NY Times: Consumers Are Saving More and Spending Less

Consumers Saving More Than Thought


By CATHERINE RAMPELL
Published: August 3, 2010
Consumer Spending Stagnates in June (August 4, 2010)

Economix Blog: G.D.P. Probably Worse Than Reported (August 3, 2010) A new government report released on Tuesday showed that consumers saved 6.4 percent of their after-tax income in June, and that this savings rate had shot up as high as 8.2 percent in May 2009. Before the recession, the rate had hovered at 1 to 2 percent for many years.
The questions now are whether America’s newfound love affair with frugality will continue and whether families’ reluctance to spend will hold back economic growth.
In earlier reports, the government had estimated that families had not changed their spending patterns much in the last few years, despite the economic tumult.
As a result, many economists had worried that a big shock might be coming soon, when consumers finally faced the music and began the painful process of reducing their debt. So on the one hand, the fact that consumers really have been saving could be taken as very good news.
“The optimistic view is that this means consumers have built up a bit more of a cushion than we thought,” said Nigel Gault, chief United States economist at IHS Global Insight. “If they’re in better financial shape than thought, then maybe they could spend a little bit more freely going forward.”
That is not likely to happen anytime soon, though, he said. “It’s difficult to see consumer spending doing a lot better until we see more job growth,” Mr. Gault said.
Many other economists agree.
Ben S. Bernanke, the Federal Reserve chairman, said in a speech on Monday that Americans would start spending once they got a healthy increase in their wages or salaries. But it is not clear when that will actually happen.
Private payrolls have shown slow growth all year, and economists are forecasting that the jobs report for July, to be released on Friday, will be similarly disappointing.
“There are signs that hiring will pick up, as growth continues and as companies become more confident,” said John Ryding, chief economist at RDQ Economics. “Still, I don’t think it’s going to be an incredibly robust pickup that’s big enough to bring unemployment down sharply and put consumers’ minds at ease.”
Along with high unemployment, high debt levels continue to discourage consumer spending. American households, though borrowing less, still are paying for their free-spending ways in the credit bubble of the mid-2000s. Their debt levels are far higher than they were in the 1980s and 1990s, when they had less than a dollar of debt for every dollar in disposable income.
At the peak of the housing boom, consumers’ liabilities rose above 130 percent of their disposable income. That ratio has been falling ever since the financial crisis, and for the last year has averaged in the mid-120s, according to the Federal Reserve.
“Whatever happens with incomes, deleveraging is still the biggest constraint on spending,” said Ian Shepherdson, chief United States economist at High Frequency Economics. But he said “nobody knows where what the final stopping point for the household leverage rate is.”
Given the June spending data and reports of tumbling consumer confidence in July, many economists say a best case for consumer spending would be an annualized growth rate of 2 to 2.5 percent for the rest of this year. Spending rose at a rate of 1.6 percent in the second quarter and 1.9 percent in the first quarter.
“That’s better, but it’s still not the 4 percent growth we used to see back when the U.S. consumer was considered the engine of global growth,” said Paul Ashworth, senior United States economist at Capital Economics.
Source

TLC Cooking: 10 Meals That Are Proven to Make You Happier

Source
10 Meals That Are Proven to Make You Happier
by Alia Hoyt

• 1. Macaroni and Cheese
• The dairy products standard in this recipe (milk and cheese) contain high levels of vitamin B, which has been shown to heavily impact the brain.
• 2. Fish and Brown Rice
• Multiple studies have linked depression to imbalances in omega-3 fatty acids, found abundantly in fish [source: Melone].
• 3. Scrambled eggs and Oatmeal
• Remember those helpful B vitamins found in dairy products? Eggs are also rife with the critical substance.
• 4. Spaghetti with Meatballs
• We've already spelled out the benefits of whole-wheat pasta: It's high in folic acid and helps increase serotonin levels.
• 5. Mashed Potatoes and Turkey
• Turkey and mashed potatoes need not be reserved for Thanksgiving, thanks to the mood-boosting vitamins and minerals this main dish and savory starch contain.
• 6. Banana Split
• This is my favorite of the list. Yum! The two main components -- ice cream and bananas -- are both rich in B vitamins, which are effective depression-thwarters [source: Carper].
• 7. Chili and Cornbread
• Beans are a terrific vehicle for ingesting selenium and increasing levels of magnesium, a deficiency of which has been linked to depression [sources: Magee, Melone]. 
•   The perfect complement to this wintertime favorite is cornbread, which contains gluten, known for its ability to stimulate endorphin production [source: Cohen].
  
  
• 8. Sweet Potato
  
• Complex carbohydrates, such as sweet potatoes, are packed full of energy and mood-boosting vitamins and minerals.
  
• 9. Beef Stew with Veggies and Potatoes
• Lean red meat is an excellent source of tryptophan and protein, both of which are critical to mood regulation. Dial down the unhealthiness quotient by trimming any excess fat before putting the meat in the Dutch oven or slow cooker.
• 10. Anything Chocolate
• Multiple studies have revealed that chocolate (gasp!) is actually healthy in moderation. Although it's still high in calories, chocolate contains a myriad of beneficial nutrients that help regulate mood. The sugar that gives chocolate its rich taste helps increase serotonin levels, while the fat content releases mood-elevating endorphins [source: Carper].

Yum. I think I'm going to be putting these foods in my menus.

Michael Moore on the Sean Hannity Show

Michael Moore went on the Sean Hannity Show to discuss his new movie.
"I report, you decide."

Part 1:


Part 2:


Part 3:

South Bend intermediate student dies, concerns over swine flu

South Bend intermediate student dies, concerns over swine flu

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Raising Awareness Through Competition: South Bend Tribune

Raising awareness through competition

YWCA's 25th annual Run, Jane, Run stays strong despite economy.
To register, visit http://www.ywcasjc.org/ or call (574) 233-9491.
By KIRBY SPROULS
Tribune Staff Writer

SOUTH BEND — What was supposed to be a brief stop before lunch turned into a 25-year commitment for Sally Derengoski.

“I kind of fell into this by accident,” said Derengoski of her leadership role in Run, Jane, Run, the annual YWCA of St. Joseph County athletic competition for women.

The 25th event returns this weekend, with the run/walk Saturday at St. Patrick's County Park, the bicycling Sunday at Bendix Woods County Park and the golf tournament Monday at Morris Park Country Club. Over the years, Run, Jane, Run has raised almost $750,000 for the YWCA's domestic violence program, more than Derengoski could have imagined back in 1984.

That's when Derengoski, director of recreational sports at the University of Notre Dame, accepted a lunch invitation from then ND assistant athletic director Sharon Petro.

“She said we had to make one quick stop first,” Derengoski said.

That stop was the YWCA, where Derengoski found herself in a planning meeting for the first Run, Jane, Run with such folks as the late Dora Reynolds, then the executive director of the YWCA; Mikki Dobski, currently an assistant to South Bend Mayor Stephen Luecke; and Marzy Bauer, a South Bend resident active with charities.

Derengoski remembers the original purpose of Run, Jane, Run was twofold.

“First, we wanted to create an avenue in which women could participate in their own sporting events — where they wouldn't be first in the women's division. They would just be first.

“The second purpose was to raise funds for the YWCA.”

Over the years, she said, a third purpose evolved: To create awareness for the issues affecting women and children, and for the role played by the YWCA.
YWCA Executive Director Linda Baechle, in a news release, said Run, Jane, Run has “stayed true to that mission.”

She said the thousands of women who have participated have raised “critical funds to help women and children escape violent relationships and homes.”

Run, Jane, Run started big. The first year, women could participate in 10 events, ranging from tennis to equestrian. Later, it became a golf-only event until recent years when running then biking were added. Derengoski has remained the chair of the golf tourney throughout.

“One reason I've stayed with it is because I believe in the service that the YWCA offers our community. The second is purely selfish — it's nice to have our own women's golf tourney.”

She calls the golf outing “unofficially the largest women's charity golf tourney in the state.”

The tourney typically draws from 150 to 200 golfers. After playing at Juday Creek Golf Course the past dozen or so years, the event moves to Morris Park Country Club this year.

She said numbers remain strong despite the economy.

“I just want to thank this community for its support — the people and businesses have really stepped up,” Derengoski said.
________________________________________
Staff writer Kirby Sprouls: ksprouls@sbtinfo.com (574) 235-6233

How Can Individuals Break the Cycle of Povery?

Reverse Discrimination?

Why is always only ok to Discriminate against White people and Christians?
Imagine if it was the other way around. Imagine for a second, if they had decided not to promote anyone because only minorities passed the test. ACLU and Al Sharpton would be all over it, but since the only people that were discriminated against are white (and one Hispanic)...then it's no big deal. Right?

20 Somethings and Money

Do you ever hear financial advice and think, "Oh man, I wish I would have known this when I was younger." I know I have. In this video, Dave Ramsey takes calls from 20-somethings and gives them advice on money. It's a must see video if you are in your 20's now, will be in a few years, or you wish you were 20 again. :0)

Will Savers Destroy the Economy?

According to MSN Money, People that have stopped spending money and instead are saving could destroy the economy.

Read the story here.
Join the Discussion here.

City Not Participating in the Recession

Embedded video from CNN Video

Thrifty spending the newest style?

Source

Article published Feb 23, 2009

Thrifty spending the newest style?

Expert says consumers should save for future, spend smartly.

By KIM KILBRIDE Tribune Staff Writer

Terri Sibaja has come up with her own version of unemployment insurance: Shelves stocked with enough food to feed her family of three for the entire winter. Tucked away in a small room in the basement of her Cape Cod in Mishawaka is an unexpected storehouse of food.

Shelves spanning 15 feet across, from floor to ceiling, are packed full of canned soups and vegetables, dried beans, rice and pasta, flour, sugar and evaporated milk.

It's all about saving money, she said, taking advantage of sales and stockpiling during the warmer months when her husband, Jose, a painter, is busy.

Now, the family can eat almost exclusively from its reserve to make it through the cold-weather work slowdown and the recession. South Bend mom Tama Crisovan belongs to a cooking group that meets monthly to swap homemade frozen meals."

As the economy has tightened," she said, "rather than making six meatloaves (to exchange), we'll cook beans from scratch and bring six containers of chili."

It's hard to say how much money she's saved by the endeavor, she said."But, I don't have to have that pizza night where I spend $20," she said. "I have ready-to-go entrees in my freezer."

From scaling back on cable and Internet services to brown bagging it to work and cooking more meals at home, it seems everywhere you look these days, people are finding ways to cut corners. In some cases, folks who once were loyal donors to local Salvation Army thrift stores are now the customers.

From October of last year through January of this year, Maj. Timothy Best reported, sales at the Salvation Army's seven area thrift stores were up 12 percent to 15 percent."

Anecdotally," he said, "we're hearing people can't afford to shop elsewhere."

Goodwill of Michiana, which operates some 20 thrift stores, also reports an increase in sales since last fall.

Across the country, people are also saving more -- 3.6 percent of their income in December compared with negative numbers just months earlier -- because they're somewhat uncertain about the future and they're concerned they won't be able to draw on easy credit to finance major purchases.

Heck, even Oprah recently featured "The Thriftiest Family in America" on her show. It seems that frugality, once a term reserved for miserable misers, is now stylish. But, is what's good for families also good for the economy?A flip side to thrift?

Grant Black, an assistant professor of economics at Indiana University South Bend, explained what's known as "the paradox of thrift." There are two opposing schools of thought on whether spending or saving is best.

One view, he said, is that spending in the short run is good because it drives a lot of economic activity. More consumer spending leads to an increase in output among businesses and potential job growth.

On the other hand, Black said, savings allow financial institutions to loan money to businesses and individuals." This is important for longer-term growth," he said.

Can a healthy balance be struck between mindful spending and saving?" People need to be smart spenders," Black said. "It's not good to sustain high levels of debt."

That said, even during recessionary times, prices and interest rates can drop. Then, he said, "People can spend a little more or borrow a little more with lower prices and easier lending (terms.)"Will it last?

Will Americans who adopted newfound saving ways sustain them after the recession?"

It's unclear," Black said. "I think we're going to have to wait and see." Unlike their predecessors who lived through the Depression, he said, today's generation tends to have the view that everything will always turn out OK.

Sibaja, meanwhile, said she figured out a way to strike a balance between curtailing her family's spending on food this winter and enjoying an occasional meal out. She asked for gift cards to restaurants for the holidays.

"Some people think that's impersonal," she said, "but it didn't feel that way when we were (out at a restaurant) eating our steaks last week."

Asked about her new, in-vogue attitude about money, she laughed. "I don't feel sexy. It's just necessity that's caused me to use what we have instead of going out to shop.

"When the recession's over?

"Yes, since I'm on the 'Dave Ramsey Debt Diet,'" she said, "my miserly ways will continue."

Staff writer Kim Kilbride: kkilbride@sbtinfo.com (574) 247-7759

Inspiring 5 Year Old

Embedded video from CNN Video
If you can't see the video, go to CNN video and search for "Boy Asks for Food, not Toys."

3And he said: "I tell you the truth, unless you change and become like little children, you will never enter the kingdom of heaven.
Matthew 18:3

32"Do not be afraid, little flock, for your Father has been pleased to give you the kingdom. 33Sell your possessions and give to the poor. Provide purses for yourselves that will not wear out, a treasure in heaven that will not be exhausted, where no thief comes near and no moth destroys. 34For where your treasure is, there your heart will be also.
Luke 12:32-34

Obama Stimulus Package

According to Obama, "Our economy may never recovery if we don't pass THIS stimulus package, right now." I realize that some of these things are probably needed but do they need to be part of this package. How will they create jobs? Does it need to be so big? Is there a better way? I agree that we may never survive if we don't make the right decisions right now. It will probably recover, in time though. My question is...Is this plan, the right decision right now? Why is this package filled with so much pork projects that will not help the ecomony recover or create jobs? Why did Obama remove the "Buy American" part of the plan? Part of what got us out of the Great Depression was the war, because Americans got jobs creating war supplies with American materials. Now, all American manufacturing is outsourced to other countries. Other countries are now prospering when we go to war, because they are creating our materials. Anyone else see a problem?

I seem to remember Bush using the same scare tactics to get his Stimulus Package passed and the whole country was OUTRAGED because he was "scarying us and using fear tactics", but Obama use the same tactics and everything is ok. So we passed Bush's Stimulus and I haven't seen the Ecomony turn around from it yet. I guess he was wrong. But of course, Obama isn't going to be wrong too.

-Bridget

Highlights of Economic Recovery Plan

Spending

Energy

$32 billion: Funding for "smart electricity grid" to reduce waste
$20 billion +: Renewable energy tax cuts and a tax credit for research and development on energy-related work, and a multiyear extension of renewable energy production tax credit
$6 billion: Funding to weatherize modest-income homes

Science and Technology
$10 billion: Science facilities
$6 billion: High-speed Internet access for rural and underserved areas

Infrastructure
$32 billion: Transportation projects
$31 billion: Construction and repair of federal buildings and other public infrastructure
$19 billion: Water projects
$10 billion: Rail and mass transit projects

Education
$41 billion: Grants to local school districts
$79 billion: State fiscal relief to prevent cuts in state aid
$21 billion: School modernization

Health Care
$39 billion: Subsidies to health insurance for unemployed; providing coverage through Medicaid
$90 billion: Help to states with Medicaid
$20 billion: Modernization of health-information technology systems
$4 billion: Preventative care

Taxes
Individuals:

* $500 per worker, $1,000 per couple tax cut for two years, costing about $140 billion
* Greater access to the $1,000-per-child tax credit for the working poor

* Expansion of the earned-income tax credit to include families with three children
* A $2,500 college tuition tax credit
* Repeal of a requirement that a $7,500 first-time homebuyer tax credit be paid back over time

Businesses:
* An infusion of cash into money-losing companies by allowing them to claim tax credits on past profits dating back five years instead of two

* Bonus depreciation for businesses investing in new plants and equipment
* Doubling of the amount small businesses can write off for capital investments and new equipment purchases

* Allowing businesses to claim a tax credit for hiring disconnected youth and veterans
Source: Associated Press

A True Hero

Watch the Video Here

Read the stories here

This pilot showed an amazing amount of calm and saved every single one of his passengers. Wow! He even walked up and down the cockpit, while it was filling with water, just to make sure everyone got off. Then he called his library and apologized that he would not be able to return his library book because it was in the hull of the plane. The book's subject: Professional Ethics.

MSNBC Documentary: “A Father’s Promise"

‘As men, we feel we want to have pride’


Watch the Video Here
I thought this was an interesting discussion.

Mike Huckabee on Fox

Just in case you haven't been following the news, this is the story he is referring to in the video.

Pilot landed in Hudson to avoid 'catastrophic consequences'
Possible Bird Found in Engine of US Airways Jet

Watch the video of Mike Huckabees here

The best quote: He was reponding the question, "Why does God answer some prayers, but not others?"

"A finite mind can never fully comphrehend an infinite God and if God is so understandable that I can fully understand him, then He is not much of a God."
-Mike Huckabee

The above story could have turned out much different and much more tragic, but in the mist of an economic downturn and a preceived loss of hope, God decided to show His power.

Interesting Top News Story

On the eve of a Historic Presidential Inaugaration, this is these are the current Top Read Stories on:

Fox News.com: Clinically Depressed Poodle Mauls Former French President Chirac
What??? Clinically depressed Poodle??? Are you serious???

CNN.com:

This story is just sad. I have been following this story and it's just sad.

Obama Presidential Inauguration

I have to admit that the speech was a bit inspiring. He certaintly does have a way of instilling hope in people and probably why so many people blindly follow him. The speech did sound a bit like the same retoric he said in his election speeches though. It is truly a historic inauguration. I did not vote for Obama, but I wish him the best of luck. He has a big job in front of him, as would any President. With 2 wars, an economic crisis, and so much mis-trust of the government, he has alot on his plate. I pray that God gives him the wisdom to make the right decisions.

I actually watched the whole speech, but I couldn't post the whole thing.

Why Our Kids Will Never Have a Cell Phone

Link

Some kids are way to spoiled. Steve and I have decided that our kids will not get a cell phone until they have a job and can pay for it themselves. If they don't pay the bill, then they lose the cell phone.
If you feel your child NEEDS a cell phone, then why not get a plan that doesn't allow text messages and only allows calls during certain times and only allows a certain amount of minutes each month.

I remember surviving just fine as a kid without a cell phone.

Rick Warren on Economy, Obama, and Gay Marriage

Rick Warren on U.S. economy


Rick Warren on Obama


Rick Warren on gay marriage