Circuit City Liquidates

I can’t believe that it was just two short years go that my boyfriend and I were in our local Circuit City store, pricing out TV’s for our living room that we were moving into (this was right before we moved into our first home we bought). Everything seemed fine. The store was fully stocked, I had not yet heard any rumblings from the media that the store was in trouble, and everything seemed to be going fine for the electronics retailer and seller of things like software, cameras, printers, computers, and the like.

However, one thing I did notice and remarked on to my boyfriend at the time was that they seemed short staffed. It was hard to find anyone to help us with our questions, and when we finally did it seemed like this particular store employee wasn’t really that knowledgeable about the products we were asking about. Now, Best Buy on the other hand, we actually got asked if we needed help in the first few minutes of looking, and the staff seemed very knowledgeable about their products.

Another thing was that they had overall better prices than Circuit City and also seemed to have a more customer friendly setup and organization about the store. I’m not saying I think Best Buy is the reason for Circuit City’s downfall, Circuit City certainly had their strong points over Best Buy, like some of their sales and private specials were better, but overall I think Best Buy had the better strategy for getting and maintaining customers.

By the way, we went to Best Buy to return a DVD on a Saturday this past weekend, and I was a little disturbed that this particular location wasn’t crawling with prospective customers as it usually is, but I’m hoping that’s just the typical January slump.

But I digress. I think Circuit City, in a different economic climate, could have survived, they just didn’t foster that same kind of customer base and loyalty that Best Buy has been so good at doing over these past twenty or so years they have become a household name. Circuit City did try a few things before they decided to close their remaining stores, which unfortunately means the loss of about 36,000 additional jobs though.

They were attempting to file for Chapter 11 bankruptcy and reorganize their debt, but due to the credit markets being so tight right now, they were unable to do either, and had no choice but to close up shop, send their employees packing, and liquidate their assets.

You may be able to find some good deals at their going out of business sales, but be careful what you buy, because there are no returns for liquidation sales, so make sure you are getting a good product.

Obama : Dramatic Action on Economy is Crucial

Obama – now the sworn in president as of last Saturday, has repeatedly said on stumping grounds throughout Ohio for this complete economic and continued bailout plan which involves several more billion dollars to bail out industries that are crucial to the health and wealth of our economy, that dramatic action is needed to keep the country from going into an extended recession that could last for years and years.

He has said that this is one of the worst hurdles we’ve ever had to face, and that dramatic government intervention is needed if we are to have hope for any clearing up in the next few years. Many experts are predicting that this will still not clear up in the next five years even with help from the government.

What his economic package involves is some 825 billion dollars in tax cuts and spending that is aimed at creating 3 million new jobs, although in what sector it is unclear although speculation is that this means it’s in the infrastructure area. He believes that this spending, which is record government spending, while it appears to be a big number, is absolutely necessary in order that we may help restore our ailing economy that seems to be getting worse by the day, as quickly as possible.

Obama was just in my home town area of Cleveland Ohio (he was actually in a town called Bedford), pitching the spending as a way to help us recover more quickly, especially since Ohio is one of the biggest job creating states in the country, and has one of the highest per capita populations. Will it work? Well, my feeling is that it will certainly help, even though it is admittedly at the taxpayers expense and we shouldn’t be in this mess in the first place, but no president, no matter how good he is at finance or economics, will be able to single handedly fix this economy.

It’s going to take time, pure and simple, to help cure what is ailing this economy, which includes the onslaught of easy credit that wasn’t adequately backed for years, the freeing up of those now-shy credit markets, which is part of the reason we’ve seen spending by consumers so sharply curtailed, and the help of several industries in a bailout so that people can stop getting laid off and companies can begin hiring again.

Tips for Scaling Back Spending

Well, times they are a changing, to quote one of my favorite Bob Dylan songs, and only the best of the best retailers and businesses may make it out of this virtual financial storm – and I could use more colorful language there if you know what I mean – with their wits about them and some spare cash sitting around. Even those that do survive will have had to fight tooth and nail to do so in most industries, which are reeling after a weak holiday spending season in the wake of what some are terming a new frugality that permeates the reatil buying atmosphere.

Buyers (consumers) are simply not buying things unless they are on sale now. It used to be that a lot of people would shop that way, but it seems like with all the concern over jobs and the economy playing out, almost 90% of consumers are buying only when things are on sale, and some only when they are dramatically marked down.

This may be one of the ways that you are saving money yourself, I know it’s one that I’m using. I’m also starting to go to some of the stores that are radically discounted for foods and other goods that I had sort of forgotten about in favor of my normal shopping places that were more pleasant and less crowded, but also not as cheap. These cheaper food stores I’m talking about and general consumer goods are places like Aldi’s food store where you can buy food items dramatically marked down, but you have to pay a deposit for your cart and you also have to pay for your bags.

In the end, it’s well worth it and you end up making out on your grocery shopping bill. I’m also remembering discounter Marc’s as well, who has narrow, cramped aisles and not the most pleasantly arranged store, but who you also can pay as much as a third less than the typical grocery store for most given items. I’ve also been making a few trips to a store that I usually avoid like the plage, which is Wal-Mart, because while I believe their retail structure has ruined lots of small businesses and don’t like a lot of their other policies, they are cheap.

A lot of people are going back to cheaper retail shopping outlets as a means to save some money, it’s not just me, that’s for sure. Dollar General, and Dollar stores are starting to realize their profits are going up because people are going to them instead of the department stores and grocers for items that they can get there.

Try lowering the heat in your house and instead piling on the sweat shirts and undergarments to keep warm. It’s amazing what a good pair of toasty socks, some slippers, an undershirt and big comfy sweatshirt can do to keep you warm, and you’ll also enjoy a lower heating bill. Putting plastic up on the windows helps immensely as well, and if you leave the curtains or blinds open during the day on the side of the house that gets the most sunlight, you are also getting solar energy supplemented, which can help your heating bill as well.

Use your rewards credit cards like gas credit cards, airline miles credit cards and other similar reward style credit cards to make all of your purchases instead of cash. This way, as long as you are paying it off every month, you are essentially getting something for nothing (besides the many times annual fee you have to pay for cards like these), because you are getting your miles or free gas or points toward purchases for things you would buy anyways.

I’m on Hold to Get Better Mortgage Rate…

I’m on the phone on hold with my primary mortgage company to try to get a better interest rate on my primary mortgage loan, which isn’t bad to begin with, but I’m really interested in getting my primary and secondary mortgage combined, since the secondary mortage rate is higher than I’d like. It may be possible, at least per the first representative I spoke to, without closing costs, to get a better (lower) interest rate on at least my primary mortgage with them.

Right now, banks are swamped with people looking for lower interest rates on their home mortgage loans since people are figuring that their chances of getting a lower rate than what they started out at is good because the Fed has lowered the prime rates so many times now due to the economic conditions. I have been waiting on hold now to talk to an actual mortage loan representative for about fifteen minutes, and was told that due to long hold times I could be on hold for about a total of twenty minutes or so.

Update : I was on hold for a total of twenty seven minutes, only to be told that due to the outstanding principle balances on my two loans, I was not eligible at this time to get a refinanced loan for both of them, because it would have to be considered an FHA loan, and the FHA loans in my area only have a limit of so much, and combining our two principle balances would make that amount too high, making it impossible to make us eligible for that loan.

However, then he looked into just giving us a lower rate on the pre exisiting primary mortgage that we already have with them, since there would be no closing costs and we already had financing through them. He declined that as well though, he didn’t want to say exactly why, but it was something about that it was due to the limit on that loan as well. They did run credit on both of us (see how you can get your free credit score report)My hunch is that they saw we’ve made timely payments, could handle them, so why give us a lower rate when they could still make all that interest off of us!?

I have to admit I’m a little annoyed, because why do these companies send you these preapproval mailings acting like you’re all but approved for new loans to save money, and then make you call and get on the phone with them for forty minutes, only to turn you down for reasons that aren’t totally clear. I have a feeling this was a business decision based on some sort of money making matrix, and we didn’t fit into that matrix. Oh well, I’m going to try again if I get another offer from a different company!

Jobless Rate Makes Job Searches Much More Difficult

The jobless rate jumped in December to about 7.2 percent, which they say is the highest rate since 1993. Not so scary, since we know we all survived 1993, right? Remember, we’ve survived worse – not you personally maybe, but your family members who are older, have survived much worse and maybe even emerged all the stronger for it in the end. Think the Great Depression, which most experts say this current economic crisis will not turn into, a lot of people were in dire straits during those times, but those that emerged did so as a stronger entity, and a more frugal and wise one at that.

Now, with so many people on the hunt for jobs and employers cutting hiring and laying off, or cutting out certain jobs all together, it’s getting harder and harder for those that are out in the job market to find jobs that fit their needs as well as pay equal to what they were making at their past job. That last part is key, many people are taking huge pay cuts at another job, just to be gainfully employed with benefits and a steady paycheck, which is contributing to further decline in consumerism and other problems that are contributing to the economic crisis.

Think of it as a machine that feeds itself by perpetuating things like joblessness and consumer demand, it’s a vicious cycle, which is part of the large problem of solving he current crisis. It’s built momentum, and it’s hard to stop anything that’s built so much momentum easily, so that’s the problem we will be faced with for many more years. Sure, we may begin a recovery in 2010, but it will not fully surface back to it’s pre-woe levels for a while, which is the scary part, especially for investors!

Because the recession is so multi pronged, it’s hard to find jobs in most industries. One of the only industries that may not be facing serious cutbacks and may still require some professionals is the medical industry – for instance nurses and doctors, anesthetists, etc. The current problem has infested most industries, including the banking industry, energy, insurance, retail, auto, restaurant and more. By the way, one of the fast food restaurants that is seeing a nice increase in business since the hard times set in is Subway, apparently they timed their five dollar offerings menu perfectly with the current state of the economy.

Millionaire and Billionaire Suicides Just Starting?

It started with a French billionaire who lost up to a billion dollars to the massive Bernard Madoff ponzi scheme just a few weeks ago taking his own life in his own office building at the age of 65, and it looks like these financial hard times have claimed another tycoon billionaire who is struggling against the problems of today’s economy and facing what they feel like at the time are insurmountable odds.

It’s never worth taking your own life though, no matter how bad things get. Things can always be turned around and people can always start over, so just know that if you ever feel so low that you feel this is the only way out. Whenever I read about people taking their own lives usually due to a situation that often seems gutwrenching and unsolveable, but is, at it’s core, solveable and fixable, my heart goes out to them and their families because I feel like they just may have been pleasantly surprised at how resillient they truly are if they had hung in there to see it through.

The second billionaire who has taken his own life is a German tycoon (Adolf Merckle, a quiet and private man) that made his family business into a billion dollar empire. He was 74 years old and stood in front of a train which took his life. Hopefully this is the end of these kinds of stories and no one else follows suit. It send a message that things are hopeless, and obviously hurts a lot of family members and friends.

Just Got My Annual Free Credit Report

Did you know that now you are supposedly entitled to three free credit reports a year instead of the previous one a year? I did not know this had changed, because last I heard, it was just one, and when I did a little reading in an unrelated article, it said you are now entitled to getting three a year from any of the big suppliers like Experian and Transunion, per year.

It’s a very basic report though of course. It only tells you certain things, and I’m sure the pay services tell you more useful information, but if you’re just looking for a very basic report to see if there are any issues you can fix with your credit before applying for a loan or going to rent a place out or something else where your credit is run, then the free one should do the trick for you since it will tell you of any flags on your report. Free credit score checks are a great resource for spot checking your credit and getting any issues resolved that you might now even know about.

I went to AnnualCreditReport.com to get mine, since this is the site that helps consumers go through the motions to get their free one, but it does mention that you get one free one a year, so now I’m unsure of the other information that I got about three free ones a year, that may not be right after all, unless they only advertise one but you are actually entitled to three.

I got my credit report through Experian, and found to my delight that there were no issues and all the open credit accounts, loans and lines of credit I have that are still open are in good standing and that there are no issues I need to fix. Now, what it doesn’t tell you is your FICO score or any numbers that are actually used by the companies that will extend you credit when you need it, that could definitely be useful information that you don’t get through the free version, and may have to pay for or find an additional service for.

Here’s what your free credit score shows you : All open accounts, who they’re with, what your monthly payments are to them, how much you have in an available balance with the credit line, and also how much you have left to pay off in your balance. Here’s how accurate that is, I literally had just made a car payment the day before and had a new balance, and it had already shown on my credit report as the newer balance, so they must send the information quite quickly over to the credit vendors.

It will also highlight to you any companies to whom you are on record as owing money to, and any potential red flags that can alert you to someone you still owe that you have been sent to collections for, which of course adversely affects your credit.

Unemployed Taking Pay Cuts Just to Get New Jobs

I just read a really disturbing article, and although it makes sense, and I had heard the rumblings about this potentially happen months ago, I nonetheless feel really bad for people who are stuck in this situation. What situation is that? A lot of people who were previously making six figure incomes at their previous jobs are taking large paycuts at new companies, just so they can be gainfully employed, and are also having the make drastic lifestyle changes to adjust to their new income.

As if the unemployment benefits aren’t bad enough, which are just a fraction of one’s salary, especially if they are not offered a severance package when they’re laid off which usually pays full salary for weeks or months, depending usually on one’s tenure, and they have to rely solely on measly unemployment benefits.

There are stories abounding about people who are highly qualified and have a lot of experience, having been with large companies or small ones in higher positions that are well paid, being turned down for jobs of the same caliber when they go for them because the competition is so fierce for these higher level and higher paid jobs right now. Heck, it’s so bad that many CEO’s may soon find themselves scrambling to find comparable jobs to ones they once had as well, which is even harder because the pool of jobs is very narrow for these types of high ranking positions.

These are definitely times when it pays to have a large savings account for emergencies, as many people who have lost high paid jobs are finding. Even people who did have savings are finding that they are running out due to longer periods of finding a new job. Many people are also taking fifty percent or more paycuts just so they can be employed again with benefits, and some aren’t getting jobs until their unemployment benefits or severance packages are running out, which means they are more willing to take large paycuts just to be working again.

This the unfortunate part of working for corporate America, if I may put a little bit of personal commentary in here. Once you get to a certain pay and experience level, you are usually also more prone to getting laid off when times become rough for a company, because the highest level positions are where they are going to save the most money on salaries paid. This is also why it pays to have that large emergency savings account and always spend below one’s means just in case there is a fire!

Who Else Will File Bankruptcy in 2009?

With the large stores that seemed financially stable and have been around since I was a kid at least going out of business in 2008, such as Bombay Co, where I took advantage of a few closing sale items myself in the one up the road that closed months ago, and Linens and Things, which also seemed to be stable, one wonders what other businesses will have to close their doors in 2009, as the recession deepens and the economy puts more of a strain on consumers to keep their money and not spend on discretionary items.

Most analysts are saying they believe 2009 will be an even worse year as far as layoffs, store closings, and potentially even more industries saying they need help or need to close their doors, which of course doesn’t feel too good to most of us, like me, who were hoping for a quick recovery. Heck, a lot of us are worried about our own jobs, especially if we work for larger corporations in industries that are in trouble. I work for a large insurance company and we were told that our jobs, at least in my department, which is usually minimally impacted by layoffs, were safe for the time being.

That doesn’t mean that most of us are holding our breath though, as the news on the economy seems to get worse, and even the usually most upbeat of analysts are saying they are uncertain about 2009. The silver lining, of course, continues to be that we will see more declining prices on consumer goods, especially on electronics, which are in less demand with these times since they are a high ticket item.

I’m already in the market for a new desktop computer since my other laptop went kaput, and I’m seeing some great deals, but I might just hang in a bit longer and see what else I can get my hands on since I don’t believe the prices have quite bottomed out yet. Like I’ve said before, the declining prices on consumer goods is sort of a double edged sword though, since most people don’t have the money to buy these items, even at their deeply discounted prices, or are too fearful because they still feel they need to watch their money.

In other positive news, the unemployment claims rate was not as high as forecasted in November, according to the December report, but some think that may just be due to the holiday season and a possible reprieve, and that we will start to see a lot of beginnings of layoffs in January, which has been predicted for a while now.

Whatever the future holds for us in 2009, we all have to know that we’re in the same boat. Millionaires and billionaires have lost money too, not just the average joes, and people who normally may spend money on whims whenever they want are even holding onto their money. For the new year, you may want to make it your financial resolution to get those high interest debts paid off through a credit card debt consolidation loan that offers a better, lower rate and less hassle than paying multiple cards off to help simplify your life and give you peace of mind through the turmoil.

People who make six figure incomes may be particularly impacted, because they may be targeted for layoffs more than lower level salaries, so this recession and economically hard times affects every one of us in every walk of life. We must stay positive and focused on a brighter future, and not let this negativity work its way too far into our psyche.

Retailers Asking for Tax Free Shopping Holidays

Reatilers, including Sax Fifth Avenue, JC Penney and Petsmart, have written a plea to President-elect Barack Obama, appealing to him to instate several tax free shopping holidays across the US, where shoppers can go on certain days and enjoy buying merchandise without any state taxes added to the total of their purchases. For many people, this means a savings of anywhere from six to seven percent right off the bat, including us here in Ohio, to varying degrees since our sales tax varies per county here.

Of course, this means the states would be shorted their typical sales tax revenue on these days, but that also means that the federal government would be asked to reimburse the states for the missing out on taxes for those selected days. Uh-huh, that means another federal “bailout” plan, with your tax dollars, so you have to ask yourself, are you really gaining anything here as a consumer, or are you in the end just breaking even, and the retailers are the ones who are making the money on this, at the expense of tax payers?

I suppose it seems like a good deal at first glance for the American consumer, but upon further examination, I’m not sure it really holds up as much more than an obvious tax break and sales generating machine for retailers. Also, with the economy is such a dire state right now, would the average American consumer really be able to go out on these shopping days and get what they want to begin with? I think these are all questions that the President-elects administration would definitely need to heavily consider before they push something like this through since it’s somewhat radical and different from any other approach.

I suspect this is just one of many pleas that Obama will be barraged with when he finally enters office in January. There will be multiple appeals to him from corporations, industries, and lobbyists, all wanting in on the federal doling out of money, and all pleading their cases that their situations are undoubtedly so dire that they can’t do it without the help of the federal government, destined to fail if they don’t get their share of the onslaught of federal money that seems to be endless lately.

I’m not sure what this all means for the economy, but the hope of retailers is that any excess inventory they purchased for this dismal holiday season will be made up for by the hopeful increase in sales when the economy is thought to possibly rebound, potentially in spring of 2009. Some say that is way too early though, and that we have a much longer path unfortunately.