Sushi Money

“Out with the old, in with the new” as the saying goes.  Timely words for welcoming a new year that will hopefully be a far cry from last year, at least financially speaking.    For many of us the new year also means a new commitment to getting rid of debt and increasing savings.  In short, through circumstance or necessity, many of our priorities have changed.  

Jim Citrin looks at Getting Back to Basics in 2009, describing how changing priorities have affected business perspectives:

“The era of unchecked consumerism and financial excess had the insidious effect of devaluing everything. Why save money when you could borrow to get whatever you wanted? Why hang on to clothes and appliances when you could just go to the store and buy new ones? Why make structural improvements to your business operations or deepen customer relationships when you could push more stuff to get the growth that Wall Street demanded?”

“In one fell swoop, these attitudes have ground to a halt. They’ve been replaced by millions of healthier conversations in conference rooms and around kitchen tables about how to save, conserve, and prioritize.”

The article looks for a silver lining, examining how we can reconnect and make the best of the difficult times we live in.  I appreciate his views because it makes the simple point that we have a choice with how to respond to the current economic environment.  Sit around and wring our hands?  No. We need to get up and do something about our situation, and work to improve our lives and fortunes.

Admittedly the really tough part of the economic challenge we face is how far it has reached into people’s lives.  Between housing, the stock market and the credit crunch, the financial challenges have touched every level of the socio-economic spectrum.   For those who have lived too long on debt and excessive borrowing, the money faucet has been turned off.  Now they’re struggling to save, get by and get rid of that debt.  Others are struggling with layoffs and trying to find a job.  And even for those who saved and invested diligently through the years, the stock market’s downward spiral has demoralized investors into wondering why they ever invested in the first place.

A lot of frugal and industrious folks today are wondering if they should have just spent more of their money when they had it, instead of scrimping and saving through the years only to watch it disappear in a few months.

Most of all it’s just hard to feel confident about our choices right now.  And we’re shocked when reading about financial scandals and corruption.  It’s no surprise that many people have moved their assets to cash in CDs and savings accounts, deciding that something is better than nothing.   Nothing wrong with that, especially if you need the money in 3-5 years, or you are already retired and may need that money for healthcare or living expenses.   But the rate of return on those accounts is really low, and most planners will still target a growth or dividend component in the overall allocation mix if possible. 

Dividends are also king right now for investors, and there’s nothing like getting paid to hold a good company in stock.  Fixed income investments also may offer some of the best opportunities in the next few years.  Cash-wise I’m at least putting some money into a good quality high-yield savings account such as with ING, and money market accounts such as Vanguard Prime.  If you want treasuries (who doesn’t!?), Vanguard also has several treasury mutual funds.

And I’m certainly still investing in mutual funds and selective stocks, taking advantage of low prices and increasing savings and investments where I can afford it.  Is that a gamble?  Not for me, since I don’t plan to need the money for 10+ years.  If you feel like it’s gambling, then that should tell you something about your risk tolerance, and you should look for a more conservative asset mix. 

But if you’ve got decades until retirement, there’s no better time than right now to accumulate investment shares.  As long as your financial life is in order of course.  I call it my Big Three, and they remain the central focus of our financial lives:  Cut Spending, Pay down Debt, and Increase Savings.  After the first two are under control, then I think about investing.

If you’re feeling bad about your mutual fund losses, most of us can be glad we didn’t join the Dubious 60% Club, and that’s not 60% up…  Bill Miller was a high-flyer for about 15 years as a leading mutual fund manager, but for the past few years- well mostly last year- he has crashed and burned.   It just goes to show that anyone can make poor choices and lose money in the market.  Does that mean he’s sulking in some corner office, licking his wounds?  Absolutely not.  He’s still in their fighting and even managed to beat the S&P 500 for December 2008.   

As we ring in the new year, there’s a host of excellent pracitical advice out there.  Here’s a rundown on some of my favorites:

• The Wall Street Journal offers an eclectic mix of insight for How to Fix Your Life in 2009.  “Exuberance and excess have made way for prudence and pragmatism. Frugality is, once again, a virtue. To help you settle into this strange new world, our reporters have dug deep into their beats…”

• SmartMoney.com shows us 7 Ways to Save in 2009.   “Reducing monthly expenses and saving more money is the must-make resolution for 2009.”

• Kiplinger.com offers a classic article from a few years go reviewing 8 Keys to Financial Security. “Pay yourself first. Protect your loved ones. Borrow sparingly. And don’t go for the home run…”  What a great, timeless article.

• Laura Rowley takes an heady look at the psychology of Understanding Money Behavior in a Financial Crisis.  “One of the keys to surviving the economic crisis, at least from a psychological perspective, is recognizing what you can and can’t control. And not doing destructive things while you’re powerless.”

I wish you a healthy and prosperous new year for 2009.  Sushi Money is two years old this month, and it’s been a grand experiment in the personal finance blogging world.  I don’t how long I’ll continue to write here, and I may look for a different financial niche.  But its been a lot of fun.  One of my goals includes are greater focus on philanthropy.  I’m in little position personally to make significant philantrophic gifts, but I am very thankful for the time and resources I do have available. Maybe there’s some kind of venture in the making.  

In times like these it’s important not to forget those who are struggling.  The economy will gain traction slowly, but there will be many who are left behind.  As we strengthen our own financial lives, it seems a good time to try and help a few others along the way.

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It’s been a busy month with the holidays, and equally busy keeping up with the economic news, most of which isn’t very good.  But at the pump we’re all smiles these days with gas prices hitting five year lows.  Believe it or not I saw gas selling for $1.29 yesterday.  That is amazing, and to think of how much money Americans have wasted over the past couple of years in terms of fuel is even more amazing. 

Maybe wasted is a poor choice of words, but at least we’re not giving billions to third-world crazies anymore while the global recession has reduced demand (and speculation) incredibly.  The good news is how much we’re now saving here at home, and ”Tom Kloza of the Oil Price Information Service says Americans are paying about a billion dollars per day less than in July.”

At least that’s money people can use for other needs during one of the greatest recessions in decades.  But oil prices won’t stay this low forever, and some analysts see prices recovering later in 2009 or 2010 based on greatly reduced oil refinining capacity.  I hope that’s not the case- seems to me we got into the mess partly due to the fact that we didn’t have enough refineries or production capacity.  The big oil companies have little incentive at this point to expand their capacity however, so eventually demand and speculation will increase again.

Maybe we’ll be helped by better mileage cars and alternative energy?  Maybe.  I wouldn’t count on it, but every little bit helps.  That’s especially true in today’s economy, where many people are finding it difficult to juggle income against debt.  I hope you’re doing well at the end of such a tumultuous year, and that 2009 will be a whole lot better for all of us.

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So much going on lately it’s hard to keep up with.   Staying too busy and not looking at the market gyrations each day.  It’s almost like a financial soap opera at times with the spin on the financial crisis.  Yesterday some of the headlines read that consumer prices fell by over 1.7%, which is nearly the greatest amount since 1932.  Yet core inflation was unchanged.  There’s always a story to be found somewhere in the financial news.

So now we’ll be reading about deflation as a grave concern by the Fed and others.  Maybe it is.  But energy prices have fallen so far, so fast that it influences the greater part of the drop in consumer price data.  Based on the past years CPI data, Social Security recipients are getting one of the largest Cola (cost-of-living-allowance) increases since the early 1980’s- 5.8%.  But don’t spend it all at once! Over the last couple of months the drop in consumer prices might indicate a meager Cola in 2010.  So it’s like getting next year’s increase now. 

The bigger news yesterday was the Fed’s lowering of the Fed Funds Rate to nearly zero percent.  That should ultimately influence some interest rate direction, but it’s not all good news.  It might ultimately influence mortgage rates, but it also means lower rates on savings accounts and CD’s. The Fed is really trying to do all it can to stimulate the economy and the business cycle.   Business growth produces jobs, and we know the employment news hasn’t been good lately.

Yet even with interest rates falling, this financial crisis is unlike others in the past.  Instead of falling credit card rates for example, many consumers are receiving notices of increases to their credit card rates, as well as reductions of their credit limits available.  Financial institutions such as Citigroup are citing a “difficult market environment” as their justification for raising rates.  This is a huge problem, especially on the eve of Congress’ new laws regarding consumer protections with credit cards.   

My opinion?  That’s why these companies are raising rates… because they’re not going to be able to after Congress tackles the issue.  Federal regulators are poised to make huge, sweeping changes to the credit card industry- and much strong consumer protections.  So the credit card companies are changing the game to their own benefit now while they can, and it’s not helping consumers.  

Even one of the most customer-friendly financial institutions in the country- USAA Federal Savings Bank- has notified customers that it’s raising rates 2% or more above current rates as a minimum!  You don’t have any choice with this other than to “opt out” after which the card/account will be closed.  Personally I think it’s a disgrace- but these companies are in business to make money, and if they can’t make profit at a certain level, they will raise rates to do so.  As it stands now, they’re concerned about losing money in light of low Prime and variable card interest rates. 

One would think these same companies shouldn’t be able to do this, especially if they’re receiving federal bailout money.  Maybe that’s an indicator of just how bad things have been.

So paying down (or staying out of) debt is more important than ever.  And don’t look for those zero-percent balance transfers to help out either.  They’ve disappeared like a lot of other things, and we just won’t be able to play the ‘ole credit card shell game as much anymore. 

Otherwise everyone’s busy!   It seems like we’re making progress from a macro perspective with the financial challenges we face.  The Fed’s doing all it can to move money around the economy, and maybe the banks will start to lend more in the months ahead.  I’m not a market prognositicator, but I still believe valuations are incredible and offer some of the best investment opportunities we’ll see in our lifetimes.   I’m not chasing stocks or the next big thing, but just trying to stay patient, and focus on long term goals.    Have a great holiday week.

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Bail-out this, and bail-out that.  I know it’s serious and the country is facing so many challenges.  But I’ve got to admit I’m tired of hearing about it all.  You would think Congress holds hearings and press conferences simply to amuse themselves.  Either that or they don’t have a clue about what to do at this point and are hoping for some magical consensus as a way out of the mess. 

But when I look into my heart of hearts, beyond my concerns about the wise use of taxpayer dollars and the exponential increase in the national debt, I also have to admit that I really hope we can put together some kind of a bailout package for the big-three U.S. auto makers- Ford, GM and Chrysler. 

It was hard to put those feelings into words exactly, but after watching banks fail and huge bailouts for the big Wall Street institutions, I was shaking my head wondering why we couldn’t put something together for the auto makers- the icons of American industrial greatness through generations.  After all- if these guys go bankrupt, then what about every supplier and finance company that are so deeply tied to them?  What about the untold thousands of employees whose jobs are linked to the auto industry?  What about all the mom and pop businesses that support and rely on those workers and companies?  And who (else?) is going to want to buy American cars, especially if they are worried about warranty’s, maintenance and a car company still being around in a few years?   

I could go on and on, but today I came across Ben Stein’s article, Bail Out Detroit - Now and I just couldn’t say it any better. 

“I get sick when I hear about how this or that professor says we cannot have bailouts in a free market. Really? How about the bailouts the professors get because gifts to colleges are tax free? How about the bailout they get because if they have to teach six hours a week they feel overwhelmed, while the guy on the line in Dearborn works a grueling forty and doesn’t whine about it?”

“Somehow, we can give bailouts to investment banks where the top dogs make hundreds of millions a year for running the company into the ditch and wrecking the whole credit picture in America. Somehow we can have bailouts for Fannie Mae and Freddie Mac, whose bosses were trading on the credit of the taxpayers to make themselves rich while pumping up a serious housing bubble.”

“Amazingly, we can have whole fleets of C-130’s fly to remote areas of Iraq and Afghanistan with pallets of hundred dollar bills piled from floor to ceiling. Then we can pass them out to warlords who make tea for our soldiers one hour and blow their guts out the next. We can send CIA operatives into Somalia and give millions, maybe hundreds of millions, to warlords to fight other killers.”

“But we cannot find it in our hearts to save our fellow Americans in Ohio and Michigan and Indiana who make the cars and trucks that about half of us buy? We can send billions to Germany and Japan to bail them out after they bombed us and killed our POWs and killed six million Jews. But we cannot help the children and grandchildren of the men and women who fought our war and made us the arsenal of democracy?”

“Something is very wrong here.”

“…And why are we so angry at the car companies’ executives? They get miserable pay by Wall Street standards and have much harder jobs. Why are we so angry at the unions? They negotiated their deals in good faith. It’s not their fault that roller coaster gasoline prices messed up their world. They are our brothers and sisters. They fight our wars. They maintain our middle class lives. Maybe they get paid a lot, but they have been giving back for years. When will it ever be enough? And what about the retirees? They get the benefits they were promised. If those can be taken away, then whose benefits are safe? And do you think it will be cheaper if the government takes on those costs directly?”

“Let’s stop the Depression before it starts. Let’s show some fairness and good faith to our own. Let’s bail out the Big Three, help them slim down, shape up, and keep making great cars and trucks. The Big Three are us and if we cannot help ourselves, who can we help?”

 Bailing out Ford, GM and Chrysler is the right answer, and I hope our legislators get it right- or at least get it started right.  It’s not going to be an easy road, or the final answer.  It will take time and the taxpayers are going to pony up for a lot of it.  But it’s who we are, and in the end- if we let these guys fail altogether, it’s going to cost us a heck of lot more.

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*** Update ***  Apparently the Treasury Secretary’s plan does NOT include plans for current homeowners to refinance their loans.  So while many of us may sit on mortgage loans at greater than 6% or 7%, this plan would allow neighbors to move in to their house with a new mortgage loan with much lower payments.   This seems wrong… it may be a temporary fix, but how will it help millions of current homeowners who are having trouble making payments on their current mortgage loans? 

This week we found out we’re officially in a recession, and have been since around December, 2007.  The market has been wallowing at multi-year lows and layoffs have been increasing.  In light of so many economic challenges, it’s hard to see any bright spots that can move us forward.  But what about a lower mortgage payment?  Would a couple hundred extra bucks each month really make a difference, or help people purchase a house?

For many of us, it just might.  That’s the focus area of the government recently- mortgage loans and the possibility that a U.S. sponsored wave of mortgage activity and refinancing could bolster both the housing market and the economy as a whole. 

“The plan, which is in the development stage, would temporarily use the clout of mortgage giants Fannie Mae and Freddie Mac to encourage banks to lend at rates as low as 4.5%, more than a full point lower than prevailing rates for standard 30-year fixed-rate mortgages.”

“The plan is very similar to an idea floated in October by R. Glenn Hubbard and Christopher Mayer, academics at Columbia University’s Business School. “I think a program to substantially bring down rates for homebuyers would be an incredibly valuable program, and I think it captures a real part of solving what has been an incredibly challenging dislocation in the credit markets,” Mr. Mayer said in an interview. He estimated the idea under consideration could quickly help 1.5 million to 2.5 million people buy homes, giving a major boost to the housing market and broader economy.”

Certainly people would still need to qualify for the mortgage and have decent credit ratings to do so.  But a 30-year loan at 4.5% ?  Sign me up… not only would the monthly payment for many of us decrease, we would be able to focus more on reducing debt levels and increasing consumer spending.  *** Not for current homeowners! ***

“…Treasury Secretary Henry Paulson views lowering mortgage rates as key to fixing the housing crisis; hence the mortgage-security-buying program announced last week.  The most important thing we can do to mitigate foreclosures and progress through the housing correction,” Mr. Paulson said in a speech Monday, “is to reduce the cost of mortgage finance, so more families can afford to buy a home and so homeowners can refinance into more affordable mortgages.”

I have to agree (for once) with Secretary Paulson- making homeownership more affordable for credit-worthy families sounds like a great idea.  As long as we aren’t handing out loans to people that can’t repay them… hopefully we’ve learned that lesson already. 

Just for kicks I ran the numbers on the difference between the monthly payment for a 6.5% 30 year fixed-rate loan, and the same loan at 4.5%.  These numbers are for principal and interest only and don’t include taxes or insurance payments:

• 6.5% 30-year fixed-rate loan:   Monthly payment of $1,137.72
• 4.5% 30-year fixed-rate loan:   Monthly payment of $ 912.03

Okay, so we save about $225 bucks a month with the new mortgage. That’s not chump-change, and lots of folks can qualify for a 4.5% loan that would not otherwise qualify for a 6.5% loan.  Even refinancing is a great idea as long as we’re planning to stay in that house for a few years or more.   *** Not for current homeowners! ***

A Rush Into Refinancing may be just what the country needs right now however. But the new plan may not even include this option!  

I thought that’s what the Treasury Secretary was aiming for, and how they believe it can help dig out the country from the current housing mess.  Get more people into homes sitting empty out there, and make those monthly payments more affordable for all of us.  Good idea, but if they exclude current homeowners, then I don’t see how it helps the economy en masse.

By the way, what’s even more important over the long term on that interest rate scenario?  Think about how much interest you would be saving. 

• 6.5% 30-year fixed-rate loan:  Total interest paid $229,587
• 4.5% 30-year fixed-rate loan:  Total interest paid $148,336

That lower rate loan would save us over $81,000 dollars!!!

Sounds pretty good to me- that would pay for a kitchen and bath remodel, or even a few new cars over the lifetime of that mortgage loan. 

So is it time to buy that house you’ve been looking for?  Time to wade into real estate again?  Well, the real estate debate continues, and there are many opinions.   Even if a lot of us can think of several really good real estate deals out there, the money’s just not there right now.  And that’s part of the problem- with the stock market down, real income down, and folks losing their jobs, we’re running out of people that can qualify to purchase real estate.  

Maybe, just maybe, lower long term mortgage rates will help us climb out of this whirlpool?  Hard to say- that whirlpool is also a downward spiral… and deflation can take a long time to work out of.  Just ask the Japanese.

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It’s been a busy couple of weeks and a nice break over the weekend.  Amazingly it’s already December… I’m all for supporting the economy, but I didn’t join the shopping melee last Friday.  I find myself holding back and shopping a little more carefully these days.  In fact I’ll shop more on the internet than in retail stores, looking for bargains here and there.   Today is supposed to be Cyber Monday for shopping online, but it looks more like Red Monday with the stock market after a key manufacturing index fell to a 26 year low.

Beyond the economic news there’s incredible unrest around the world these days, and now travelers have much to be concerned about.  If the events in India tell us anything, it’s that we must keep up the fight for freedom and against terrorism.  How can we live and grow as free nations around the world if we allow other countries such as Pakistan and Somalia to harbor or export such people?  This is not a simple fix, but will require generational change to overcome.  Hopefully we’ll see it happen in our lifetime.

In Thailand there are hundreds of thousands of travelers stranded at airports around the country trying to get home because of protesting within the nation.  And this at nearly the peak of the tourist season.   Civil unrest in Thailand and other countries is going to impact tourism in a huge way, and deepen the economic crisis for many people.  But the Thai government recognizes the impact and is trying to support tourists through lodging and food allowances while the protests continue.

“Tourism Minister Weerasak said the government will set aside as much as 400 million baht ($11 million) from its budget to pay for hotels and food for stranded tourists. Tourism generates about 1 trillion baht in revenue each year, he said.”

“The government will pay 2,000 baht per person per day for hotels and food,” Weerasak said. “We think we need to spend this to take good care of the tourists. We will try our best to make them feel taken care of.”

When I read such news I must say I am thankful in so many ways.  Doesn’t quite give one the travel bug does it?!  And it puts the economic challenges we face in a better perspective.  We’ve got work to do certainly, but we’ve got a strong foundation to build upon and people willing to work.  Soon we’ll have a new President and administration, as well as a host of minions running around Washington D.C. trying to get things going in a new direction.  Between all the new economic experts and a January stimulus bill, the news is bound to get better eventually.  What happens between now and then is a good question!

With the holidays upon us it’s time to decorate and focus more on home and family.  We won’t be doing much traveling, except perhaps closer to home.  Gas prices are helping the budget immensely, and that’s one more reason to be thankful.  Have a great week.

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What can you say after weeks of stock market losses?  It’s sad, awful, ridiculous and downright scary for a lot of folks.  And if you’re like most people these days, you’ve just stopped looking at it.  Why bother, right?  Maybe you’re a long term investor, and nothing that happens now really matters over the short term anyway.  Or maybe the words “long term investor” don’t mean very much right now.  Or maybe after feeling stressed from watching days of hundred point losses, it just doesn’t make sense anymore.

So is there anything we can really do about it?   Not unless it bothers you so much that you can’t sleep and your life’s a wreck.  Most people in that situation have already sold out long ago.   Me?  I’m just watching in rapt amazement at the carnage wrought by institutional selling.  Hedge funds, private investors, mutual fund redemptions, tax loss selling- all are putting relentless downward pressure on stocks, dropping indexes  to levels not seen in over 5-10 years.

“The Standard & Poor’s 500 index fell 6.7 percent to its lowest close since April 1997. The Dow Jones industrial average, meanwhile, fell 445 points, or 5.6 percent, to its lowest close since March 2003. The decline brings the Dow’s two-day drop to 873 points, or 10.6 percent, its worst two-day percentage loss since October 1987.”

I don’t know what the market or the economy is going to do in the weeks and months ahead.  If I had some extra cash laying around that I didn’t need for 5 years or more, there are some incredibly cheap stocks out there.  But we are where we are… and like most of you I’m just along for the ride at this point.

So… what did I do today?  I went shopping.  A local grocery chain had a great sale going on and I picked up a 20 pound turkey at .67 cents a pound- almost half price.   Then I filled up the car.  Gas was around $1.69 per gallon.  Is that amazing or what?  And wouldn’t it be nice if gas prices stayed low for a while?   There’ll be a lot of drivers on the road next summer if gas prices stay low- especially with airline fees through the roof.   And since we’re in a cash crunch and consumers have cut back on spending, the stores are also offering all kinds of deals right now.

I’m not advocating spending money you don’t have, or investing in the market in stocks you don’t know.  But if you’re in the market for a house or a car or you like a particular company as an investment, is there a better time to buy?  It’s a buyer’s market out there folks.  How long it stays that way is the real question.

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How does a well educated middle-aged registered nurse end up losing $400,000 to scam artists?  For the life of me I can hardly understand how this is possible, especially because it’s such a well known internet scam and involves the red-flag word “Nigeria”.   This otherwise intelligent (maybe not) woman emptied her husband’s retirement account, and took out loans on their house and car all to continue sending money to thieves half way across the world.

“It turned out to be a lot of money up front, but it started with just $100.  The scammers ran Spears through the whole program. They said President Bush and FBI Director “Robert Muller” (their spelling) were in on the deal and needed her help.“

Ahem… well, you see Presidents and FBI Directors don’t ask regular people for help.  Unless they’re behind in the polls for re-election perhaps… But important people have, you know- other people to do that kind of stuff for them?

“They sent official-looking documents and certificates from the Bank of Nigeria and even from the United Nations. Her payment was “guaranteed.”  Then the amount she would get jumped up to $26.6 million – if she would just send $8,300. Spears sent the money.”

“More promises and teases of multi-millions followed, with each one dependent on her sending yet more money. Most of the missives were rife with misspellings.”

Okay, I guess if someone’s going to give me a lot of money I won’t hold their spelling problems against them. 

“When Spears began to doubt the scam, she got letters from the President of Nigeria, FBI Director Mueller, and President Bush. Terrorists could get the money if she did not help, Bush’s letter said. Spears continued to send funds. All the letters were fake, of course.”

Oh boy.  Even worse, she was told it was a scam by relatives, friends and other professionals, and was advised to stop- and still she kept sending money.  No offense Ma’am, but I hope your nursing judgement is better than your everyday, ah, money handling judgement.  

This type of “Nigerian” scam is a called “advance-fee fraud” and it has been around for a long time.  Even worse, it’s reaching an epidemic level and people keep falling for it!   What’s the best way to avoid it?  Just don’t reply to any email or letter than has anything do with Nigeria for one…  more importantly think about these words from the Federal Trade Commission:

If You Receive an Offer

• If you’re tempted to respond to an offer, the FTC suggests you stop and ask yourself two important questions: Why would a perfect stranger pick you — also a perfect stranger — to share a fortune with, and why would you share your personal or business information, including your bank account numbers or your company letterhead, with someone you don’t know?
• And the U.S. Department of State cautions against traveling to the destination mentioned in the letters. According to State Department reports, people who have responded to these “advance-fee” solicitations have been beaten, subjected to threats and extortion, and in some cases, murdered.
• If you receive an offer via email from someone claiming to need your help getting money out of Nigeria — or any other country, for that matter — forward it to the FTC at spam@uce.gov.
• If you have lost money to one of these schemes, call your local Secret Service field office. Local field offices are listed in the Blue Pages of your telephone directory.(I never knew that!?).

Admittedly some people get involved in a scam and it becomes an obsession to fix it, get their money back or it becomes some type of self-denial.  That’s such a shame, and it must border on psychological issues sometimes.  But apparently the woman in the article above would like other people to know her story so maybe it can prevent someone else from falling into this trap.  Good for you lady, and thanks for sharing it.  It’s too bad you couldn’t have done so earlier without losing so much money.   

It also upsets me that our government, and the governments of Nigeria or other countries cannot do something to prevent or remedy this type of situation.   It’s bad enough when we’ve lost 36% over the course of a year in the markets- but to just give our life savings away to scam artists?   Don’t fall for it!

For More Information

More information about Nigerian Advance-Fee Loan scams is available from the U.S. Secret Service (www.secretservice.gov/alert419.shtml).

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad. 

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That’s pantry fellas, okay?  You know, that closet or cupboard where you keep your food and canned goods?  I looked around ours recently and discovered we’ve got a lot more food on hand than we realized.  Maybe not fresh foods like milk and eggs, but if push came to shove we could probably go a month without a major shopping trip.  That’s not even counting what’s in the freezer.   With thoughts like these it’s no wonder we’re reading about consumer spending taking a huge dive last month:

“The Commerce Department reported Friday that retail sales fell by 2.8 percent last month, the biggest drop on record, surpassing the old mark of a 2.65 percent plunge in November 2001 that occurred after the terrorist attacks. The October sales decline was led by a huge fall in auto purchases, but sales of all types of products suffered as consumers, worried about their jobs and the market turbulence, cut back sharply on spending.”

“The dismal report on retail sales was worse than the 2 percent decline that analysts expected. It marked the fourth straight decrease, the longest stretch of weakness on record. Retailers are braced for what could be the worst holiday shopping season in decades with economists forecasting a recession that could turn out to be the steepest since the 1981-82 downturn.”

“A survey of the nation’s big chain retail stores found that retailers suffered through the weakest October in at least 39 years even though they tried to gin up more sales by a frenzied round of price cutting.”

Of course there’s a bright side to a retail downturn…  discounts and sales everywhere.   Now retail doesn’t usually include grocery stores, but I know folks are cutting back there too.  The stores are quieter and emptier.  Except for Wal-Mart.  I made the mistake of going to Wal-Mart on a Friday a week ago- holy cow!

Having grown up through the ‘81-’82 downturn, I’m not sure I learned anything of significance either, especially because I was young and single, and didn’t have a family or home to support.  But we scrambled with multiple jobs and did what we had to do… worked, saved and pinched pennies.  I do remember running out of gas a few times… that was embarassing, but more a reflection of my lack of foresight than anything else.   You know what else was lack of foresight?  Not investing on a disciplined basis each year at the time- I probably gave up a decade or more of investment returns over the length of the 1980’s bull market.   But that’s another story.

As I ponder the current state of affairs it strikes me that most of us have a lot more resources at hand than we may realize.  And that’s also because most of us plan ahead a little bit, and try to stay prepared for whatever might come.  If I look in the pantry, the garage and a few other places, I realize we have a lot of stuff.  Some of it is even useful.  If things get really tough, we’ll be fine for a while.  We’ve already cut back, and we have room to cut back more if we need to.  Admittedly lots of other folks may not, and we’ll need to help them where we can. 

All across America starting this weekend the Boy Scouts and Cub Scouts have their annual food drive to gather donations and help people.  So many of the local food pantry and shelters really need the donations.  Looking at our household pantry I know we have a lot of cans we can give to help another family with Thanskgiving this month.

But if you’ve read Sushi Money at all before, you know I’m not one who believes we’re falling into another Great Depression.  Heck they haven’t even called it a recession formally yet.  But when they do (oh, they most assuredly will!), the recession will probably have started around the middle of 2008. 

We don’t know when this recession will end.  We don’t know how deep it will be, or what will help trigger the turnaround.  But to get the nation moving and growing again means we’ve got to foster business and public works.  And James Stewart’s approach to How Obama Can Fix the Economy makes as much sense as anything I’ve heard from Congress or the Treasury Secretary.  The new President will have a full plate, and a lot of motivation for changing the economic course we’re on right now.   I don’t envy his job, but is there a better time to be a new President than with the economy on the ropes?  Looks like opportunity to me.  

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Today is a day of remembrance and thanks for the Veterans who have served the nation in the armed forces. So many of us have family and friends that have served, and are still serving today.  We are better for their service, and sacrifice. 

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