Happy New Year!

Happy Holidays!

Most Have Shopped but Many Have Not Dropped

I'm feeling much better now that we have plowed through most of the shopping today. Thankfully the shopping was mild and we happily found deep discounts as promised. Surprisingly there was no frenzy or rushing, not too many lines, no overwhelming bags of goods and breathing room; a boon to the shopper, a sad requiem for a retailer. As we looked beyond ourselves to observe the fellow shoppers and their purchases - there were many lookers but still no takers - juxtaposed with the retailers we think are on the "list" as it were; we tried to narrow down who will be the winners and losers in the postscript. More later.

In the meantime, my husband and I bought meager gifts for each other, hoping to capitalize on the upcoming bargains we know will be beckoning next week. We can wait because our joy will come from saving money in the post-holiday shopping phase, not what will be under the tree for us in 2 days. We both have nice non-extravagant lists that we hope to fulfill at just the right price.

All shopping aside though, we all should know by now that the holidays are primarily about reaching out to family, friends and neighbors and making a positive connection. These winter celebrations are truly about the humanity in all of us. Don't forget to find yours and do something with it.

False Positive: Trying to Evade Gloom and Doom

May I be so bold as to go down that road. The road that I am trying to steer away from, the road that has been trampled lately, the road of gloom and doom that appears to be enveloping me despite myself. Not that I have been seeming all that positive lately but in my mind I really was trying. After all, we have to elevate ourselves above the fray if we want to survive.

Today is Tuesday before Christmas and I still have no gifts; well I finally ran out tonight to get a few "school gifts" realizing that tomorrow was the last day of school for the year. I absolutely do not like waiting for the last minute to shop because I hate having to jockey for position and wait on endless lines during the holiday shopping season yet here I am. Now, I have no choice, I have to do it all tomorrow or else.

I wish I wasn't so plain-minded when it comes to shopping then I would have had it all done already. Unfortunately, if I don't have any money or I feel my cash stream is finite, like losing a job, I will not shop, I go into lock-down; I simply will not buy another thing - I am frozen. I haven't even been to the supermarket. I have tried to do the holiday shopping since I was laid off, I have gone to the mall and all the usual discount retailers and I haven't seen anything I want to buy; not one thing has moved me.

Now the financial news shows are raising the red flag, don't buy gift cards at retailers that may not make it past January 2009 for the disconcerting reality is that this is one of the most dismal shopping seasons in decades and many retailers simply will not make enough this holiday season to survive. How the heck is the average person supposed to know which retailers are not going to make it? I try to do a little internet research and I can find plenty of lists of those that have closed under-performing stores or have simply died in 2008. So far, I have not been the most successful finding a good clean list of those that are in jeopardy outside of my own observation...this seems like everyone. Consumer spending is nearly 70% of GDP so if we don't spend; it seems that the economy is doomed anyhow.

You turn on the news and it is nothing but gloom and doom; how many years has it been since we've seen this statistic, this performance, this cycle, and the finality that this downturn will last through next year for sure. Though every guru keeps repeating the mantra that people should prepare for the worst, the reality is that most people really do not have a rainy day fund - that was what credit cards and home equity lines of credit were for. Now that those sources are dried up, most of us do not have the funds we need to survive. Today, commercial builders are begging the government for help because their debt is coming due to the tune of $160,000,000,000.

The bailout road is now on black ice; just slipping and sliding with no clue; everyone is slipping and we have no clue where to turn. How do we know who will survive? Last night, my husband and I were discussing where to invest; now is the time to adjust our 401ks. They keep telling us bargains are to be had in this market and we should steer ourselves towards those. So, I was thinking about companies that may benefit from the proposed infrastructure investments; caterpillar came to mind, they will be providing equipment I said. This morning I woke up to find out I was wrong, wrong, wrong. Caterpillar announced today that it was cutting salaries of all senior management and preparing other cost cutting measures to aid in its survival through next year.

I don't have a crystal ball and neither does anyone else but things really, really, really do not look so good this time around. I am going to keep looking for that light at the end of the tunnel but this tunnel seems awfully long already.

We May Desire but Do We Really Deserve!

Today I went to the mall figuring I would do some holiday shopping during the week to avoid the crowds. Surprisingly the mall was jam packed; holiday shopping SRO as usual despite all the news to the contrary that retail was down. So I focused in on the shoppers and I realized that they didn't have many bags and I had none. I was looking and searching and thinking but I was not satisfied with my choices. Fine choices all and some even at a decent value, I guess, but nothing that made me bite.

Why? I'm not sure, my holiday shopping budget is still intact, it was conservative to begin with, but perhaps, maybe too conservative. Really, my gift budget per person probably can be characterized as chintzy and maybe that is the reality for all of us. Therefore, why buy someone a cheap tchotchke that you know they may not like or simply might re-gift just to get them a gift?

The truth is that after the big shopping spree we have had for the last 8 years, no one really needs anything. Look around, the only complaint that I have really ever heard over the last few years is the need for more storage. No matter how large the homes we owned, we filled it with stuff. Most of us simply have too much stuff. Is there anyone out there who really needs a gift? Though I am willing to accept all ideas if someone has any because I haven't been able to come up with much so far.

I can tell you what I want - my desires are all for the house, a new master bathroom and kitchen, both of which are basically dead, 30 years old and counting. Ask me if I need af any of it, probably not, will I survive, absolutely! Nevertheless, we somehow have the 'desire and deserve' gene that doesn't disappear with a souring economy. If you work hard, you want a reward, the paycheck is part of it and you are grateful enough for it to pay the bills and secure your world but most of us find it hard to live or exist on an austerity budget, whatever the case we still need to treat ourselves to something.

They say charity begins at home and I certainly donate every single item that I no longer have use for. I am a sentimental soul so I save all items that are given to me; letters, gifts & items no matter how small, if you give it to me, I will keep it except household goods, clothing and all that - I will pass those on if I know another family can use them but that bear that one of my good friends gave to me during my freshman year of college, I have that and of course, every single thing that my children ever made for me. I wonder about securing all of it though, mother nature could take my house anytime.

Do any of us really need more stuff? As we try to pay down our debts and keep our financial selves above water, should we really be adding even more debt by still striving to give each other gifts? Probably not. Most of us barely remember what holiday gifts we received last year.

We have been fortunate in America thus far and our recent troubles are our own. If we do have some cash, we should be preserving it to make it through next year. All indications are that it will be 2010 before things turn around. What we need to remember to do is to give of ourselves. I am certainly going to try.

The Audacity of Wall Street Bonuses

I just finished reading an article in today's New York Times reporting on Wall Street bonuses that having been tied to profits we now know were based on way too much risk, created a culture of greed so severe, they played Russian roulette with our money.

Now that all of the money is lost and many Wall Street firms are bankrupt with the rest blatantly staving of death with large infusions of taxpayer dollars, the culture of greed still has not subsided. Though many firms have introduced more oversight with respect to the earning of future bonuses, most Wall Streeters will still see bonuses this year, smaller maybe, but still a bonus.

It took the Dow Industrials 76 years to hit 1000 in November 1972 and another 14 years to reach 2000 in January 1987. After that, it took another 4 years to reach 3000 and 4000 was reached 4 years later in February 1995. By May 1999, a mere 4 years later, the Dow had reached 11,000 and boy were we jumping. The sheer intensity of the rise certainly reset all of our mindsets. In the early 2000s, instant millionaires abounded, individual wealth on paper reach staggering proportions. Wall street bonuses catapulted into unheard-of millions. Everybody wanted to be rich. Since hindsight is 20/20 we can look back and draw our conclusions effortlessly.

If we are to sum up the data, the Dow retreated to less than 9000 in 2003 and after roaring to 14,000 in July 2007, is back to less than 9000 again. the last time it was less than 9000 was in early 1998. We are back to the levels not seen for a decade and what happened during that decade? The most amount of money that could be borrowed was borrowed and the most amount of money that could be spent was spent, all of this while the intrinsic value of the market was inflated due to the swirling fiscal excess.

We now have found out that all the money we spent should not have been spent and all the money that was borrowed definitely should not have been borrowed. Now we all have to suffer and pay the piper. So, why do all those Wall Streeters still get bonuses when no money has been made and especially when the taxpayer has granted most of those firms hundreds of billions to survive?

We Didn't Start The Fire But We Still Have to Pay

The financial situation of most of the middle class here on Long Island is always foremost on my mind. I still have the same question that I had when I started this blog, how is everyone surviving? I thought I would have some insight by now but it is still a mystery to me.

Now we add to the mix the $15,400,000,000 budget gap, attributed largely to a decline in tax revenue from Wall Street, in the New York State budget that requires serious action on the Governor's part. In response, he proposed today serious cuts in school aid and health services, layoffs of state workers, an increase in many ordinary NY State fees, new taxes on just about every bit of entertainment that exists in the state and a repeal of certain tax exemptions especially the star (property tax) rebate.

Some of the Governor's proposed solutions will be painful for all of us; we don't want to have to pay more to renew our licenses and registrations or pay more to download a song on the internet. Most importantly, any cuts in aid means that the local taxpayer has to pick up the tab. More fees and taxes is the last thing that any New Yorker wants to hear right now. However, this is where fiscal reality meets us and indeed it is very unpleasant. We may not have started the fire but we certainly didn't push for fire prevention either.

Interestingly enough, the magnitude of the layoffs is very small, 521 out of some 200,000 state workers. This is an almost negligible layoff, speaking from one who has lived to tell the tale. Indeed the rollbacks on some employee benefits will meet the ire of many especially when the career veterans have already been grand-fathered into much better benefits than the new hires. As every special interest starts screaming bloody murder from the mountaintops this week, we will see what kind of backbone state legislators have when they sit down to vote on all of this.