How to Plan For a Double-Dip Recession

[adopted from http://finance.yahoo.com/news/How-to-Plan-For-a-DoubleDip-usnews-2055778412.html?x=0]

Rick Newman, On Friday June 11, 2010, 3:13 pm EDT

The insurance company Aflac didn't lose money during the recession, and it managed to pare costs without any layoffs. But it did institute a hiring freeze, which could stay in effect until the economy looks a lot stronger than it does right now. Many of Aflac's customers are small businesses like construction firms and car dealerships, and until they see a big pickup in business and start hiring themselves, Aflac's own sales won't increase enough to justify more hiring. "For us to see a pickup in new sales, somebody else needs to start it first," says Aflac CEO Dan Amos. "Jobs are going to be very slow in coming back."

[Slide Show: 11 Ways to Prepare for a Double-Dip Recession.]

In the aftermath of the Great Recession, that seems to be the whole problem: Everybody's waiting for somebody else to kick-start a robust recovery. Consumers typically get the ball rolling as they boost spending on homes, cars, appliances, and other purchases that they put off during the downturn. But millions of consumers remain out of work or dogged by too much debt. Companies would start hiring again if they felt economic activity was heating up, but CEOs like Amos have their doubts. The weak hiring then creates a circular effect, reinforcing consumers' reluctance to spend.

If consumers and businesses don't get traction soon, there could even be another recession. The dreaded "double-dip" scenario seems unlikely: Moody's Economy.com, for example, says there's just a 23 percent chance that the U.S. economy will be in a recession six months from now. But other forecasts are gloomier, and there's plenty of economic trouble to worry about. Europe seems much more prone to a double-dip, thanks to debt problems in Greece, Spain, Italy, and other countries, and any pain there could hurt here, too. In the United States, meanwhile, the housing bust refuses to end, government stimulus spending will soon peter out, and a mushrooming federal debt is spooking investors. If the American economy is ready to stand on its own, it's sure taking its time getting up off the floor.

It would probably take a major financial shock--like a debt default in one or more European countries--to trigger a double-dip, which would be characterized by a pullback in bank lending (again), fresh corporate layoffs, panicky stock markets, and plunging consumer confidence. There's not much ordinary consumers can do to prevent that, but they can take steps to safeguard their finances and improve their options if the economy gets worse instead of better. Here are 11 ways to prepare for a double-dip:

Save more. It might sound obvious, yet Americans aren't doing it. During the worst days of the recession, Americans boosted their savings to about 5 percent of their disposable income, as they built (or rebuilt) nest eggs and rainy-day funds. But the savings rate has now fallen to 3.4 percent, and that's not high enough. Economists believe the savings rate needs to be somewhere between 6 and 10 percent, for several years, for the nation to rebuild all the wealth lost in the housing and stock market busts. That might sound high, but the historical average after World War II was about 12 percent. Few households today can match that.

[See 10 companies back from the brink.]

Make backup plans. Yeah, it's tiresome to keep asking what could go wrong. But don't assume that just because the recession is technically over, you're out of the woods. Employers still might be inclined to cut pay, reduce hours, and trim their staffs, and some companies remain at risk of going belly up. So make contingency plans for what you would do if you lost 20 percent of your income, or 50 percent. What would you give up? How would you cut expenses? Are there any drastic changes you'd be able to make to get by on a lot less?

Stay liquid. Your rainy-day fund won't do much good if you can't tap into it, or if you'll lose money by being forced to sell stocks or other investments. With interest rates on the safest investments extremely low, it's tempting to invest cash someplace where it will earn a higher return. But make sure you retain a cushion in case something goes wrong.

Get smarter. Once employers do start to hire again, they're going to be extremely selective since they've got a huge pool to choose from. The best way to distinguish yourself is through education and training that's superior to those you're competing against for jobs. Additional degrees, courses, and training certificates are one obvious differentiator, but you don't need to spend a fortune to gain an edge. Employers will also be impressed if you can grasp technology that befuddles others or show deep knowledge of the issues facing your industry. Just showing up and asking for a job won't cut it any more, especially if the economy takes another downward turn.

[See 7 new rules for getting ahead.]

Start something on the side. You might prefer to relax in front of the TV at night, but that's not much of a backup plan. Instead, you might do freelance or consulting work, start an eBay business, or build a Web site showcasing your skills and accomplishments. That way, if you unexpectedly lose your day job, you'll have a little something to fall back on. You might even earn some extra income or make connections that open new doors. By the way, insisting that you're not the entrepreneurial type is no longer an excuse: A huge range of services on the Web, many of them free, make it easier than ever to set up shop on your own.

Wait. You might be dying to replace your aging car or upgrade to a more comfortable home. But put it off a little longer if you can. Money spent on a home or car is hard to tap into if you suddenly need it, and higher monthly payments could become a noose on your finances if money gets tight. This might require unusual discipline since it's a great time to buy a home, car, or other big-ticket item. Interest rates on loans are near historic lows, and with buyers scarce, prices are down. The good news is that a weak economy will probably depress prices for a while. Interest rates are harder to predict, but many economists now expect the Federal Reserve to wait until mid-2011 to raise its own short-term rates, which often reflect the rates on consumer loans. So there's a good chance it will still be a buyer's market a year from now--when the outlook for the economy might be clearer.

[See 10 new things we can't live without.]

Resist the lure of cheap energy. Oil prices have been falling lately, along with the price of gasoline, heating fuel, and other types of energy. But don't get used to it. Energy prices are depressed largely because the global economy is weak, but there's a good chance they'll go back up whenever the economy strengthens and demand for energy increases. So if you do buy a new car, home, or anything else that consumes energy, factor in fuel prices closer to 2008 levels--when gas hit $4 a gallon--than today's prices.

Postpone retirement. You might be able to retire on schedule, but if you're banking on the current value of your home or investment portfolio, run the numbers and ask if you could still afford retirement if the value of your assets fell by 20 percent or so. That probably won't happen, but working another few years and adding to your nest egg can't hurt. Take consolation in the fact that many of your fellow Americans will end up doing the same thing--partly because they can't afford to retire, and partly because official retirement ages are likely to go up.

Downsize. If you're planning any big changes, think small. If you have to move for a job, for instance, you might be able to move into a new home with one less bedroom or a smaller kitchen than you're used to, while lowering your mortgage payment and energy usage. Buy a four-cylinder car instead of a six-cylinder; your 0-to-60 time doesn't matter as much as it used to. If you run your own business, ask your landlord for a rent reduction, look for cheaper space, or see if it's possible to set up your office in the basement of your home. Space is cheap for the moment. Take advantage of it.

[See what Washington needs to learn from Greece.]

Stop speculating. If you guessed right and put money into the stock market during the low points of 2009, congratulations: You caught an epic wave that led stocks up by more than 80 percent between March 2009 and April 2010. But that rocket ride was based on the expectation that a recovery was coming and that stocks had been heavily oversold, assumptions that are suspect today. It's impossible to predict whether stocks will go up or down, but it does seem clear that the conditions that produced a bull market a year ago no longer exist. And those nagging debt problems in Europe could trigger a panic with little warning. So if you're playing the market today, be prepared to lose what you gamble.

Don't count on the government. Washington rode to the rescue in 2008 and 2009, with bailouts, stimulus spending, and vast economic subsidies that kept the recession from being a lot worse. But there's a limit to the levers Washington can pull, especially as the federal debt mushrooms and legislators get nervous about deficit spending. And many strapped state and local governments are now being forced to cut services and raise taxes. That means there will be a lot less help from the government to jolt a weak economy in the future, which could affect anybody who's gotten tax breaks, extended unemployment insurance, a stimulus-supported job, or other government aid. Sooner or later, the U.S. economy needs to function without a government crutch, and that moment could arrive sooner than we want it to. So get used to it: You're on your own.

Happy Birthdays 2010

= This post will be amended in rolling fashion =

Month of Jan ?

Feb 13 - Haur ?

Mar 12 - Sheen

Mar 29 - Huay

Apr 5 - Nai Nai (grandmother)

to be added:

Oct 5 - Wife

Dec 27 - Shuen

The New Rules of Remodeling

adopted from Yahoo Finance

original link: The New Rules of Remodeling

by M.P. Mcqueen

Tuesday, May 4, 2010

provided by

THE WALLSTREET JOURNAL

You may have noticed the lines at home-improvement stores getting longer or heard the whirring of buzz saws in your neighborhood. After years of economic recession and housing-market malaise, people are starting to fix up their homes again.

According to an April 15 report from the Joint Center for Housing Studies at Harvard University, annual spending on remodeling is expected to accelerate this year, with nearly 5% growth over 2009. "This year could produce the first annual spending increase for the industry since 2006," the peak of the housing boom, says center director Nicolas P. Retsinas.

But the forces driving today's action couldn't be more different from those during the boom. Back then, people wanted to renovate their places so that they could trade up to bigger homes, or because their home equity was soaring and they wanted to reinvest some of the spoils.

Now, the opposite is happening: Many people who bought during the boom years are accepting the reality that they won't soon be swapping up for a sybaritic spread. Their mortgages may remain above water, but after years of falling home prices, their equity is so low that the transaction costs of buying a new house would leave little for a down payment.

In short, they are stuck.

"People have seen their down payments kind of wiped out," says Harvard economist Jeremy Stein. "They are locked into their house. They can't really move, even if they thought the other house was cheap and a good deal."

So these people are making their homes more comfortable for a longer-than-expected stay. Setting aside old calculations of how much a particular improvement will add to resale value, they are making smaller tweaks that can make a big difference in livability. You might call it "psychological return on investment."

Nowadays, say real-estate agents and contractors, smaller projects like updating kitchens and baths and humble attic-bedroom conversions are more popular, while two-story master suites and $100,000 kitchen blowouts are decidedly out of fashion. Hidden improvements like insulation also are on the rise, as people realize they won't be able to pass on their drafts, leaks and other problems to the next guy. Tax credits that expire in 2010 are enticing people to make energy improvements, too.

One of the most cost-effective improvements, say contractors, is removing a wall to create an open kitchen-dining area. The project "makes the kitchen feel bigger and the kitchen and dining room more usable," says Sarah Susanka, an architect and author of "The Not So Big House" book series. "It's such a simple thing to do." It can cost as little as a couple of thousand dollars, according to David Merrick, a home remodeler in Kensington, Md., but can run much higher if plumbing and electrical work are involved.

A surprising number of people fall into the category of being above water on their mortgage but anchored to their property. According to First American Core Logic, at least 24.5 million borrowers in the U.S. have home equity of less than 25%, and of those, 13.2 million are above water. Considering the 9% in commissions and fees that typically come with buying and selling a house, as well as the typical 20% down payment on the new one, it is easy to see why people aren't house-hopping like before.

This applies even to affluent professionals. Paul Sorbera, an executive recruiter in Greenwich, Conn., is seeing it firsthand among his clients. He says many financial-services executives "bought $2 million homes in the good times and have $1.3 million houses now because of the price decline. They have some money in the bank and can afford their current living standard, but moving is very impractical for them."

Economists, whose models often assume the rationality of hypothetical consumers, say remodeling makes sense for such people. "If they don't have a lot of equity in their houses and can't move, they should have a propensity to improve rather than move," says Richard K. Green, director of the University of Southern California's Lusk Center for Real Estate. "When you renovate, you save a lot of transaction costs."

Web sites such as Remodelormove.com offer calculators to help consumers make the decision.

Kate Anderson, 42 years old, of Sunnyvale, Calif., a technical writer and homemaker, and her husband, Scott, 43, a vice president at Hewlett-Packard (NYSE: HPQ, News), say they considered buying a larger place to accommodate their growing children, a daughter, 10, and son, 8. But they surmised that buying and selling now would be too expensive. "We didn't think it was worth the whole sale purchase expense … just to get a few extra square feet," Mrs. Anderson says.

Instead, they opted to fix up their 1950s-era tract home, worth an estimated $750,000. Most houses in their neighborhood with new kitchens and baths sell for up to $850,000, she says. While their home "is a little squished," they chose to "gradually improve it," she says.

In December, the Andersons remodeled their kitchen, putting in hardwood floors, cherry cabinets and stainless-steel appliances, ripping out a closet and expanding a doorway to improve the flow. They also installed new incandescent ceiling lights and under-cabinet fixtures, which Mrs. Anderson says she especially loves.

Because they made no major structural changes, they kept the cost to about $50,000, a bargain in the pricey Silicon Valley market. It wasn't easy to hew to that budget, though; the couple decided to ditch a garden window over the sink and self-closing drawers, which would have added several thousand dollars to the cost.

Even in the ever-grander suburbs outside Washington, people are thinking smaller. A few years ago, Mr. Merrick, the contractor, says, more people were doing two-story additions, and most people who remodeled kitchens made them larger. Now, "four of the last six kitchens I did, the footprint stayed exactly the same," he says.

Home-improvement retailers are seeing a clear trend toward smaller renovations. Craig Menear, executive vice president of merchandising at Home Depot (NYSE: HD, News), says there has been strength recently in projects involving simple décor updates such as ceramic tile, interior paint, faucets and bath fixtures. At Lowe's (NYSE: LOW, News), customers were drawn to products to update flooring, cabinetry and countertops during the last few months of 2009, the most recent period for which data are available, spokeswoman Maureen Rich says.

Part of the reason, of course, is money. With home prices slumping, there is less equity for homeowners to tap. An April 20 survey by American Express (NYSE: AXP, News), the first of its kind, found that 72% of affluent homeowners planned to make improvements to their houses in 2010. But they expected to spend an average of just $11,500. And most respondents planned to pay for their projects with cash; just 16% planned to use debt.

Banks also are making credit less available than they used to. Keith T. Gumbinger, vice president of HSH.com, a mortgage-data firm, says that before the housing bust, banks would often lend for projects based on the value of the house after completion of the project, but they are less likely to do so now because "there's no guarantee the improvement or the market will lead to price appreciation." The result: even affluent homeowners aren't able to borrow as much as they used to.

With little reason to expect huge price gains in the housing market in the next few years, some homeowners are thinking especially long-term. Diane Ausavich, a remodeling contractor in Milwaukee, says a pair of physicians, as part of a bathroom renovation, recently installed a barrier-free, walk-in shower and higher countertops in their three-story lakefront home built in the 1890s. They did it "so that as they get older they can wheel in and out with a wheelchair if they should have to," Ms. Ausavich says. The homeowners are in their mid-40s and, "being doctors, I'm sure they see the gamut," she says.

Likewise, Marge Kumaki, 57, a marketing and public-relations consultant who resides in Silver Spring, Md., says she and her husband decided to do some basic upgrades on the post-World War II split-level home they have owned for 21 years after their two children left the nest for good in 2007.

She says she would prefer to move to a new high-rise condominium in downtown Bethesda, but that they decided to stay and renovate because it is more cost-effective and they like where they live now. Last summer's severe thunderstorms, which flooded their finished basement and required repairs, spurred them to get started.

Ms. Kumaki says they are planning to spend in the low $30,000s to update the upstairs bathroom, kitchen and family room.

But the couple have decided to hold off on another dream. "I've always wanted an addition, since it is a split level and you can go up or down," she says. "I'd like another level on top, but that's the future."

The New Remodeling Rules

During the bubble, homeowners sought the biggest, splashiest home improvements to boost resale value. Now they're doing smaller projects that deliver a similar result for far less money.

Northern Lights

The Northern Lights are seen above the ash plume of Iceland's Eyjafjallajokull volcano in the evening April 22, 2010. – Reuters pic

Warships sent to rescue stranded travelers

Warships sent to rescue stranded travelers

By JENNIFER QUINN and JAMEY KEATEN, Associated Press Writer

LONDON – Britain sent Royal Navy warships on Monday to rescue those stranded across the Channel by the volcanic ash cloud and the aviation industry blasted European officials, claiming there was "no coordination and no leadership" in the crisis that shut down most European airports for a fifth day.

Eurocontrol, the air traffic agency in Brussels, said less than one-third of flights in Europe were taking off Monday — between 8,000 and 9,000 of the continent's 28,000 scheduled flights. Passengers in Asia who had slept on airport floors for days and were running out of money staged protests at airport counters.

Icelandic volcano still spewing ash

Ash cloud grounds flights

A huge ash cloud from an Icelandic volcano continues to cause the "greatest disruption to air travel since 9/11."

Happy Birthday to Elder Princess

Support Earth Hour on Mar 27 8:30pm

Happy Birthday to Little Prince Charming

선덕여왕 (Queen Seon Deok 《善德女王》)

우리나라 최초의 여성 임금인 선덕여왕의 이야기를 다루고 있는 드라마이다. 덕만공주가 온갖 시련과 시험을 거쳐 우리나라 최초의 여왕이자 신라 제27대 왕인 선덕여왕 자리에 오르기까지의 과정을 생동감 있게 그린 작품이..

등장인물

덕만공주 (이요원 분)
신라 27대 이금 선덕여왕. 미실에게 모든 궈력이 집중된 정세 속에, 진평왕과 마야부인 사이에서 여자 쌍둥이가 태어난다. 쌍둥이는 '어출쌍생이면 성골남진(임금에게서 ..

미실 (고현정 분)
진흥왕, 진지왕, 진평왕 등에게 색공한 후궁. 선덕여왕의 최대의 맞수. 뛰어난 미모와 엄청난 색공술을 무기로 왕들과 화랑들을 휘어잡았던 여걸이자 뛰어난 정치 감각과 ..

김유신 (엄태웅 분)
신라의 명장이자 대신. 신라 정치 세력 중 가야파. 어머니 만명공주와 아버지 김서현이 왕실의 극심한 반대속에 도주를 감행하면서 낳은 아들이 김유신이다. 어린 시절부..

천명공주 (박예진 분)
덕만공주의 쌍둥이 언니, 진평왕의 첫째딸. 덕만공주와 마찬가지로 불길한 신탁 속에 태어났으나 살아남아 화려한 궁에서 예쁘고 귀품있는 공주로 자라난다. 미실의 경계..

앨범제목 : 선덕여왕 (MBC 월화드라마)
아티스트 : Various Artists
발매국가 : 한국
발매날짜 : 2009.09.14
장　　르 : 드라마
시대별 : 2009년

01 Main Title / 박정식
02 유리잔 ／서민영
03 미실 테마 ／김희진 [O.S.T.]
04 달을 가리운 해 ／이소정
05 발밤발밤 ／홍광호
06 바람꽃 (E.S) ／ 예송
07 아라로 ／아이유(IU)
08 도리안(到離岸)／ 조윤정
09 비재(比才)／이시우 [O.S.T.]
10 Passo Dopo Passo ／ Paul Potts(폴 포츠)
11 바람꽃 (E.S) ／아이유(IU)
12 Come, People Of God ／이소정
13 사라(紗羅) ／ 이시우 [O.S.T.]
14 가질 수 없는.. 안을 수 없는.. ／ 김형준 [OST]
15 Destruction Of The Kingdom ／ 송재경 [O.S.T.]
16 덕만 테마 ／엄기엽
17 하눌나리 ／엄기엽
18 낭장결의 ／ 김희진 [O.S.T.]
19 Dreams ／ 김희진 [O.S.T.]
20 The Rising Empire／ 송재경 [O.S.T.]