If the economy is so bad...

qdognjNovember 21, 2008

why in the world are there lines at electronic stores to buy the new Blackberry phone?...Rode past a Verizon store, and line was waiting for store to open...Perhaps the economy isn't as terrible as the media is portraying???...

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I do think that the economy is pretty bad, especially in certain industries & geographic areas. I know I've noticed a huge drop in the job postings on Monster, Careerbuilder, etc. in my city. But I also think that the media almost makes things worse by really scaring people. It seems that good economic news almost never makes headlines when it's happening, but the bad always does.

    Bookmark   November 21, 2008 at 12:17PM
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And in my job search, I'm regularly hearing "We've been told not to fill that job" even though it's posted on Monster, Careerbuilder etc. Maybe it'll be better for employment after the first of the year when new budget years are in effect, but for now it's awful. There is no confidence.

And I'll be bypassing that new Blackberry...which won't be a problem since I've successfully avoided the old version.

    Bookmark   November 21, 2008 at 12:49PM
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Taking a pragmatic view - those who have jobs, a steady retirement income, some discretionary funds, haven't hit the limits on their credit cards are still out there buying toys, electronics, groceries, clothing, stuff...

Other forums around GW are active with posters remodeling, redecorating, building, antiquing, mailordering expensive specimen plants, and the list goes on. And despite the anonymity of the internet - and people being able to portray themselves however they want, it seems the entire populace hasn't fallen into the "have not" category. But I concede measuring one to one doesn't give the same picture as the aggregate view; a long line at Verizon probably does not dismiss the idea of dismal holiday retail sales.

Here, we weren't hit so hard with the housing crisis, and I didn't notice much of a drop in traffic when gas topped out over $4. True, there have been job cuts and some people who were teetering on the margins are now slipping down. We're paying a little more for some goods and services and some levels of service have been diminished. Donations to chariries are off and the number of people needing the charities is up.

The economy is deemd to be bad right now and despite that, some are more affected by the "badness" than others. And the reasons for its effects on individuals cross all kinds of lines.

    Bookmark   November 21, 2008 at 12:56PM
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I don't see it here either. The stores are busy, restaurants are packed. We drove into Vegas a couple of weeks ago, and you sure wouldn't notice any lack of people spending money there. I'm sure it's bad for some, and in some areas but I do think the media is really running it into the ground, making people think it's worse than it really is.

Like I said tho...I'm sure there are lots of people in tight spots financially right now, I just don't see it too much here.

    Bookmark   November 21, 2008 at 1:20PM
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I agree with the above posts,don't "really" see a problem in my area either..Sure, there are some stores going under,ie,Linens and Things,Lane Furniture,Domain,Bombay, but there are many places that sell the same stuff, so i am not certain its the economy or lousy business plans viis-a-vie expansion,etc...

We happen to enjoy fine dining, and each weekend the high-end restaurants are packed..Even casual fast food joints like Olive Garden have waiting lines...A Trader Joe's just opened and the place has been jammed since the opening...The foot traffic at the Malls is still there,but maybe the dollars spent per visit has dropped...

    Bookmark   November 21, 2008 at 1:46PM
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The foot traffic at the Malls is still there,but maybe the dollars spent per visit has dropped...

You've hit on something there, I think. No facts and figures to cut and paste and have only casual observations, the papers and TV to go on - but I don't see the litany of "must haves" for holiday giving as in past years. Don't know how much farther prices can be slashed if people are holding back in wait for better deals starting on Black Friday and continuing through the holidays. Don't know if people who say they'll be cutting back really will cut back or will risk more credit card debt, will take advantage of layaway again, will rely on Toys for Tots, will go back to handcrafting, will...

Although a nice sized city, we never did have the Linens & Things, Trader Joes, Bombay Companies, or ever more than 3 Starbucks etc. like we had back East with more, more and more going in on any parcel of land zoned commercial - and I imagine going out of business just as fast.

I'd have to travel down to the Mall of Ameica if I needed a Macy's or Nordstrom's or Burberry's. I left the Maryland suburbs of DC a while back and already the flash in the pan "Discount Malls" that were cropping up everywhere were starting a rapid decline. There was an over saturation of everything there that could never be sustained even at the height of good times. It's one thing to get people in the door out of curiosity once; keeping them coming back is something else. Being somewhat in a position to judge - if even just for myself, this area's decent but not over the top access to shopping is almost better. No ability to overload on so much muchness.

I'm someone who couldn't be counted on to help kick start the economy anyway. My home is mortgage free, furnished, and decorated. My 2003 Camry was a cash purchase and, barring disaster, has years to go; have both a winter and summer outfit for funerals (elderly relatives and neighbors so you just never know); suitable attire for the symphony, dining out, working in the garden, hanging around the house or going out with friends, a small number of people to be involved with for any kind of gift giving. Economic times haven't forced my hand, just something arrived at rather naturally.

    Bookmark   November 21, 2008 at 4:27PM
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I don't think it has hit in some places - also it is Christmas and people typically spend at Christmas even though they shouldn't.

These things do have a trickledown effect.

I asked my daughter if she could see any difference in NYC and she said not too much. There is a place in NYC where you can go the night of a Broadway play and purchase the tickets that are left at really good prices. A friend of hers said when he went last week, there were a lot of really good seats still available - like orchestra seats for $60. Other than that, she said she really couldn't see it. New York has had so very many people laid off from the financial industry.

Truly it would be nice if the news is worse than the reality. Also, some store closings probably were just correcting bad business decisions.

I know a little town - 10K - Starbucks built a new building and opened. It stayed open about 3 weeks, I think. This is a town full of good people, but half are rednecks (I am one) but not a large percentage of latte drinkers and the other half are illegals - who are also not much on paying $5 a cup for coffee. Also, two coffee shops had already opened and closed. I'm thinking someone didn't do market research or didn't do a good job of market research there.

    Bookmark   November 21, 2008 at 10:20PM
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I think quite a few well-known names will disappear under the combination of spending cutbacks and tight credit. Sears/K-Mart is one that comes immediately to mind. The Millenium generation behind us Boomers will spend on things they enjoy, but I don't know a single one of them that would voluntarily walk into a Sears or a JCPenney. OTOH, they shop at Trader Joe's and Costco 2-3x a month.

I myself love to walk through Pier 1 or Crate and Barrel, but seldom buy anything from either store. In fact, I buy most things over the Net; haven't gone into a shopping mall in years.

Retailing is as overcrowded a sector as auto mfg. Too much overlap, too easy to compare prices over the Net to find better deals.

There is a whole new world of techno-driven consumers that will change the retailing environment drastically in the future. It's just a symptom of things to come that very few Milleniums have landlines, for example; they rely totally on cellphones.

One of my newest toys is the Asus 900 netbook PC, which I bought specifically for traveling, since my DH plans to retire in the next year or so. Took it on a recent trip to Seattle and it was a total kick to have! With almost every hotel offering free Wi-Fi, half our restaurant choices were sussed out on the Web via Zagat and Yelp reviews, located on Google maps, and driven to using a GPS with a minimum of bother. I love the Asus - slips into my everyday purse, fast and easy to use. Worth every penny, and there's not many things I can say that about, LOL.

Times are hard for those on the edge, and the slipping economy may well knock them down for a loop. It is far more difficult to declare bankruptcy these days, for example. And those who unwisely took out private student loan debt are truly stuck forever; such debt can NEVER be discharged.

For those who are more financially secure, the headlines may make you "hunker down" and be more cautious, but the effect will be minimal.

    Bookmark   November 21, 2008 at 11:47PM
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Well let's see. Not sure the economy is as bad as some say.

My wife purchased a new Blackberry Storm for herself tonight. It's actually a neat phone. Lot's of great features. Didn't cost much for the upgrade since we're already with Verizon. I may get one for myself. Of course it's a two week wait to get them shipped. The warehouse was empty by noon. Then we went out to dinner and the restaurant was full, no empty tables.

Our oldest son sells cars. He sold three yesterday. He has appointments for four more sales for Saturday. After a month of almost no sales, people are coming out to buy. People still need to purchase vehicles and I think they are finding out that the sky is not falling down.

From what I see in our area, it is not the doom and gloom that is being painted by the media. And this is Fairfield County we are talking about. An article in the paper today stated that banks are making loans for houses and cars. Granted it is not as easy as before. Credit is tight but things are moving forward, there is money to loan. You have to qualify. Novel concept!

Gas prices have dropped for a high of $4.49 in mid September to around $2.00 right now. And it doesn't seem as if we have hit the bottom of this one yet. This fact has certainly not hurt things. Fuel oil prices are heading for under $3.00 per gallon and that is good news for us. The weather has been January like and it's only November.

So I think the economy is not in great shape, but moving along at a slower pace. I would think our area would be affected more because of our proximity to NYC and the financial district. Doesn't seem so yet and we have a lot of Wall street people who live in Fairfield County. I also think people have changed their attitude towards pulling out the plastic. I see many more paying cash that usual. I figure that's a good sign too.

Enjoy the journey.
eal51 in western CT

    Bookmark   November 22, 2008 at 1:36AM
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Ditto what eal51 said about my corner of CT also. Restaurants are packed & it's difficult to find a parking spot. Tourists are still lined up in the middle of the street to get their pictures taken in front of Mystic Pizza. Our second Starbucks opened less than six months ago. We don't have national brand stores but our local, individually-owned stores are businesses as usual. Car license plates still reflect people are driving long distances to visit Mystic. Traffic through downtown seems lighter but pedestrians are carrying shopping bags. Talking with our local businesspeople they tell us that sales are down with folks buying less expensive merchandise but still buying. Our local hardware store (we don't have a box store) owner says the locals are still buying for home maintenance, winterizing projects but sales of discretionary merchandise such as leaf blowers, snow blowers, chain saws are almost non-existant.

DH says that his direct-lending program (cars) is dead in the water with runoff exceeding the pipeline. They are also on 'dealer watch' with several loan officers assigned to just patrolling about 300 dealers counting inventories, talking with salespeople, etc. They are looking for signs of imminent dealer failure and/or fraud. They've already had one dealer go bust due to floorplan fraud. He's been indicted & awaiting trial.

BKs are the highest they've been since the law changes & are accounting for about 85% of his entire portfolio delinquencies. All are Chapter 7.

Delinquecies for November are down from the previous six months but still 4-5 times 'normal' for the past decade. They've been working collections hard & it seems to be working. Lots of late pays but the payments are coming during the last ten days of the month. So, the portfolio is 'steady as she goes' at least for now. They've yet to lose a dime on the real estate portfolio. But, their average LTV is 60%...

Including all lending types...pipeline is down significantly with runoff exceeding production. It's not likely they'll met strategic goals for 2008.

Lots of funds coming into the bank. They are under no pressure to increase CD rates...people don't seem to care about rates...just deposit insurance. DH believes it's cashed out equity funds that people are depositing. Whatever it is...they can't push it back out the door fast enough because they're still declining almost 45% of applications due to either poor credit, lack of ability to make debt service, or a combination of both.

They are stress testing the portfolio virtually on a continuous basis since the first of the year. It's degrading with every run. As a result, they've called in LOC, reduced CC limits, shut off HELCOs, etc.

The talk at the donut shop on Saturday morning is all about the election & wealth destruction from equities. At our marina, there are zero winter projects like reupholstering, new equipment, etc. happening. Income at the marinas can't continue at these levels or we'll see lots of failures come spring.

At one of our hotels...a restaurant expansion is in process. Construction has been moving at a snail's pace for months & appears to have stopped entirely as of about 2 months ago? I know of zero new residential construction in town. It's not unusual to see residential listings over one year & counting. Prices dropped about 15% & haven't budged in months...just in a holding pattern.

Oh, since we're near the train station & frequently get stopped to wait for loading/unloading...the trains are still dropping off tourists in large numbers out of NYC & Boston. We'll have seasonal slow down after New Years. Next weekend is the annual Christmas Boat Parade with Santa arriving by tugboat. I expect the normal huge crowds & we're blowing town to avoid the masses.

We know two people who've lost jobs and another that's retired & forced to job hunt due to equity losses.


    Bookmark   November 22, 2008 at 7:54AM
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I posted previously to the effect "we don't see much hardship here" . Well they just announced on Fox news our bank , Downey savings & Loan, has been taken over by the FDIC. It's now US bank. I've never heard of them.

After checking online, it seems everything will remain the same for now. We shall see....

    Bookmark   November 22, 2008 at 10:32AM
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I wonder how much Boomer demographics will continue to wag the dog. Am I correct that their spending was largely responsible for feeding the bubbles? What happens as they age out of the workforce?

Few Boomers have saved anything. When they retire they won't have money to contribute to the economy. Taxpayers may be asked to contribute to them!

As duluthinbloom says, many of us already own our own homes and the consumer goods we require. Who is going to continue to feed our consumer-dependent economy?

More on topic: A friend recently passed through Milwaukee and said the air terminal was completely dead. We've cancelled a $5K cruise. Regardless what is observed in mall and restaurant traffic, retailers are posting awful numbers.

Perhaps some people are substituting less expensive outings for more expensive ones? (Dine out instead of take short vacation trip? Drive to a nearby attraction instead of flying to another?) My hairdresser plans a couple of short trips to water parks in Wisconsin with her DH and sons instead of their usual trip to Florida.

Could we be seeing some denial, where people ignore that they no longer can afford to do the expensive things they've *always* done?

    Bookmark   November 22, 2008 at 11:06AM
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As a Boomer and knowing many boomers, everyone i know HAS saved and Continues to save for retirement,so the comment "few Boomers have saved anything" is a bit off..

I agree about retailers posting bad numbers OVERALL, but i bet inside those stats you might see a disparity between one area of the country vs others..

And i can agree about substituting less expensive things for more expensive. I have stopped drinking Tanqueray Gin on monday thru wednesdays, i drink a less expensive gin, but return to Tanqueray on thursday thru sunday ;)

    Bookmark   November 22, 2008 at 11:32AM
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arizonarose: "U.S. Bancorp (NYSE: USB), with $247 billion in assets, is the parent company of USBank, the 6th largest commercial bank in the United States." I wouldn't worry.

Although I missed the start of the Boomer Generation (1946-1964) by a mere 11 days, I identify with the period. I still have one question - in what part of the country are Boomers now retiring in droves? Unless downsized or otherwise forced out, the vast majority seems more inclined to stay in the workforce. Regardless of the reasons - late start on saving, unforeseen crisis, recouping retirement account losses, adding to a future retirement cushion, paying for a lifestyle, or simply liking one's job - I still don't see the mass retirements as was so widely feared.

How great an impact does this have on newcomers to the workforce? Must be huge competing for fewer and fewer jobs. I'm thankful (and not just because Thanksgiving is looming) that all of that is behind me.

    Bookmark   November 22, 2008 at 2:41PM
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We are pre-boomer/pre war - but I don't see many people my age actually retiring - as in stopping work. Many are retiring from a lifetime job, drawing SS, but working somewhere. I don't know that it's money or lack of savings, but more a lifestyle choice.

Personally, my husband works, maybe not as much, but our income hasn't changed.

I always thought the fear about the boomers was the shock to the SS system when they go on line.

It would be nice if the gloom and doom were not real - I hope it isn't. But 'keeping up appearances' may be part of it. Also, Christmas has never been a time of reasonableness in spending.

The fact is, really bad or only somewhat bad, there is going to have to be a correction in the way some people operate.

Personally, I'm a little upset that we are expected to bail out people who bought $300K homes 'because we can make the payment' - but now can't.

I think we should let them back up and punt and work out their own problems. Keeping the price of real estate at an unrealistic level is not a good thing for the economy - for those who are footing the bill - or for those who want to purchase homes in the future.

My hope is that it is just bad enough to make people take notice and change their ways - but not horrendous.

    Bookmark   November 22, 2008 at 3:05PM
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There was a lot of talk in the late '80's and '90's about Boomers retiring early, and a modest percentage were able to take advantage of their stock options selling at a good time, to do so. I know some who took a year or two off, then went back to work. A number of the execs I used to support at one of the Big Consulting Firms have retired at age 50 or gone into new lines of work they find very exciting; they have, even with the downturn in the market, multi-million $$$ portfolios.

One problem with Boomers retiring early is that many were shocked to find out how much healthcare insurance actually costs, when the employer isn't picking up 90% of the cost. Many couples are like us - I retired early, my DH kept working until he reached the threshold of retirement medical benefits (have to be at least age 55). He reached that age this year, so he can now plan to retire in 2009 or 2010, depending on how long the company can keep funding his Homeland Security database project he was hired to do.

Statistically, one quarter of the Boomers haven't saved anything worthwhile (less than $50K). One quarter have saved over $250K. The rest fall in the middle...kinda like life overall, LOL.

Interesting article in the November 17th Forbes, with a chart called "cash on the sidelines". The breakdown is as follows:

$304 billion in Treasury securities
$1.411 billion in Money Market accounts
$6,049 billion in Bank deposits (includes CDs)

Total: $7.8 trillion of cash, securities and Treasury bills/bonds.

    Bookmark   November 22, 2008 at 4:44PM
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gdognj -- See what I mean? Three-quarters of Boomers have less than $250K stashed away. How many years can you live on SS plus just that? Ten, fifteen years IF you don't need some pricey medical assistance for daily living?

Well and good to claim you will continue to work but...who will employ you at the level you've achieved and for how long? How long will you be healthy enough to work steadily?

I don't even want to think about people coming up after the Boomers who can't get good jobs in the first place, from which to draw savings for *their* retirements.

Oooh! How 'bout we liquidate the hard cash savings jkom's post reports? Why, we could pay off the National Debt! LOL! (Not funny, eh?)

I don't know why anybody wants to be President today.

FWIW, my parents had just moved into their new home with Baby Sue a few months before Pearl Harbor. I remember ration books and saving grease and my mom toiling in a Victory Garden. I remember my uncles in uniforms; my dad was in a war-effort job.

    Bookmark   November 23, 2008 at 5:58PM
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chisue, you can't say that 75% have saved less then 250k without the corresponding statistic of how much they currently earn...If they have income of 50k per year,then they would need less then someone earning 150k...It all depends on what "retirement" means to each individual..Does it mean traveling to the Greek Islands? Or does it mean relaxing on your front porch sipping a domestic beer?...
The whole concept of "retirement" goals ,in my opinion,is a bunch of garbage perpetuated by those who have a vested interest in having you shovel boatloads of cash into their investment accounts,or paying for their "insight" of how to plan for your future..You will actually need MUCH less then the experts tell you..Live for today, and keep an eye on tommorrow!!!!

    Bookmark   November 23, 2008 at 7:11PM
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And remember that most folks' wealth is tied up in their houses. Even assuming house prices have fallen 25-50%, there is still some equity left to tap. More than a quarter of homeowners have no mortgage debt at all.

Interesting stat in our local paper - 1 of every 2 house sales in CA is a foreclosure sale. This is a promising trend towards getting inventory reduced and restoring base values.

qdogni has a valid point about individual income. $50K will certainly take you further in Tulsa OK or Kansas City MO than it will in NYC or San Francisco.

    Bookmark   November 23, 2008 at 8:16PM
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Figure out what is about to happen as GM, Ford and Chrysler fail due to a lack of understanding or reacting to the market. These are companies who decided decades ago that whatever they brought out would be accepted/bought buy the public, and that changed in about 1980, and those companies have not changed. They assumed that "buy american" would somehow save them, and continued to produce vehicles that the majority of americans didn't and won't buy.

GM going down will affect tens of thousands directly and many many more indirectly... the places those people shop and go out to eat, etc. I am NOT advocating any kind of bailout, I just think the fact that people are still at the mall in your community doesn't mean things are OK.

Shop as usual... and avoid panic buying.

And be glad that GWB didn't privatize Social Security just yet.

    Bookmark   November 24, 2008 at 1:14AM
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Michigan has been in a recession like economy for about the last 10 years,throwing a bailout package at the Auto Industry will NOT solve that fact,perhaps a chapter 10 with government assistance on the reemerging from BK is more appropriate

    Bookmark   November 24, 2008 at 7:56AM
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We are retired. Many of our friends are, too. Personal experience (and stats) tell me that people do not spend much less in retirement. That 'lowered cost of living' is largely a myth. 'Young' retirees actually have more leisure in which to spend! (And they are often helping to support their own elders or children.) As they age further they have more medical expenses. The 'old old' have even greater medical expenses, sometimes including custodial care.

The Chicago Tribune just ran an op-ed piece warning of huge expenses for long term care for Boomers with little-to-no savings. It urged allocating funds for a Medicare/Medicaid 'fix' for the problem.

If three-quarters of Boomers have saved less than $250K, let's hope they are the younger ones. They still have time to add to the kitty. I don't know if 'savings' as reported included all assets, like home equity. Wouldn't there be a greater glut of homes for sale for less if many Boomers *have* to sell?

The cost of living is lower in some areas. The poverty levels vary for that reason. Won't retired Boomers with little savings rapidly fall below the established poverty rate wherever they are...and need aid?

    Bookmark   November 24, 2008 at 10:29AM
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>>if 'savings' as reported included all assets, like home equityTo answer that, no, home equity is NOT included. Those figures, BTW, were from the Federal Reserve - I forgot to add that to the end.

In Jane Gross' blog in the NYTimes, she raises many interesting issues about growing old in America. These were problems she faced when trying to care for her elderly mother for several years. The blog is called "The New Old Age" and I recommend it highly.

The latest blog today talked about the legal issue of Filial Responsibility laws, and what might happen if states who have these laws (there's 30 of them in the US) actually started enforcing it. Big legal messes are forecast, not surprisingly. It should be interesting to watch this legal development, the conservative thinktanks seem pretty hot for the idea.

We bought LTC policies when we were in our late 40's, which turned out to be a spectacular piece of good timing as my DH suffered a stroke less than five years later. He wouldn't even be eligible any longer. Will the policy pay off? The odds seem fairly good, it's overseen by the State PERS system which puts a lot of economic muscle behind the policyholders.

I know that some folks here have argued paying off one's house is a waste of money when any excess funds could be invested instead in equity-indexed insurance policies - these are tax-advantaged over annuities. Still, paying off the house has worked well for us; it was amazing what a difference it made in our monthly budgets!

    Bookmark   November 24, 2008 at 7:27PM
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ChiSue wrote: "Few Boomers have saved anything."

I'd be interested in the actual stats on this. Speaking as a Boomer who is friends with and works with lots of Boomers, I know relatively few who haven't saved anything. In fact, most of us are currently bemoaning what the stock market crash is doing to our 401k balances, with people reporting paper losses in six figures.

    Bookmark   November 24, 2008 at 9:06PM
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I don't see the slow down at all in my area (Central TX).

- My local Cabela's is packed every time I drive by.

- I have a friend who is the art director at a screen printing shop and she says they are busier than ever. I figure if people/business are buying t-shirts, they aren't doing too bad.

- I do work for auto dealers and they are experiencing just the regular holiday slow-down. Some dealers are selling like crazy.

- Just on my street alone, I have four neighbors doing major landscape work. Not basic stuff that the HOA requires but huge projects. Also a couple of swimming pools are under construction within my neighborhood.

Still, I've taken to hoarding money because I'm self-employed and, in my head, feel financially vulnerable.

    Bookmark   November 25, 2008 at 9:58AM
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"Speaking as a Boomer who is friends with and works with lots of Boomers, I know relatively few who haven't saved anything. In fact, most of us are currently bemoaning what the stock market crash is doing to our 401k balances, with people reporting paper losses in six figures."

Ditto that!

    Bookmark   November 25, 2008 at 10:49AM
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tishtoshnm Zone 6/NM

Granted, all of this is anecdotal saying all the people I know have saved, etc. I can also put in some anecdotal as well. I am not a boomer but my mother is. At 50, she has nothing saved. They will most likely refinance their home when they can and that means she will likely have a mortgage for 30 years. Her husband might inherit money but that is not a given. She is sick, she has a connective tissue disorder but still continues to work and will likely always need to work until the day comes that she moves in with me.

    Bookmark   November 25, 2008 at 12:58PM
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"Speaking as a Boomer who is friends with and works with lots of Boomers, I know relatively few who haven't saved anything. In fact, most of us are currently bemoaning what the stock market crash is doing to our 401k balances, with people reporting paper losses in six figures."

More news about pensions.

While I'm glad The 2006 Pension Protection Act (PPA), (effective this year), requires corporate pension funds to be fully funded by the end of 2008, I don't think its fair that once a corporate defined-benefit plan falls to between 60 percent to 80 percent funding, retiree lump-sum benefits can be restricted to 50 percent of payouts due retirees.

Links that might be useful:

Traditional pensions: Are they at risk?
Many defined-benefit plans are underfunded.
Here's how to keep track of your benefits.
November 17, 2008


Tap into Americas best pension plans
By Liz Pulliam Weston


    Bookmark   November 25, 2008 at 2:26PM
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"While I'm glad The 2006 Pension Protection Act (PPA), (effective this year), requires corporate pension funds to be fully funded by the end of 2008, I don't think its fair that once a corporate defined-benefit plan falls to between 60 percent to 80 percent funding, retiree lump-sum benefits can be restricted to 50 percent of payouts due retirees. "

Actually, plans have 7 years to "fully fund".

And monthly payments are not restricted, it's just the large lump sum payments, and not many plans even offer this payment form.

One of my clients has a pension plan where everybody takes the lump sum. One guy is coming up for retirement and if he takes a lump sum, that will deplete 75% of the trust! Therefore, he cannot take that money out and weaken the plan.

Also, don't confuse defined benefit plans with 401(k)s. Not the same.

    Bookmark   November 25, 2008 at 3:20PM
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mary_md7 -- Read the above posts in this thread by jkom51. She cites the Federal Reserve as saying a quarter of Boomers have saved less than $50K, and that the top quarter have saved more than $250K. So, of Boomers as a whole (as young as 44 and as old as 62), three quarters have saved less than $250K.

I'm hoping younger Boomers, who still have years before retirement -- maybe more years than they counted on -- will want and be able to save, and that Boomers of all ages with market investments will recoup in time for them to retire. I also think I'm dreaming.

    Bookmark   November 25, 2008 at 5:46PM
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Just a minor correction on my postings, to keep the record straight:

The Cash/Treasuries stats in my Nov 22nd posting are from the Federal Reserve.

However, the percentages on Boomer retirement savings are from AARP.

    Bookmark   November 25, 2008 at 7:21PM
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My daughter coaches persons suffering recent layoff.

Major recent and ongoing increase in their clientele.

I asked her if they were hiring ... could they use a good counsellor??

They're not allowed to ask age, are they? Almost everyone says that I don't look anywhere near 80.

ole joyful

    Bookmark   November 26, 2008 at 12:18AM
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My husband is a doctor and has decided he will retire when they carry him out in a body bag. He's 76. Works every day and loves what he does. Doesn't understand the concept of retirement and thinks it would kill him. I'm 18 yrs younger (boomer), we've saved all these years and lost almost half with the crash. Will we recoup in time to use it? Doubt it. Doesn't matter if you saved or not.

    Bookmark   November 26, 2008 at 12:18AM
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Ah, my 2cents worth, which is about all I can put in right now.
One thing not mentioned much about is all the IOU's the government has allowed in the Social Security pot.

As for savings, we are Boomers, born near the beginning of the said range. Our savings have been depleted more than once due to the economics of the 80's and 90's and of course now this crash. Manufacturing jobs downsized, and went out of business, and inflation hit hard.

Now we find his workplace is going to close and we are a little young for SS benefits. We live in a small town and there will not be any jobs, even part time ones.

We are fortunate in that looking toward retirement, we have paid off our house and have driven our cars for several years. (Mine is a '90, his a 99.) We also don't carry a balance on credit cards. We have always bought what we need or use, but not toys or gotta have items that others seem to crave. DH brown bags his lunch as he has for 30+ years.

Anyway, I just wanted to add that sometimes it isn't because one didn't save, but that due to economics savings were not possible or depleted.


    Bookmark   November 26, 2008 at 3:38PM
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Greetings calirose/Rhonda.

I am saddened to hear of the bind that you are in.

It seems that many of us are inclined to blame people caught in a number of difficulties for their problems, as though they caused them.

But many, through no fault of their own, have suffered layoffs ... and, as you say, reduction in value of their assets ... which they had invested into stocks of various companies, trying to make our countries more productive: keeping people working.

(While writing this, I shifted from, "they" to "we" on some occasions - for many of us have been involved in similar circumstances.)

I hope that you are able to find some wiggle room, and work your way through the various issues in a way that works well for you, later.

Maybe you've seen my message about my evaluation of my asset base when I was 70 - as feeling it necessary to fund to age 100 ... 6 blocks of 5 years each.

Due to the part of the asset that I spend now being no longer available to earn investment income ... also due to inflation eroding part of the purchasing power of each of those dollars annually ... and probably needing a larger fund near the end, to fund retirement/nursing home care ... I thought that I'd better plan to spread the spending of the first block of funds over 10 years, instead of 5.

Which would carry my plan/hope to leave just below 85% of my asset to be still in my hands after 10 years ... and statistics show that funds invested in equities have almost always made money, over 10 year periods.

Now, nearing 80, and living frugally, entirely by choice, I am living within my pension income ... so have spent next to none of my invested asset ... which was about 80% of my total asset ... a few months ago: it's a somewhat lower percentage, now!

And I'm comfortable with that, as I don't exect to need to sell any of it, soon. Which will give almost all of it time to recover at least part of its former value ... which was much larger than would have been produced by a "guaranteed dollars" style of use for a major part of my total investment ... plus ... it mostly carries a triple tax advantage, in this system. While I like that latter proviso - it is not by any means the major reason for my investing plan being as it is: it's merely a welcome side-effect.

Also ... the proof of the pudding being in the eating ... I'm rather surprised at how little anxiety the recent radical market drop has engendered in my psyche. Some are claiming that it has now become worse than that in 1929.

I wonder the reason(s)?

I grew up on a farm, during World War II: farmers get used to varying and unexpected business circumstances, to seasonal and varying income levels, etc.

Just before the end of the Korean War, I asked my liberal Protestant church for appointment as a missionary/resettlement worker helping refugees get back on their feet there ... and when major war sweeps over most of your country, four times ... no one needs to explain "trouble" to you.

Can you imagine what it would be like ... to walk away from your current life, with nothing but your clothes on your back (and the skills in your brain) ... to start life anew, somewhere else? Often, where life is difficult in your new society.

Also, I think that I have a fairly optimistic outlook on life, perhaps partly from within me, but I think partly because of my trust that this is, despite its troubles, God's world, and I feel at home in it.

While I can be a citizen of only one coutry (my kids, whose Mom was from Iowa, have dual citizenship), I feel that I must have regard for the world as a whole, and its citizens. If/when I pray, "God, bless Canada" as U.S. people do regarding their country ... right away after that I feel constrained to add, " ... and bless the other parts ('countries') of the world, as well, and the people who live there". In church on most Sundays, included with announcements, or causes for prayer, is one asking that we pray for usually three or so countries of the world.

With reference to that word "country" above - I see that term, and the reality behind it, as a human construct, not something set in place by God.

It seems to me that God looks at the world differently than we do!!!

Can you imagine how disgusted S/He must be at the multiple ways that we've messed it up? And all of that raping/torturing/killing one another!!!

Good wishes to you and your family as you chart your course through these uncertain times.

ole joyful

    Bookmark   November 28, 2008 at 11:30PM
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This is true here in western PA...


Here is a link that might be useful: today's

    Bookmark   November 29, 2008 at 11:16AM
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Ole Joyful, you are indeed joyful. I have read many of your posts. And thank you for your good wishes.

I posted more to show how economics effect people more than to post our situation. However, we are concerned, but not worried. While our position is unclear, we do have some available funds in CD's, as we look for new opportunities, perhaps e-lancing? And we are hoping that the 401k will recover enough to last through our older years.


    Bookmark   November 30, 2008 at 2:09PM
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Yes, we had to back up and punt due to the changes in this country in the 80's and 90's as well.

Then again just a few years ago due to medical expenses of a family member.

We are doing OK now, but I realize many aren't and I am concerned for them. There are many vulnerable people in this country - children, sick, aged.

My husband and I were very fortunate in that we have lived in what are some, I believe, of the best years (so far) of this country's history. For that I am grateful.

I realize countries or nations, are man made. God's blessings are one thing - the blessings of our nation is quite another. We have been fortunate in that we have enjoyed both in our lives. That doesn't mean we have both ever been wealthy or had a really easy life. It just means we have always had opportunities to provide for ourselves and our children. I just want the same for my children and grandchildren - and on.

    Bookmark   December 1, 2008 at 1:32AM
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I have had the same reaction about the media hype. This media-hype thing first struck me about 15 years ago:

Does anyone remember the Timothy Mcveigh explosion in Oklahoma?

Do you remember the subsequent 6 months when the media was going crazy over militias?
"Is there a militia in YOUR BACKYARD???? Stay tuned!"

You would have thought that militias were bringing our nation down... that they were the biggest problem of all time.

In fact, they never were a problem and haven't been a problem since then, either.

Further, Timothy was kicked out of the only militia he tried to enter.

So I wonder if the financial crisis ... which I am of the belief does exist!... is being worsened by the media.

It is a hot topic, so the media folk look for the greatest possible "hype" story regarding the economy.

Then again, maybe all this hype is a good thing. Perhaps it will push American's back in the world of adult economic behavior instead of spending like a teenager with a first paycheck.

If our economy was truly surging/growing due to the growing debt/credit habits of the citizens, then I submit that our economy wasn't truly "surging" in the first place. It was an illusion.

We may have to endure some pain as we retract back to our proper economic status.

As for myself, I am hoping that the only place I see the economic "crisis" is on the TV news and not in my own home!


    Bookmark   December 1, 2008 at 8:42AM
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The Defense Department thinks terrorists will strike within the USA. There's one 4700-man unit at Ft. Stewart, GA, ready as of Oct. 1 to respond to a domestic attack. The Pentagon plans to have a total of 20,000 trained by 2011. This is in addition to 80 smaller National Guard units (about 6000 troops).

There are critics of this plan within and outside of the military -- including civil liberties groups. This new homeland security push threatens to strain the military while undermining the Posse Comitatus Act, a 130-year old federal law restricting the military's role in domestic law enforcement.

The stated purpose is for these groups to respond to domestic chemical, biological, radiological, nuclear or high-yield explosive attacks. The thinking is that civilian authorities would be overwhelmed in catastrophies.

Information gleaned from a Washington Post article published in the Chicago Tribune Dec. 1.

Heaven help us if this homeland security thrust is anything like FEEMA. The low threshold for military enlistees also comes to mind, but...what to do?

    Bookmark   December 1, 2008 at 11:35AM
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Pursuant to chisue's post, this today in the NYTimes (excerpt):

Panel Fears Use of Unconventional Weapon
December 1, 2008 NYTimes

WASHINGTON An independent commission has concluded that terrorists will most likely carry out an attack with biological, nuclear or other unconventional weapons somewhere in the world in the next five years unless the United States and its allies act urgently to prevent that.

In a report to be released this week, the Congressionally mandated panel found that with countries like Iran and North Korea pursuing nuclear weapons programs, and with the risk of poorly secured biological pathogens growing, unconventional threats are fast outpacing the defenses arrayed to confront them.

"AmericaÂs margin of safety is shrinking, not growing," the bipartisan panel concluded.

Prepared before last weekÂs deadly terrorist attacks in Mumbai  which American officials say were most likely carried out by Pakistani militant groups based in Kashmir  the report also singled out Pakistan as a top security priority for the coming Obama administration.

"Were one to map terrorism and weapons of mass destruction today, all roads would intersect in Pakistan," the report states, citing the countryÂs terrorist haven along the border with Afghanistan and its tense relations with nuclear rival India.

"Pakistan is an ally, but there is a grave danger it could also be an unwitting source of a terrorist attack on the United States  possibly with weapons of mass destruction," the report said.

The report is the result of a six-month study by the Commission on the Prevention of Weapons of Mass Destruction Proliferation and Terrorism, which Congress created last spring in keeping with one of the recommendations of the 9/11 Commission.

The nine-member panel received classified briefings, conducted several site visits, including meetings in Russia, and interviewed more than 250 government and independent experts in several countries.

The panelÂs 13 recommendations focus on fighting the threat of bioterrorism, including improved bioforensic capabilities, and strengthening international organizations, like the International Atomic Energy Agency, to address the nuclear threat. It also calls for a comprehensive approach for dealing with Pakistan.

    Bookmark   December 1, 2008 at 11:40AM
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I love the quote about Pakistan being an ally. HAH!

    Bookmark   December 2, 2008 at 11:42AM
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I'm looking for a job (still employed, but company isn't doing too well). I have noticed a change lately in the online job postings. There aren't nearly as many on Monster, etc. I've been doing some networking & my contacts tell me that while a lot of places want to hire, they have a freeze on right now.

Our mall was pretty crowded last Fri. & people were carrying quite a few packages. Most restaurants here seem to have quite a few cars outside & when we do go out, their business seems about the same. We've had a few restaurants to close, but we had a very large number to begin with. Our local coffee shop, which is like a local version of Starbucks, says they're still doing well. I do know a few people who have been laid off, but not many. One of our friends said he actually wasn't surprised by being laid off because the company was badly managed.

    Bookmark   December 4, 2008 at 10:03AM
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I think that the headlines make things sound really bad. This morning's was "ATT cutting 12,000 jobs due to economy". It sounds really bad when that many layoffs are announced at one time. But these people were hired and there was no headline about that. When is the last time you saw a headline that said, "Company X hired 12,000 people over the past year"?

    Bookmark   December 4, 2008 at 10:07AM
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I take the local economic pulse at the hair salon. They have male and female customers.

My hairdresser says her regular customers are cutting back on visits. Everybody is delaying cuts. Some are delaying coloring. Women who used to come for a blow-dry twice a week now come once a week. Weekly customers stretch out their visits. The shop is selling fewer salon beauty products. They've had to raise prices a tad.

She's a resource in other ways because her DH is a head-hunter and her parents own restaurants. His $100M company is closing offices. Her parents are cutting employees and hours and adding cheaper entrees.

This couple (with two young kids) has a relatively new home in a subdivision. They and some of her relatives had planned to build larger home on land they own. That's on hold for all of them. One of the builders they'd talked to has folded.

I'm 30 miles north of Chicago.

    Bookmark   December 4, 2008 at 12:33PM
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chisue, i always like to hear 1st hand observations..However,lol, perhaps delaying cuts,going only once per week is really getting back to the norm? Maybe,when people "felt" more comfortable in their financial positions,they started going MORE often? When people STOP getting haircuts/color/etc or her regulars don't show up at all, then i think that would be more troublesome..
There is no doubt the economy is slowing,some areas worse then others,but stretching my haircut 1 week or eating striped sea bass instead of the lobster special doesn't mean i am broke,just more diligent :)

    Bookmark   December 4, 2008 at 1:03PM
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yes, what kittiemom said. You never hear or read any GOOD news. Just the bad stuff! I don't even listen to them any more, and skip over it in the newspapers. I think it's getting way over done.

Since gas prices have dropped we have more $ in our pockets ...lets hear about that.

    Bookmark   December 4, 2008 at 9:11PM
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It is said that the difference between "a recession and a depression" is whether one is employed.

Avoiding the "bad" news is not being realistic IMO. Avoiding the news is what has kept many from contacting their congress, which is why Congress has gotten out of control. I don't think one should have the news on 24/7, but one should be aware of what is happening. Local news tends to report new hires or new plants/restaurants,etc. and national tv will report it if it occurs in larger companies. There won't be much of that with the economy in its current state.

Gas prices have dropped. Grocery prices have increased up to 30%. Taxes whether IRS, state or local, property, sales taxes are going to increase because with fewer people working, there will be a decrease in tax income.

There have been 533,000 jobs lost In November alone. http://www.cnn.com/ -the most jobs lost in 34 years. That brings the total loss during 2008 alone to 1.9 million.

    Bookmark   December 5, 2008 at 10:15AM
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No, there is no way to avoid the bad news & everyone should be realistic about the fact that there are real problems with the economy. I've just noticed that the media is so dramatic about reporting bad news. That is any bad news, not just about the economy. They seem to be much more matter-of-fact about good news.

There is no doubt that the economy nationwide is in bad shape. Here, I've noticed some differences. Homes are still selling & builders are still building, but not at nearly as fast a pace as 1-2 years ago. My company has laid off quite a few people over the past year, although we were somewhat overstaffed to begin with. There haven't been any massive layoffs here, but there have been small cuts by some companies. There is a definite difference in job postings. I'm looking for another job because I know my company is in bad shape (not just because of the current economy). There aren't nearly as many jobs posted as there were even a couple of months ago. I've been networking a lot & several of my contacts have told me that companies want & need to hire but there are hiring freezes on at many places. Our local unemployment rate, which was 3.8% a year ago, has gone up to 6.7%. The parking lots at restaurants remain fairly full. The mall was pretty crowed on Black Friday & many people were buying. Some stores have closed, but others have mostly taken their place. Also some stores are expanding into larger spaces. DH & my retirement accounts have taken a scary hit, though.

The employment picture really scares me. I don't know how much longer my company will be in business & I'd like to find something before I'm forced into looking. I had my 3rd interview yesterday for a job I really want, so I'm hoping that will come through. I know at least one place that would like to hire me but they don't want to add anyone to their payroll right now.

    Bookmark   December 5, 2008 at 11:52AM
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gdognj -- No, the cutbacks in spending are not 'getting back to the norm'. The 'norm' here includes things like a Polo Ball (cut this summer) and other splashy benefits. The high school parking lot is filled with Mercedes and BMW cars.

If a regular customer at a salon stopped showing up for cuts and color it would mean she'd moved or found another salon. One cannot appear in public *unkempt*, even if one is not employed. (What would people say!) It seems to me that these little expenses that keep up a public image are among the last to be cut.

    Bookmark   December 5, 2008 at 2:03PM
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The New Depression of 2007/2008 currently shows its effects geographically (depending on what kind of companies are dominant in a region, eg auto in MI) & via class lines...
Same as in the 1930s, under Hoover...
The great losses in the middle classes in the USA aince the 1970s, will make it tougher to successfully pass through these tough times, since there are fewer cushions & generous people available...
With few honorable exceptions, the rich give charity from their surplus funds, the middle & working classes take people right into their homes...
Just look at how the Asian depression of the 1990s affected the people of those lands... Only the wealthy didn't loose much in the long run & were the fastest in bouncing back.

    Bookmark   December 9, 2008 at 9:20PM
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Recently, here in the Midwest, the news ran a spot that stated the amount of sales for diamond jewelry has actually increased during the recession. When asked, diamond jewelry consumers said they were purchasing because they felt depressed over the economy and saving up for high-end jewelry made them feel better. Think about THAT one!

    Bookmark   December 10, 2008 at 10:54AM
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The shopping malls were packed yesterday when I went with my daughter. And I suppose if you saw me you would have thought I had no money worries because I bought my daughter some new clothes at Nordstrom (which surprisingly has affordable tasteful dresses an 11 year old can wear). But I am not at all comfortable with the economy.

The state of Maryland has called for employee furloughs. At first we (at a Maryland state university) were told that Dec 26 and Jan 2 were two furlough days. Now, we're told that Dec 26 will NOT be a furlough day but that all employees will be furloughed for a minimum of two days (those earning over $40,000 will have additional furlough days). I think I'll be furloughed for 5 days.

For me personally, the furlough will have an effect but it won't be too bad. However I talked with the clearning staff and even two days of no pay is tough. They are worried about the furloughs and when they will happen - luckily not before the end of the year - and how they will deal with the loss of income. OTOH, everyone is thankful that there is no talk of RIFs (reduction in force) that occurred in the early 90s.

So while you may not see an economic downturn, it exists. It just doesn't seem to be hitting everyone equally and many times it hits the lower income much harder than the affluent.

    Bookmark   December 14, 2008 at 5:20PM
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We are in NYC this week and I thought I might get a feeling about the economy here. It was hit pretty badly by the financial fall, but since I really don't know what it was like before, there is no way I can make a judgement.

I don't know what I expected, black crepe on Wall Street ---

I did see one pizza place with a written notice outside reading 'Recession Special - Large Cheese Pizza $______'
That may have been some odd humor.

The busses are still full, the subway is crowded, and streets are full of taxis.

    Bookmark   December 15, 2008 at 1:55AM
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I have to admit the diamond comment surprised me. Not that people were buying diamonds necessarily, but the reason that it "made them feel better". Now one may have heard that diamonds are a good investment, but have you ever tried to sell one? Diamonds are only good for trade in on larger diamonds! At least if you want a decent sum for it.

Ladytexan, I would think that with all the glitz and amazing window displays lots of people would be out. What is difficult to see is what they are or are not buying.

    Bookmark   December 15, 2008 at 4:34PM
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NYC with a population of over 8 million - and since most tourists visit Manhattan vs the other borroughs - all those people "gotta be somewhere" on any given day.

It's like that here with a pop. just shy of 100,000. The streets, restaurants, stores, malls are filled with people. What exactly they're doing and how much they're spending doing it is a mystery.

What we hear about most now - and because it's so much more acute over the holidays - is a decline in charitable donations or rather an increase in the number of people needing help from the same charitable pools. What's the answer with most of the country feeling a pinch in one way or another? Any sense there might be charity fatigue or just being overwhelmed by sheer numbers?

I have to admit that I am glad I'm retired, but I do feel for anyone not having a sense of security in their job. I suppose it should be another thread, but what will graduates have to look forward to, jobwise, in the spring of 2009? The picture could be pretty bleak if they didn't take a course of study still in some demand.

    Bookmark   December 15, 2008 at 9:34PM
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Well, with the economy so bad, I want to join the great network of investors, sounds like easy money to me, oh that is what he said EASY MONEY, I can pay it back with my investment returns!
If it is on the Internet it must be true.

Maybe I should just sign off...

    Bookmark   August 3, 2009 at 11:40PM
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