, in almost every sector, to be had, as merchants try to drum up business and lure us in by offering reduced prices on everything from appliances to financing on larger electronic items as well as makeup, clothes, foods, restaurant dinners, entertainment, and more.

I’ve already seen numerous ads that entertain the idea that they are reducing prices for this hard economy, and have wished I could take them up on all of it. Heck, we’ve even been thinking of putting a deck on the back of our house for quite some time now, and around now would be a great time to do it since most contractors are also offering lower prices in fear of not getting enough business because people are holding on to their pesos around now.

If only we weren’t also afraid for our jobs, one of which is based in sales which is mostly recession sensitive, we would have taken most merchants up on a lot of deals on things that we’ve been thinking about purchasing for a while anyways. They say even the rich are watching their money right now, for fear that even their businesses may suffer during this economic downswing.

However, if you truly believe you will make it through this just fine without a scratch, you really may want to consider diving into one of the great deals you see. It may just be a once in a lifetime deal!

Saving Money on Heating

We are in a recession and all of us are trying to find ways to trim our budgets. Wintertime often taxes our budgets even when the economy is in good shape. A main concern for all of us is the skyrocketing cost of heating our homes.

Many of us are looking into alternative means of heating our homes to try to assess which method is best and the most economical. Burning firewood as a source of heat is one alternative. The advantages of this method are it is a renewable energy source, if you have your own woodlands, the cost is minimal, it provides a steady source of heat and it will work even in a power outage.

On the down side of heating with wood there are disadvantages. There is the possibility of creosote buildup with the likelihood of chimney fires. Chopping and burning with wood is time consuming and dirty with insects and ashes. There are hidden expenses such as log splitters, trucks to haul the wood and chimney maintenance. If you have to buy the wood, it is too expensive to be cost effective.

Anthracite, or hard coal, is gaining popularity as a method of residential heating. Some of the advantages of burning anthracite for fuel are it has the highest BTU per ton when compared with other residential heating fuels, it burns clean with very little odor, you don’t have to worry about creosote buildup in your chimney and it is a domestic product.

There are also some disadvantages of burning anthracite for your heating needs. They are that it requires an electric blower to burn, a fine ash can escape from the stove into your home and it has limited availability. Another alternative source of heat are wood pellets. A good pellet burning stove sells for about $2000.oo to $4000.00 plus installation. The good points for wood pellets are they are a clean, green fuel, they are cost effective when compared with other heating fuels, they are convenient and the stove can be direct vented.

On the down side of wood pellets, the stove requires electricity for the combustion blower so they won’t work in a power outage. The quality of the wood pellets is not always consistent from one manufacturer to another. Sometimes, people have an allergic reaction to the ash and dust residue. If you are being shocked by your high heating bills, you may want to investigate different possibilities for your heating needs.

3rd Quarter Financial Results Show Recession

Well, the numbers are in for the third quarter of the US GDP count, and it of course points to a fact that many of us have already accepted, and that is that consumers are feeling the financial squeeze of economic conditions, and the GDP (Gross Domestic Product) has fallen by a fraction of a percent (which believe it or not is significant when we are talking about the economy and the GDP), forcing economists to acknowledge and confirm that the recession has begun, and that most likely we will see a few more quarters of a depressed GDP before we see it get any better.

As far as the numbers, they really don’t lie, and it’s undeniable that we are at the start of rough economic times, which some say are going to last years and others say that is blown out of proportion and that we will pull out of this before then. Either way, it’s important to know that there are always little ways that you can save money and put more money back in your pocket, and help you and your family to get through the recession as unharmed as possible.

One thing you can do is to scale back on eating out. Eating out is one of the number one wasters of money. Although of course it’s fun and festive to go out to eat, and you always feel like doing it especially if you hate cooking or are low on time, it’s also incredibly expensive when compared to buying groceries and cooking yourself. Now, if we’re talking fast food here, then you may actually break even, I’m talking about eating out at sit down restaurants where you pay a tip to a server and the whole shubang.

Eating out at fast food places of course is another story because you have the infamous value menus, the money saving discounts, coupons and promotions that are often run, and of course because the food is low quality and bad for you, it starts off at a low price. McDonald’s double cheeseburger anyone? It’s still on the dollar menu, and you can’t buy groceries that cheap these days!

How about cutting down on entertainment costs, such as buying things like liquor and beer at bars and restaurants and for your home, and cutting out things like movie club memberships and instead renting free movies at the library (a work friend just gave me that idea the other day)? It saves a little bit of money, or some people’s case a lot, and it’s relatively painless considering the other things you could go without. Cut down on your grocery bill by buying things that are on sale, and veering toward more cost effective brands, or try clipping coupons, that’s a great source of saving!

Try to make it without making any major purchases for a few months to a year. Take us for example, we’ve had a washer and dryer that have been on the fritz for a few months now, but they still work. We decided that due to the economic recession and the fact that there could be layoffs where we work, we are going to scale back, and decided to put off this major purchase until things get better again.

Ominous October Leading Way to Better November?

October has been a terrible month for many people – financially speaking. Even so, when I went to the grocery store and Wal-mart before Halloween, spending seemed to be in full swing, as everyone was out buying, buying buying – which is what we need consumers (us) to do in order to get this economy back into full swing and make the US the biggest and best economy in the world again. We also need for the US dollar to regain it’s strength as one of the strongest national currencies, and get ahead of the Euro at least a little.

I’d definitely feel better about that one, considering I hire out some of my work to Europe, and my American money only buys about half of what it did before our dollar crashed! Enough about me though. Sentiment in October was very brutal, and most people admitted in polls that they feared for their jobs, and that if the American economy didn’t get back on track, there would be massive layoffs and repositioning of companies due to consumer spending being down and a general feeling of malaise about buying and spending.

I’m in the same boat. I work for an insurance company (that’s my day job lol), and I’m definitely not immune to any layoffs that the company may decide they need to do. My department is already trying to not rehire when anyone leaves the company, and are trying to spread their work to other people instead, which is saving them money. A lot of companies right now are trying to figure out how to cut costs, and unfortunately one of the ways they do that is to cut their workforce, which is unfortunate.

Many companies took huge hits, as did invidividuals, in the stock market in October, where the Dow Jones industrial average dropped precipitously and had everyone panic selling and cashing out, getting into safer investments or converting into cash. This means that companies lost a lot of money, since a lot of companies not only rely on revenue from the service of items that they sell, but they also make a lot of money through investments, and they’ve lost out too.

We also have the fact that people who are close to retirement or are actually in retirement and living off their growth of their funds, lots a lot of money as well since they had their money in the stock market.

Greenspan Addresses the Credit Crisis

Alan Greenspan, the former head of the Federal Bank and the Federal Reserve Chairman, which is the position currently held by his successor, Ben Bernanke, has sat down in front of a congressional committee designed to question those that were in power when the crisis supposedly took root and find out what the answers are to why it started and basically to make these guys sweat.

However, it is my opinion that it was not one person responsible, but a whole bunch of people, from the businesses and banks that bundled these high risk home loans as investments, to the investors who took them up on it, not taking into account that if the housing market crashed down, so would their investment. They did not take into account that the housing market is cyclical, and so is their investment, so many people’s savings and retirement funds were wiped out once the housing market hit the fan, so to speak.

Greenspan did not specifically address the criticism he has received as being a major contributor to the current crisis, but instead seemd to squarely place the blame on the investors and the banks who gave loans indiscriminantly and also bought these securities not thinking about the future of them. He is partly right, but he is also partly to blame along with any other advisors who made the decisions to lessen government regulation of the banks and securities organizations that created this mess in the first place.

Greenspan, still a trusted figure when it comes to economics, said he believes that this crisis will result in a severe downturn and will also unfortunately result in many Americans losing their jobs since consumerism will not be at it’s traditional peak as it usually is, and businesses will suffer and pass that suffering on to their employees by way of layoffs as well as cutting overtime and raises. In short, we have ourselves in a big nasty bind and it will take a long time to pull out of it, but we will. The US economy always pulls out, it’s just a matter of time.

Silver Lining Around Economic Downturn : Lower Gas Prices

The silver lining around the bleak economic world of today’s days is that we are now, quite suddenly, paying a lot less at the gas pump than we were just a few short weeks ago even. That silver lining seems to be lost on people’s worries about whether they might lose their jobs, or whether they can keep their houses, and how they are going to ever recoup their retirement money, which for many people has gone down by as much as forty percent thanks to a haywire, scared stock market rife with selloffs from panicky Petes whom I can’t blame to panic.

Gasoline has shot down because of fears of a recession as well as fears surrounding the whole economic collapse that was precipitated by greedy banks trying to wrap subprime loans as investments. When it all fell apart, many of these bank’s CEO’s were still given their golden parachutes while the American consumer has been left to pay the bills thanks to a government bailout (which by the way is still being worked on supposedly), which will essentially be a loan given to these mismanaged financial institutions that will, or at least should, be paid back to us over the years.

It will take a very long time to pay it off, and hopefully there can even be some profit made by the government so that the taxpayers can eventually see some sort of tax relief in the future. I’m not holding my breath for that of course though, as I’m sure you are not either. Gasoline price averages have fallen below $3 a gallon, but instead of that making headlines there is more gloom and doom surrounding the economic hard times we are just beginning.

That’s right, just beginning, according to many financial and economy experts, although of course no one can tell the future, it does look like we are in this recession for a pretty long haul, and even after it’s “over”, we’ll still have gone backwards and it may take years for some people to recouperate what they lost in their 401k’s and other investments thanks to a continuously tanking stock market and more and more selloffs from people who are trying to take their profits, or what’s left of them, and run.

At least I’m feeling the relief at the pump, but to be honest I’d rather the economy be sailing along than me paying less for gas. That way, I wouldn’t have to worry if my job may be in jeopardy and perhaps I could be the next person worried about paying their mortgage bill on time.