Layaway is Back!

The ads are astounding how more retailers are offering layaway this 2011 holiday season. 

Walmart Toys R Us  Sears  K-mart  Best Buy  and more!

It's an aggressive move to recapture sales at a time that consumers are more debt-savy.  The reality is that you may not capture those huge sales or markdowns as the holiday season nears to an end.  Paying full price for an item on layaway will help with your cash budget but perhaps stockpiling the cash in your wallet and waiting for the sale may be a good thing depending upon your wish list this season. 

It's important to reassess your budget this year and see what's a priority and what can wait until closer to the date.  Also, each layaway option has different fees or rules so check out the full details before signing on the dotted line. 

eLayaway is another fee-based company that enables you to make payments on certain items such as iPads and other items.  For a small fee and a proven reliable business in layaway, you can stay on target with your budget this holiday season.

 

Job Creation

The government seeks to pass a bill that will create 1.9 million jobs when the unemployment number exceeds 14 million.  At what cost is this to the taxpayer?  Will this form of legislation help or hinder capitalism? 

The best way to create jobs is for government to not intervene and for the free markets to solve the problem.  Today, we have more followers than leaders.  Taking a risk is scary.  It is easier to rely on someone else to supply a job or money so folks don't have to develop character and work too hard.  No wonder folks in other countries are winning because people in this country can't fend for themselves.  Socialism doesn't create jobs.  Governments do not create jobs.  Capitalism does!

America needs less government intervention and more people willing to work.  Less drugs and more accountability.  Less wimpy and more hefty!

The film Courageous is perhaps a film overdue for men in this country to watch.  Perhaps it will help many understand the importance of doing what is right especially for your family, community and ultimately your country.

Unemployment vs. Employment

Companies are not hiring those who are without a job!  I learned of this interesting finding via the news yesterday and became greatly disturbed.  If a person is unemployed, they are readily available to work and will probably work 10x harder. 

A disturbing trend because of the economy is that employers are letting go their employees who are underperforming and are hiring better job performers.  Perhaps this shakedown is trickling to an end; however, the bleak times for many continue as many taking unemployment and still seeking a job are closing in on 2 years. 

College graduates and those new to the workforce are even more challenged because of little to no experience.  How can one obtain work experience when no one will hire them?

Military spouses are dealing with similar issues; however, because of PCSing and other challenges, many military spouses are challenged to find decent paying jobs.  Colleges and universities are like sharks, more than ready to take your money but the promise of a job to offset the costs of education is what prevents many from doing this.  There are scholarships and educational discounts for military and their spouses; however, you must submit applications which can take more time than is realistic for the military person.

In this troubling economic time, it is difficult to find encouragement.  The only recommendation that I can write is to not give up, keep networking and applying for jobs, and be more open to taking a job that is perceived to be lower on your list.  Perhaps digging deep and working hard will build character in you in ways you least expect. 

Food Stamps on the Rise

Altogether, there are now almost 46 million people in the United States on food stamps, roughly 15 percent of the population. That's an increase of 74 percent since 2007, just before the financial crisis and a deep recession led to mass job losses.  U.S. becomes Food Stamp Nation but Is It Sustainable? 

Interesting article about a rising consequence of inflation, unemployment and other challenges that U.S. citizens are experiencing. 

Military families are just as challenged as those working for Walmart. 

Standard & Poor's Lowers USA Long Term Rating to AA+ For First Time in 70 Years

On August 5, 2011, the Standard & Poor's Rating lowered the United States of America's long-term sovereign credit rating from AAA to AA+ for the first time in 70 years.  Regarding its short-term rating, the S&P affirmed the A-1+ rating.

Why is this significant news?

The USA is officially entering a new financial era that reflects upon the current behavior and cultural trend that has been evolvling perhaps since the 1960s.  Given the August 2, 2011 passage of the Budget Control Act Amendment of 2011, the US fiscal policy has assuaged immediate concerns about any immediate threat of payment default as the US government continues to encounter political governance that is less stable, less practical and less cooperative between political parties to resolve matters of most importance.  In other words, the United States is heavily debt-laden, and the question of the currency and its valuation to repay the debt is of grave concern.

Standard & Poor's report presents sound financial rationale and perspective on the current outlook.  It is well worth anyone's time or effort to read these unbiased facts.

Concerning military personnel, it is going to be a rocky road between now and 2012 as the government debt burden will go higher and as the baby boom generation marks its draw on social security, medicare and such.  Cuts and reductions are on the horizon for civilian discretionary spending, defense and Medicare. 

Donald Marron presents more interesting financial perspective.  Moody's and Fitch have affirmed the USA's crediting rating at AAA while China's Datong credit rating agency lowered it earlier this week to negative.  Donald is right to expect more US downgrades regarding debt.  There are five countries in the past 30 years who have regained an S&P AAA rating so there is hope for the US to regain this rating but it will come at political crossroad that many are very VERY concerned about.

There will be more news reporting (as well as hype).  Political parties will blame the other.  The American consumer is awakening to a reality that has been evolving for quite sometime.  Question is Will our elected officials in Congress and the Administration be able to work something out?  I am pessimistic at this juncture and am discouraged for my husband and all the men and women who work in the military as well as those hardworking Americans who do work, who do do the right thing and who do NOT sit on their buts and let someone literally feed them with every materialistic item out there.  We may even see taxes rise on both incomes and investments in ways we've not seen for awhile. 

For many who serve in the military, it is likely that many cutbacks will occur as the defense department will downsize the military (now I do not know this for a fact....this is only my opinion).  Perhaps it is raising the military to be more sophisticated and effective by doing more with less.  If you read the Forbes article on where our next corporate America managers are coming from, it is the military.  I believe that serving in the military will rise in prestige as Americans begin to appreciate the high level of quality, education and training these men and women have received.  Life for the military spouse will become more isolating.  Reliance on social networking and certain other networks will increase with importance for the military families. 

Regarding finances and military pay, it is challenging for many to make it without dual income, and for many military spouses, that's challenging to have a career as the military relocates you and your family every 2-4 years. 

In a previous blog, I posted information for disabled veterans and those who have served our country about the Concurrent Retirement and Disability Pay (CRDP). Qualified disabled military retirees will get paid both their full military retirement pay and their VA disability compensation as stated earlier this year.  I believe that there is elevated risk as to how our disabled veterans will be compensated.  There is not much research or information surfacing about this all important financial issue (something that frustrates me for our fallen comrades).  I find it strange that the US government would not provided proper financial support; however, those who were most skeptical about the War in Iraq do not view favorably our disabled veterans and admonish this liability that could potentially increase in costs for many years to come.  I hope that there is a rise in foundations, non-profit groups or grants for disabled veterans that will lend financial assistance and offset an increasing negative sentiment from those who served.  (Currently I am working on another blog article about CRDP).

The best gift that any and all of us can do is to pay off your debt.

Perhaps by starting with the little details that don't seem to really matter we can make a difference and alert Congress and the Administration to the importance of paying off our debt.  Eventually, the S&P credit rating for this wonderful country will rise back to AAA status (or as Warren Buffet eloquently stated....we've been at a AAAA+ rating only to see the slight pullback to AAA).

2012 Military Pay Outlook & US Government Shutdown

According to Military.com 2012 Pay News - The president's 2012 budget request includes a proposal for a 1.6% military pay raise for 2012. While slightly larger than last year's military pay increase, the 2012 proposed military pay increase would be the second smallest in 50 years.

Concerning all the political and current news being reported, I am leery of what's to come next.  Our current economic climate is seeing some positive signs such as manufacturing has picked up according to the Institute for Supply Management.  Leading economic indicators look good as a recovery appears stronger and stronger since the 2009 dip.  Housing has yet to see any improvement as personal income is down.  While personal consumption is up according to the US Dept of Commerce, I suspect that it is the usual Amerian tendency to spend with a credit card or other debt.  For those military members interested in managing their financial affairs better,  I would determine a household budget based on current pay and then computer another budget based on the 2012 military pay proposed above.  While military personnel and their families should NOT endure the stress of  getting paid, it is important to get out your calculator, pen & paper, and/or computer to determine your spending plan.  Military wives especially need to lower their spending habits because it is amazing the unlimited choices relative to your limited financial resources.

In the article Why Put Military Pay At Risk?, it lends perspective on general sentiment.  That this political talk is WRONG. 

Accordig to Rick Maze of the Air Force Times, Rep. Hunter is trying to get Congress to pass HR 1551 where military pay would be guaranteed.   To date, there are 39 co-sponsors of the bill.  The challenge is the debt ceiling and what the US Government intends to do regarding this $14.3 trillion debt issue.  There is a financial risk involved with guaranteeing such a large amount of money for any business situation let alone government.  However, the military is a different matter when it comes to government and certain financial obligations.  There are other budget cuts that should occur before reducing military pay (the above small increase in military pay 2012 is a political statement that is an insult to hardworking and underpaid military personnel and their families) such as fourth generation welfare recipients who have a refridgerator, cable tv, a wii or playstation, and these electronic food stamp cards where purchases include beer, wedding cakes, steaks and other.   I personally do not have cable tv nor a wii or playstation.

As of this blog publication, there is no guarantee that military pay will occur should the government shutdown occur.  I am sorry to type this because it is just wrong.  Historically, this has been a challenge for past armies and military troops throughout the ages (the Romans and others).  It is critical to pay your military because if you look at history, it is a telling tale.

Unemployment Number Raises Alert to Investors

As the unemployment number is reported today, the bleeding scene on my computer confirmed the stock market's sentiment regarding it.  Economic Woes Slam Stocks is a good recap.   If you read this article on CNBC by Patti Domm, you will see how concerns are elevated. Next Tuesday when the Fed Chairman speaks will be very interesting.

Calls coming in about how Obama has messed up the economy are happening in homes across America.  All I know is that the current economic conditions particularly from a financial perspective are of significant concern.  After Jobs Data, is Q3E a Go?  is a good article highlighting a shared sentiment amongst many. 

Blah Days As Food and Gas Prices Rise

I don't know about other households but mine is feeling the pinch at the gas station and grocery store.  Forecasters predict food and gas prices to rise even more this summer.  Tomatoes have been a luxery item of late.  I am even learning how to buy milk and freeze it just to cut back on my number of trips to the store.  One of my neighbors did away with their garden one summer because it was too much to handle but now they are gearing back up the garden to feed a family of six this summer.  I've reduce my eat out bill and am even reducing sitter costs.  Whatever the case may be for your household or situation, it is wise to pinch pennies, get creative with meals and reduce trips. 

Just this past weekend at the mall, one store was offering you 25% off anything in the store that day just for coming in it.  I've noticed coupon adds for Gap and Bannana Republic like never before.  Forever21 store was packed at the mall and it's simply because they are selling cheap clothes that meet the practical needs of their customer.  I bought one dress for $14 and plan for it to be my one buy this summer.   There's an increase in advertising and sales promotion but my question is THIS working to generate sales or are these stores still operating in red from the current economy?

My skeptic perspective is reigning high these days as I myself cut back on a lot of expenses and try to do more at home or in more economical ways.  Wives of Faith has reinstated its Coups for Troops program so definitely sign on for that deal if possible. 

If it is like going back to the 1970s where we do more potluck suppers and other creative but cost-reducing ways to socialize, then I believe that we are foreshadowing a challenging and punitive time in our country's business economic future. 

International Monetary Fund Shows America's Decline Yet How Do You Invest?

The International Monetary Fund (IMF) shows America's decline as a percentage of the world's purchasing power and that China will take the no. 1 positon in five years.  Brent Arends of Marketwatch writes a brilliant article on the IMF Bombshell so please click the link to review it.   With China's economy to likely surpass ours in 2016, it's interesting how more articles are being published about this very topic and the devaluation of the US dollar yet not much is being done.  CNBC's article on Don't Like a Weak Dollar? lends more current news on the dollar. 

Given some grim current news about the US dollar, our national debt and the decline of US dominance with regard to the IMF, how do you invest? 

It's a provacative question that many are pondering in the back of their minds as they go about the day caring for children, working a job, and/or sidelining it in retirement.  My parents are baffled by what the future holds if things don't improve.  Many of the baby boom generation seeking to retire and enjoy social security are perplexed at IF they should retire rather than when.  Health insurance, medical bills and medicines are high and tend to take away a larger portion of their fixed income than originally calculated.  For those of us twenty plus years away from retirement and/or funding a child's college, it's perplexing where to seek the best return for your investment. 

My recommendation is to first assess your financial situation as well as your time horizon.  If you are a young person, then you have time to invest and reap the benefit of the power of compounding.  If you are working and are starting a family, it's time to invest in good quality growth investments.  If you are nearing retirement, it is important to sock away as much as possible and focus on a balanced account. By all means, it is wise to pay off all your debt.  There are ways to do this, and while each individual case is unique, I recommend that you seek the advice of a professional. 

We can't worry about the IMF statistics nor America's decline.  America historically has combatted many unbelievable scenarios where we were the underdog, yet the underdog prevailed.  I have NO MAGIC wand but I have faith in the American capitalistic spirit that remains in few of us today.  Should we correct certain measures, we as a nation will remain a strong economic influence in the world.  Invest in America is still a good idea.

S&P Negative Outlook on US Dollar

According to the Financial Times, the S&P credit agency downgraded the dollar from stable to a negative outlook.  Our national debt is of huge concern.  Wall Street saw the color red on just about all screens today as concern grows about the U.S. not addressing its budget deficit. This is reflected in the down rating.  Even FoxNews reports a negative rating should jolt politicians in the United States to resolve this budget deficit. 

If you go to US National Debt Clock's web site page, you will see some shocking numbers.

Raising the debt ceiling may put a patch on things but the bottom line is change has NOT happened.  The debt is destroying opportunities for our future generations.  Our forefathers would be rolling over in their graves if they knew of the present financial situation for this country.  Ed Morrissey writes a good wake-up call on how Americans need to reduce debt to income.  Keep in mind that U.S. households versus the U.S. Government are not as much alike as you would think.  If you read the Consumerism Commentary on The Budget Deficit and Debt, you will understand a subtle difference. 

This is just the beginning of a long road ahead for America to get itself out of a budget deficit, turn the economy around and pay down its national debt.  The bells and sirens have gone off.  Wall Street showed its reaction today.  Time will tell what will come. 

WAR of the CURRENCIES

If Donald Trump's wake-up call about a 25% tariff on imported goods from China doesn't strike you enthusiastically, then consider this:  we are at war and it is a war of the currencies. 

China devalues its currency by up to 40% so that US manufacturers can't compete with goods and services imported from China.  A trade tariff may be a wake-up call that's come too late (it could have been made in the 1990s).  President Hu has criticized the US for it's plan to buy $600 billion of debt to stimulate the economy.  (How come the U.S. media hasn't cared to comment about this....Instead, all that is on the news is who got killed, what charity organization got what, what the weather did in this part of the country or a picture of a cute dog up for adoption).  China has a vested interest in our monetary system since it holds billions of dollars in government debt (or U.S. Treasuries).  I find this debt issue alarming.  There is justification for the dollar being a financial product of the past and the yuan to emerge as the next dominant currency of exchange.  (Jim Rogers sells many of his books translated into the Chinese language if you look on his official web site page). 

The Eurodollar back in the 90s was intended to compete directly with the U.S. dollar.  Europe imitated a similar financia approach to the United States with one major problem....they were not a unified nation under similar laws nor similar fiscal systems.  Hence, today's challenges presents a major setback for the Euro.

Critics and experts can all say what they want to say.

Speaking in China at a gathering of finance ministers from the Group of 20 economic powers Thursday, U.S. Treasury Secretary Tim Geithner said that "weaknesses and inconsistencies" in global exchange rate policies are among the biggest challenges facing the international monetary system according to CnnMoney.com.

What many fail to communicate to the American people is the importance of a unified economic force to remain competitive in international markets.  As the average American goes to work and brings home a paycheck, it's discouraging because of the longer hours, less pay and/or benefits and less time with family.  Americans are in debt and use debt to maintain a standard of living that is not sustainable over the long haul.  The Unions cannot make demands today that were once influential.  We as a nation are just not as competitive as we used to be. 

Our National Debt is of grave concern to those who care about the future for our children and grandchildren.  What is to become of this debt?  How can we maintain interest payments?  Why won't politicians halt the bleeding and do what the American people elected them to office to do?  While Donald Trump's run for the Presidential Office may seem a side-kick to the GOP or funny to some, I say "You Go Donald Trump, and please help me save this country for the sake of our children."

Big Picture Spring 2011

Military spouses:  It is important to get educated in your personal finances.  Understanding the basic economy or the big picture will enhance your knowledge and decision-making when it comes to your personal investments in your 401k, IRA or other investment accounts.

Given the hype that inflation is once again in the news from many credible sources such as The Valueline Investment Survey and investment strategist professionals, it is an interesting economic time in our country.

Stockcharts.com presents a PERF: S&P Sector ETFs chart that affirms what many are discussing.  That the US economy is in an early recovery while the financial markets are seeing maturation from its recent run-up. 

Though the economic recovery is in its early stages, there is an elevation among consumer confidence that's premature yet welcomed causing many to breath a sigh of relief.  Consumer sentiment is up (even though many are being cautious about spending).  Keep in mind that the consumer accounts for 70% of the nation's gross domestic product. 

Industrial production is picking back up with many companies hiring, adding back in shifts/workers to meet market demands, and upping advertising as well as catalog production publications.  This is an encouraging sign.

John Murphy blogs about Bond Yields Jump and how this is favorable for stocks but not for bonds.  Rising bond yields show that the economy is strengthening.  Below he depicts how breakout from the 50 day moving average line for the 10 year treasury note yield has been affirmed technically. 



Interest rates are at lows and have no where to go but UP!  There is risk involved as those with portfolios exposed to a rise in interest rates may suffer a setback.  Fixed-income investments such as bonds, cds, money management, municipals and other bond-related investments will encounter a challenge. Current yield curve is normal.  This is likely to change but not too quick anytime soon.  The Federal Reserve's flow of funds lending shows an uptrend in net lending from banks; however, banks are being more cautious given past financial loss from loan loss provisions and other. 

Housing market has been in the doldrums with a strong downtrend in new home sales and existing home sales going back to 2005.  Many have seen their houses not sell or devalued well below expectations.  In certain respects, housing has seen a correction and has become affordable for some.  As is prudent, many are reluctant to purchase housing because of the tremendous financial loss from the sale of their last home, the job market and certain uncertainties with current employment, and inflationary woes as food costs and energy prices are on the rise.  Real estate agents and other professionals are seeking creative ways to entice activity. 

Global events will occur.  It is unfortunate what's occurred in Japan.  We have yet to see the impact economically it will have on our US economy.  Turmoil in the Middle East/North Africa, the ongoing war in Afghanistan and Iraq, and even the BP spill off the Gulf shoreline are many unforeseeable events that will affect us.  While global events may mobilize many military personnel into activation and relocation, it is a time for the military community to consider local economics surrounding bases and areas of living.  Guard and reserve deal with more localized economics.

In consideration of the US financial markets, it's likely that global events and the risks of inflation will affect any gains made so far.