Best Moves in a Bad Economy Blog

The Christmas shopping season was down 2.2%, the worst decline in almost four decades, according to the International Council of Shopping Centers. Many store chains, such as Goody's and Gottschalks, are going bankrupt. Others, such as Macy's, are closing store locations. The bad news is further unemployment, but the good news for shoppers is that prices will continue to decline as retailers seek to attract business. Read more...

President-elect Barack Obama plans to use the remaining half of the $700 billion bailout to help community banks, small businesses, and homeowners facing foreclosures. The first $350 billion was used to help stabilize large banks, a move which has been criticized because the use of the funds has not been made clear. Read more...

In November, Americans actually reduced their credit card debt by 3.4%. This shows that the recession is causing people to cut back on spending. Banks are also reducing limits for many of their customers. Find out how to responsibly manage and reduce your own credit card debt. Read more...

The Congressional Budget Office warned that unemployment could rise as above 9%, well above the current 6.7%, by the end of 2009. Officials also expect the recession to last well into 2009, despite an $800 billion stimulus package and record-low interest rates. For most of us, that means we must rely on our own ingenuity to find ways to increase income and cut costs. Read more...

The Dow started the New Year in an optimistic mood, closing above 9,000 last Friday and again on Tuesday, the first time since November. An old adage says that, "As goes January, so goes the rest of the year." However, it is much too soon to say that the bear market is over and a new bull market is beginning. The economy still faces trillions of dollars worth of toxic mortgages that must be written off, while new ones accumulate as lower housing prices lead to more foreclosures. Many experts believe the stock market will retest its November low of 7,552 before the bear market could be considered over. Read more...

President-elect Barack Obama may make 40% of his $675-$850 billion stimulus package go towards employee tax cuts. The rest would be spent in public works projects to create 3 million jobs. The tax cuts could be as high as $500 per individual and would lower the amount taken out in paycheck withholdings in 2009. Read more...

Thanks to this week's rise, the Dow ended at 8,816.62, down 34% for the year. The S&P 500 ended at 907.22, a 38% decline. U.S. stocks did better than overseas, with the MSCI Europe Index down 45% and the MSCI Asia Pacific Index down 43% for the year. When you check your statements at year-end, you may find your losses are less if you've had a diversified portfolio. Read more...

A Wall Street Journal survey of 20 economists revealed forecasts all over the map, with the S&P 500 anywhere between 600-1250 by the end of 2009. The index is at 880 today. However, most economists are cautiously optimistic, with only three predicting lower levels. For the average investor, the best bet is still continued financial education and a well-diversified portfolio. Read more...

Foreclosures were down 7% in November, but that's mainly because Fannie Mae and Freddie Mac suspended foreclosures and evictions on the mortgages they own or guarantee from November 26 through January 9. RealtyTrac data shows that delinquencies on loans not yet in foreclosure jumped 7% in November, a record high. However, banks are more willing to renegotiate loans, so homeowners facing foreclosure should be aggressive in working with their bank to save their home. (Source: RealtyTrac, Foreclosure Activity Decreases 7% in November, December 11, 2008) Read more...

All home indicators for November show that the housing market is deteriorating further, although sales are up in the West. Compared to a year ago, home sales declined 10%, prices are down 13% and inventory is up to 11 months on hand. At this point, one in ten homeowners are in financial distress. Home prices are depressed by the number of distress sales, including bank foreclosures and short sales. Learn how to short-sell your home instead of foreclosing. Read more...