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Newsletter: February, 2008 |
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Money Talk
 Dear Readers,
All around the nation, men and women are divided over many more issues than those they are in agreement on: politics and politicians, the war in Iraq, immigration, healthcare, education and numerous other social issues on which there are as many different viewpoints as there are citizens. However, in the past few weeks there has been growing consensus on one subject and that is the E-C-O-N-O-M-Y!
It’s taken us a very long time to get here. If we were to track the course from the early 90’s to today, it would tell a story of the 1990-1991 recession which lasted eight months and then of a strong economy which went into another eight month recession in 2001. Since then there have been years of growing employment and prosperity which led to out of control consumerism and a real estate boom that inevitably had to go bust.
As the housing market continues its downward spiral and as the mortgage market experiences escalating defaults there is a widespread impact into the manufacturing and service sectors and inexorably on unemployment and job growth. On a daily basis the economic news grows more and more dismal. With each economic report the hopes and the likelihood of avoiding another recession diminishes. There is every indication that this recession will last longer and be more severe than any of the previous economic downturns in the past two decades.
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Newsletter: January, 2008 |
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Money Talk
Dear Readers,
The U S economy is in trouble, and even those who have spent the past months and year refuting this reality are finally recognizing the futility of denying this unfortunate economic situation.
Consumer spending has finally begun to slow, and while this is bad for the economy, to me it is one of the very few good economic signs because growing personal consumption since the early 1990’s has caused record personal credit card debt and bankruptcies. My only wish is that the individuals and families in this country could have adjusted personal spending long before the economy began this decline.
High end stores such as Tiffany and Nordstrom, as well as middle range stores such as Target and JC Penney, are among those which experienced a distinct decline in sales in December. In addition customer satisfaction is at a 15 year low and foreclosures are at an all time high and the foundation for an economy at-risk for problems grows more obvious and more ominous. Interestingly enough, even though gas prices are as high as they've ever been, consumers have not cut back on their gasoline consumption. Instead, they are paying much more for gas and either cutting back in other areas of spending or increasing their debt.
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Newsletter: December, 2007 |
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"Peace comes from within. Do not seek it without" Buddha
Money Talk
Dear Readers,
As recently as two or three months ago, very few people were bandying about the “R” ( R-E-C-E-S-S-I-O-N) word, but for the past few weeks it has become almost a constant on most financial pages and websites. The times are definitely changing, but not for the better.
The criteria for a recession are analyzed historically, so to qualify as a recession the country has to experience a prolonged period of time (six months or so) during which the nation's economy is slowing down. Such a slow down would be characterized by:
* People buying less. * A decline in factory production. * Rising unemployment.
* Low or no growth in personal income. * An unhealthy/unstable stock market.
The consumer price index is the highest it has been in over two years and consumer confidence is the lowest it's been in an even longer period of time. Former Federal Reserve Chairman Alan Greenspan recently told NPR that the odds the U.S. will fall into a recession are "clearly rising," and he believes economic growth is "getting close to stall speed."
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Newsletter: October, 2007 |
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Winter is an etching, spring a watercolor, summer an oil painting and autumn a mosaic of them all. Stanley Horowitz
Money Talk
Dear Readers,
The roller coaster ride of the economic world over the past few months has left many Americans reeling. It is difficult to know what to expect in coming weeks and months as the opinions of financial experts may be rosy one day and filled with gloom and doom the next.
However, it is highly unlikely that good things are in store economically in this country in the forseeable future. The financial challenges facing so many Americans today are the result of a complex economic system that mercilessly allows men and women to end up living in poverty, with debt or without any assets.
This system is built upon an absence of financial education in our public schools and colleges, easy and often inappropriate access to credit (and a lifetime of debt - nurtured by solicitations on college campuses,) the high cost of higher education, a less than fair "Fair Credit Act," "Bankruptcy Reform," the high cost of healthcare, which reduces access to medical care, the subprime mortage market, predatory lending and numerous other components of an economic system built on a foundation of buyer beware.
The dearth of services available to those struggling with financial problems makes it difficult to overcome them but is no reason to avoid them. This all too common behavior, while actually understandable at times, is nonetheless a huge mistake which only increases their depth and duration.
At the Center for Financial Social Work our goal is to provide education, motivation and support for long-term behavioral change because until and unless behavior changes - NOTHING changes. We are here to help, so let us know what we can do for you.
As always, wishing increased assets and decreased debt to all of our readers.
Reeta
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