Friday, February 27, 2009

The other side of bank outrage, Part 2

How sensitive have banks become to outrage over bank spending?

Wells Fargo announced moments ago that it is taking "Wachovia" out of the Wachovia Championship. The tournament's name will instead include the host course, Charlotte's Quail Hollow.

Tournament officials say Wells Fargo, which acquired Wachovia Corp. in December, will honor its sponsorship contract with the PGA Tour, which runs through 2014. So why would a company cost itself millions in marketing exposure, while still paying sponsorship money? It could be the first step of stripping the Wachovia name from its business operation - and our consciousness.

Still, they're not replacing the "Wachovia" in the tournament title with "Wells Fargo."

The decision reflects an apparent sensitivity to the outrage Americans have shown to any extravagance - bonuses, company retreats - that were once commonplace in bank operations. This time, that outrage may come at the expense of Charlotte.

Wells Fargo spokeswoman Mary Beth Navarro told Bloomberg earlier this week that the bank will be reducing costs of the tournament, including some related to client entertainment. No specifics have been determined, she said. But if you're taking your name off the event, what kind of effort - and money - are you going to put into it?

From the start, Wachovia was determined to make its tournament one of the best on the tour, from the cars the players drove in Charlotte to the perks their wives received to the quality of the corporate gatherings.

That glossy feel played a part in luring the PGA's best to Charlotte, which led to a great deal of good press for us, not to mention business for local restaurants and hotels. If Wells Fargo gets frugal with the tournament, elite players could begin to skip, despite the challenge of the fine Quail Hollow course. It's not a giant step back to becoming the John Deere Classic.

Another consideration: Dialing back on the perks and luxuries of a top-notch tournament also would mean cutting back on services and items local businesses provide. And what of the millions that go to charities?

All of which is a difficult call for officials at Wells Fargo. Americans have become watchful of any bank that's received bailout money, as we should be. In this case, that climate might come with a cost to our city.

Have you become an 'insourcer'?

Last fall, after skillfully transforming my lawn into a carpet of crabgrass, I gave in to my horticultural ineptitude and hired a lawn care service. The company is off to a fine start, but I'll be canceling the service next month.

Like many Americans, my family is prepping for a tight 2009 - and hoping it remains merely tight. This means trimming the non-essentials, the tasks we can do (sort of) ourselves.

A new Washington Post poll shows that two-thirds of Americans are cutting back on their spending, many of them sharply. The shift has prompted a trend so stark, the Post says, that businesses and marketers have put a label on it - Insourcing, or doing yourself what you once paid someone to do.

Insourcing has resulted in a spike in sewing kit sales and garden seeds. Procter & Gamble has noticed more people calling with questions about how to dye their hair at home.

There's an upside to this, perhaps. We may be embarking on a self-sufficiency that improves not only our bank account, but reminds us of the value of doing, not delegating.

Or, maybe not.

"I don't think this trend will last beyond the downturn," says Jim Oakley, an associate professor of marketing and consumer behavior at UNC Charlotte.

Oakley tells The Squeeze that behaviors like insourcing - productive and self-improving as they might feel - aren't deep-rooted. When the conditions that cause behavior change, "consumers will return to natural tendencies," he says.

If all of that makes us sound ... weak, well, we are who are we are. But there's possibility for change.

"If the cause for the adjustment is deep-seated and long lasting, the tendency can become a habit," author and consumer behavior scholar Michael Solomon says. "Witness the lifelong distrust of banks (in retrospect, perhaps, well-justified) by people who spent their formative years in the Great Depression. Major events scar an entire generation and often define its values."

So, essentially, to have a real impact on how we conduct our lives, this recession needs to be truly traumatic.

We'll be pulling for the landscapers.


Tell us if you're saving money by doing something you were paying others to do.

Thursday, February 26, 2009

Laurie's story: Worthy of a paycheck

How do you explain the professional value of raising a family to employers - and perhaps, yourself - after years of working at home? It's a question more women are facing as the recession demands they re-enter the workforce.

Laurie Reid is 45 years old, a wife and mother of two. She's lived two decades in Charlotte - a comfortable, but not lavish, life. Now, with thoughtful candor, she faces the fear and challenges that come with her husband losing his job.

We'll be bringing you her story and others from around Charlotte. They are voices that speak to the different challenges that you'll find throughout our city. We want to hear your stories of struggles and successes, too.

Says Laurie:

Inquiring minds want to know if I work outside of the home. Or if I have any plans of looking for work now that my husband is unemployed. To some, I apparently cannot be taken seriously unless I, too, am looking for a job.

I want to put those inquiring minds at ease: the answer is no and yes, respectively.

When my oldest child was 18 months old, I traded in the title of salesperson and have spent the last 10 years managing domestic operations at the Reid residence. But the time has come to turn in my crown and rejoin the work force. The last time I worked outside of the home President Clinton was having an affair with Monica Lewinksy, Theodore Kaczynski was pleading guilty to being the Unabomber, and the iPod was just a figment of Apple’s imagination.

I haven’t updated my resume in ten years, but when I pulled it up on my computer a few months ago I vaguely remembered my life as a sales manager. Apparently I generated new business in the Carolinas while successfully managing projects to ensure that they were on schedule, within budget and met the highest quality standards. At least that’s what my resume claims. Clearly my resume is in dire need of a massive overhaul: it’s dated and irrelevant. But the biggest challenge will be filling in the gap from September of 1998 until the present.

That gaping hole gives my competition, all 11.6 million of them, a huge advantage over me. While the newly unemployed are busy highlighting their leadership skills and giving concrete examples to demonstrate their efficiency, I wrestle with how best to justify my ten-year absence from the workplace.

Raising children is the most difficult job I’ve ever had the privilege of performing. The challenges and rewards are simply mind boggling. It’s difficult to sum up my experience in a few lines and it seems like a cliché to list my responsibilities as handling all the scheduling, finances, and logistics for a family of four. Doing so trivializes the ten most rewarding years of my life. Just as I don’t want to justify my decade-old decision to leave the workforce, I don’t want to come up with a list of my volunteering duties and parenting accomplishments as a way of rejoining the workforce.

Of course the experience and skills that I acquired over the past ten years can be applied to a paying job, but it’s difficult to convince a potential employer of that fact. It’s always been hard for a stay-at-home mom to reenter the workforce. It’s now near impossible given the deplorable state of our economy.

My resume highlights my glory days in sales, marketing and finance, but I’m looking to reinvent myself and hope to avoid that outdated resume altogether. Writing has always been my passion and I am trying desperately to make a living at it. I’ve done my fair share of writing and editing for friends and family, but if I am going to try to make a living at this, I need to stop the pro bono work and start marketing myself and demanding legal tender.

Last year a frequent reader of my blog approached me to edit a book and I jumped at the chance. But putting a dollar value on my services proved to be more difficult than I imagined. It had been awhile since I earned a paycheck based on industry standards and pay scales. When it came time to discuss payment, I felt like the decision was not mine to make and that I should just be grateful for the opportunity. I suppose the mother and chronic volunteer in me felt that it was my duty, my job, to help out and not think about my time as money. Luckily the author not only believed in me, but believed in paying a fair wage.

If I am going to make a living as a writer, I need to believe in myself and my talents. I need to stop looking at that ten-year hole in my resume as a cavity and start looking it as a well of knowledge. It’s hard to think of myself as truly employable after spending ten years away from an office, but I need to get over it.

Over the past few weeks, I’ve received several offers to do various types of writing and editing and I am happily weighing the pros and cons of each. Maybe people are feeling sorry for me because they know my husband is out of work and I could use an extra buck. There I go again, looking for yet another reason why I am not worthy of a paycheck.

I am worthy of a pay check. There, I said it. And I am ready to rejoin the workforce. I’m hanging out my shingle and I’m open for business. Since September of 1998 I have given a lot of myself and reaped enormous rewards, but not a paycheck. It's hard to make the switch, but from this point forward, if you want me, it’s going to cost you.

The other side of banking outrage...

We've all become hawks when it comes to banking excess. Now that our money is helping prop up these teetering titans, we're primed to pounce on the next whisper of year-end bonuses or company retreats.

But what happens when the lens turns back at us - when a little extravagance helps out the hometown?

Wells Fargo is cutting spending on the Wachovia Championship golf tournament that starts in April, Bloomberg is reporting.

Wells Fargo, which acquired Wachovia Corp. in December, has a sponsorship contract with the PGA Tour through 2014. The company is reducing costs of the tournament, including some related to client entertainment, said spokeswoman Mary Beth Navarro, but the specifics haven't been determined.

Until now, the Wachovia has cultivated a reputation on the Tour as a top-notch tournament, from the cars the players drive in Charlotte to the perks their wives get to the swankness of the corporate parties.

All of which might be bothersome in this economic climate, especially when the name in the tournament title is getting billions in bailout aid.

The PGA's elite don't come to Charlotte merely for the pricey perks; the challenging Quail Hollow course and less-cumbersome pro-am setup are two big draws, players say. But the tourney's glossy feel from Thursday to Sunday certainly contributes to the lure - not to mention the puffed chests and good press this city gets each year.

Even if those perks stay intact, cutting some non-player luxuries means cutting back on things local businesses provide. Excess helps stir commerce - in this case our commerce.

It's easier, maybe, to understand why Las Vegas mayor Oscar Goodman is exasperated at public criticism that has caused Citibank, Goldman Sachs and, yes, Wells Fargo to pull out of meetings in his city.

Outrage isn't so simple when the benefits you're sneering at might ultimately benefit you.


Your Morning Edge:

The government is fully back into the student loan business, the New York Times reports.

A list of what President Obama might be cutting when he unveils his budget today, from CNN.

Renting a home isn't so much of an advantage now, the Wall Street Journal reports.

Wednesday, February 25, 2009

Your credit card company seems to hate you - Part 2

In a post yesterday on credit card companies raising rates, increasing fees and even offering $300 to cancel your account, we noted that an upcoming survey from showed that one third of respondents found some sort of negative change on their credit card statement.

Those changes included interest rate hikes, decreases in credit limits and closed accounts.

That survey, from national pollster GfK, was released earlier today.

The most startling number: 66.3 percent don't know if their credit card account has experienced some sort of negative change.

That means that of the survey's 1004 respondents, the only ones who didn't know of a negative change were the people who hadn't checked.

The lesson here - look at all the pages of your statement for any changes. If your rate has been raised, you might rethink leaving a balance on it. If your minimum payment has increased, you might save yourself a late fee for underpaying.

"It goes back to the entire subject of financial literacy," said Adam Levin, a consumer expert at "It's abysmal in this country."

If you do find a negative change - and there's apparently a strong chance you will - your options are limited. You can search for a better terms from another company, but good deals are difficult to find in this climate. You also can call your credit card company and negotiate/yell/weep. (Although credit card companies are increasingly rigid, Levin said, "there may be some who will be reasonable because they're scared to death about what's going on.")

You should not, however, cancel your card, financial experts say. Closing accounts can take dozens of points off your credit score.

Levin recommends looking at all your statements for five minutes each day. Doing so will not only alert you to semi-hidden changes, it might help you recognize spending patterns and issues that could give credit card companies good reason to alter your terms.

"You need to self-regulate," Levin said. "No one has the stake in protecting you like you do."

The 401(k): Have we been conned?

You graduated from college 15 years ago. You got a job, got sensible and started thinking early about your retirement. You contributed to a 401(k), got your company match, maybe 2 percent, maybe 3 - no matter, because everyone was telling you what a good investment this was.

Now, 15 years later, you open up your 401(k) statement, and the amount on the front page is about equal to the total of the contributions you've made. Net gain = zero.

Are you mad? George Miller is.

Tuesday, in a hearing of the House Education and Labor Committee, the California Democrat blistered Wall Street for an elaborate ruse that's persuaded millions of Americans to fatten the stock market and investment industry.

“For too many Americans, 401(k) plans have become little more than a high-stakes crap shoot,” said Miller. “We are realizing that Wall Street’s promises of predictable benefits and peace of mind throughout retirement was nothing more than a con job that would make Bernie Madoff proud.”

The Congressional Budget Office, back in October, estimated that workers lost $2 trillion over a span of 15 months from declining stock markets. Those numbers have surely worsened.

And by the way, the government pumps an estimated $80 billion in tax breaks/subsidies into those retirement accounts each year.

Says Joseph Leonard, The Squeeze's 401(k) expert and an N.C.-based author and investment advisor: "Wall Street has buffaloed us, and the government has stepped in and said, 'Don't take your money out of your 401 (k). Hang in there. Well, if people had taken their cash out (moved investments) months ago, they'd be much better off today."

Miller and guests at the hearing advocated lower-risk savings plans, perhaps run by the government, that guarantee a more modest rate of return. Leonard wasn't so keen on a heavier hand from the government, which already runs one retirement plan - Social Security. "The return on that is only about 1 or 2 percent," he says.

Leonard's advice: Convert your 401(k) to an IRA, which gives you greater control over how the money is invested. Keep contributing to it, because IRAs are tax deferred. If you want the security of a guaranteed return, consider fixed-rate annuities, which offer a smaller payoff but less risk.

Most of all, he says, educate yourself. We caught up with Leonard by phone from Disney World with his three children. "People spend more time planning their vacation each year than they do thinking about their retirement investment options," he said. "Educate yourself about what your choices are. Americans think the only place they can invest in the market, when that's really the only place they can risk their money."

What do you think? Would you prefer the guaranteed return of a Miller-type government plan? Or do you believe the market will rebound to a point where 401(k) plans are worthy again?

Obama's economic speech, graded

A bonus today: Allan Louden, whom readers of last fall know as The Ballot's political professor, watched one more speech for us - Barack Obama's economic address to Congress last night.

Louden, a debate scholar and political communications professor at Wake Forest University, informed and entertained Ballot readers since the primaries with his insightful analysis of ads, speeches and debates.

He expected Obama's state of the union-ish speech to be sober and reassuring. What did he get?

The Professor says:

If one had an ounce of patriotism flowing in their veins, it would be impossible to remain unmoved as the President of the United States was introduced to the chamber last night. Ideology be damned, it felt good to envision a can-do-attitude, an America that works, buoyancy in the face of permeating pessimism.

I have been critiquing Obama’s rhetoric for almost a year now. I noticed my commentary has increasingly been disillusioned with the power of his speeches, or at least his choice for a muted voice.

In that vein, I envisaged his intentional blandness to continue with last night’s speech. State-of-the-Union speeches, in general, have a way of disappointing. The build up is intense; the speeches are often little more than laundry lists of vague policy initiatives, almost guaranteed to disappoint.

Yet what I witnessed was from a rhetorical perspective among the best in this genre I heard, surely since Reagan’s first State-of-the-Union. And it is a truism of those who follow political communication that rhetorical skill often translates into real political authority.

Obama’s “State-of-the-Union” may have been an imitation of the formal address, but he was not a simulation of a president in charge.

Constructing Optimism

The speech began with a positive tone, a compliment to the American character and ingenuity and continued with Obama the positivist, as Obama ticked off a myriad of issues. It was Obama not as magician or allegorical high priest, but rather the logician, the empiricist positing lines of reasoning and facts. Topics were discussed, not exhorted; plain yet cutting in their directness.

This alone describes a speech that should have been tedious and tiresome, yet that was not the outcome in Obama’s hands. It worked. What follows is a selective tour of how Obama amends the commonplace.

Obama used the power of defining that only resides with the president. His words change how we see issues and policy. Even a looming depression was distanced by America’s character:

"The weight of this crisis will not determine the destiny of this nation. The answers to our problems don’t lie beyond our reach. They exist in our laboratories and universities; in our fields and our factories; in the imaginations of our entrepreneurs and the pride of the hardest-working people on Earth."

Donning the role of historian, he defines an “opportunity in crisis,” the inevitability of revival:

"In the midst of civil war, we laid railroad tracks from one coast to another that spurred commerce and industry. From the turmoil of the Industrial Revolution came a system of public high schools that prepared our citizens for a new age. In the wake of war and depression, the GI Bill sent a generation to college and created the largest middle-class in history. And a twilight struggle for freedom led to a nation of highways, an American on the moon, and an explosion of technology that still shapes our world."

Obama never strayed far from the political pulse even as he redefined. Obama scolded bankers and asked for their survival. He summarized, “It’s not about helping banks, it’s about helping people.”

Even the budget was rhetorically transformed.

"So often, we have come to view these documents as simply numbers on a page or laundry lists of programs. I see this document differently. I see it as a vision for America – as a blueprint for our future."


Surely Obama will be criticized for taking on too much, and perhaps that will be the case. Yet Obama has a way of assimilating issues so they are not separate schemes but entwined in a larger portrait. Energy, health care, and education meld into a consistent whole; product of our national character.

Energy becomes innovation, Health care becomes fiscal responsibility, and Education becomes the promise to our future; values that inhere in the nation’s fabric, each inviting individual promise and participation.

The speech was serious but not calamitous. There were no signs of gloomy foreboding, more a rendering of a nation we would hope to inhabit. The greater parts of the speech were moments of toughness and sobriety, yet there remained room for genuine humor. As in life, and not politics, the speech showed an amalgamation of strict and forgiving.

The address was demonstrative, never pleading. Obama did not so much ask Congress for their cooperation but issued a statement of how-it-is. Obama exhorted “this truth”--those called to serve, entrusted by the people—are responsible to history and “the spirit of the people who sent us here.”

He closed with stories of the Florida banker who gave his considerable bonus to his employees, his friends; how a devastated Kansas town rebuilt it hope in sustainable ways; of a South Carolina school child who embraced the possible and demanded the same of others. Congress was instructed to get on board, to channel the spirit of those who empower their Washington presence.

"[T]hese stories tell us something about the spirit of the people who sent us here. They tell us that even in the most trying times, amid the most difficult circumstances, there is a generosity, a resilience, a decency, and a determination that perseveres; a willingness to take responsibility for our future and for posterity."

Unlike speeches of the last few months, Obama’s rhetoric soared in the closing, inspiring, rarifying our better angels. It felt good.

". . . if we come together and lift this nation from the depths of this crisis; if we confront without fear the challenges of our time and summon that enduring spirit of an America that does not quit, then someday years from now our children can tell their children that this was the time when we performed, in the words that are carved into this very chamber, 'something worthy to be remembered.' "

Obama’s hope of earlier primary speeches returned, and appropriately.

Grade: A

Tuesday, February 24, 2009

Downturn Upside: A recession-proof industry?

We were not surprised to hear recently that bankruptcy attorneys are finding the recession very lucrative, nor did we raise our eyebrows at the report this month that firearms sales have increased 28 percent from a year ago.

But this item startled us: Craft beer brewers are reporting an excellent 2008, with sales up 5.8 percent by volume and 10.5 percent by volume.

Even more striking: small brewers increased their overall share of the U.S. beer market from 3.8 to 4 percent. The numbers run counter intuitive to recession trends, in which people are cutting non-essentials, or at least opting for a cheaper version.

"2008 was a historic year for beer, with the large brewers consolidating and imports losing share, while the top ten selling beer brands dropped in sales," said Paul Gatza, Director of the Brewers Association. "At the same time, small independent craft brewers continued to gain share and attention."

Perhaps such news is testament to the power of the splurge in these tight times.

Tell us what you haven't yet given up.

Bad day of economic news. Good lineup of local help

A dour procession of economic news arrived today - from a consumer confidence free fall to tumbling home prices to poor earnings reports from major retailers.

What can you do if the bad news touches you? Below, a lineup of upcoming local job events and workshops.

First, the news, in three takes:

1) The New York-based Conference Board said its Consumer Confidence Index, which was down slightly in January, plummeted more than 12 points in February to 25, from the revised 37.4 last month, the AP reports. That was well below the 35.5 level that economists surveyed by Thomson Reuters expected. The index, which had hovered in the high 30s over the past few months, broke new lows since it began in 1967. A year ago, the consumer confidence reading stood at 76.4.

Economists carefully monitor consumer confidence since consumer spending accounts for more than two-thirds of economic activity. Signs of a further collapse in consumer confidence is bad news for the economy and stores, whose success hinges on them being in the mood to spend.

2) Home prices in 20 U.S. cities declined 18.5 percent in December from a year earlier, the fastest drop on record. In Charlotte, prices took their steepest decline yet, down 7.2 percent from a year ago.

3) Retailers' fourth-quarter reports reflected Americans' financial worries. Macy's Inc. reported an almost 59-percent drop as results were hurt by weak sales and one-time costs associated with the consolidations of regional divisions and store closings. Target Corp.’s profit fell 41 percent due partly to credit card woes. The Home Depot Inc., which has suffered under the weight of the collapsing housing market, reported a loss of $54 million mostly due to its plan to shut its four smaller home-improvement brands.

Federal Reserve Chairman Ben Bernanke said the economy is suffering through a “severe contraction” that's likely to keep shrinking in the first half of this year. He's hopeful, but hedging, that the economy will begin to improve by the end of 2009.

What can you do to equip yourself best?

Central Piedmont Community College is hosting Resources for Changing Times next Monday, March 2. The event is a one-stop resource for local professionals who have lost their jobs or are in fear of losing their jobs. City and county agencies, plus local universities and colleges, will discuss area resources for jobs and benefits, and Charlotte-area executives will lead panels on careers. The event also will include workshops on career planning, job searching, as well as soft skills how to handle the stress of losing your job. March 2, 9 a.m. - 6 p.m., CPCC's Harris Campus.

UNC Charlotte is hosting Moms Corps - a one-day event next Wednesday designed to help women navigate the professional world and changing workforce. The event, sponsored in part by our (newly designed) MomsCharlotte, features three speakers, including former WCNC meteorologist Terry Bennett, who will discuss juggling working and motherhood. March 4, 9 a.m. - 12 p.m.

Bobcats Sports & Entertainment is hosting a career fair Friday at 2:30 p.m. on the main concourse at Time Warner Cable Arena, featuring 23 companies who are hiring for a variety of jobs, including sports positions. Registration fee is $20, which includes tickets to that night's Bobcats-Orlando Magic game.

From our news partner, NewsChannel 36, a list of job search support groups, with contact info and meeting times.

Why your credit card company seems to hate you

The relationship between you and your credit card company may have just become a little more fractious.

A report yesterday from the online site - confirmed by other media outlets - says that American Express is offering to pay some customers a $300 gift card to close their accounts. Those customers, who will receive notification of the offer by mail, must agree to pay off their revolving balances by April 30, and they will forfeit all rewards points.

In short: American Express is handing out scissors to cut up their cards.

On its Web site, Amex explains this extraordinary measure as helpfully giving customers the chance to "simplify your finances." Doing so also helps Amex reduce risk of defaults, which continue to burden credit card companies as the recession deepens.

Why doesn't Amex just close the accounts? Giving $300 to the customer encourages them to pay down revolving balances, so Amex wins both ways.

It's the starkest of several measures credit card companies are taking to cut debt and lessen risk, including an apparent increase in customers seeing their interest rates suddenly spike, even if they've kept current on all their payments.

"It's pretty much everybody now getting those increases," says Emily Peters of San Francisco-based "A year ago, it was just the good customers who had balances and low rates."

Peters suggests checking recent statements to see if your credit card company has been nibbling in other ways. In a survey to be released next week, says that one third of respondents found some sort of negative change on their credit card statement, such as an interest rate change or increase in fee. "Imagine how many people might not be tuned into that," Peters says.

What are your options if your interest rate spikes? Not many. You can hunt for a better rate on another card, but good deals are difficult to find in this climate. You can call your credit card company and negotiate/yell/threaten to cancel your card - but even the best customers aren't as valuable as they once were.

What you should not do is work yourself into a huff, nor think too hard about banks taking billions of bailout dollars only to stifle the commerce this economy needs by jacking up rates, and decide to cancel that card in protest. Closing accounts (including you, Amex card holders) can take dozens of points off your credit score.

The best option? Pay off your revolving balances, so high interest rates become meaningless.

Then remember the increase when the economy improves and the credit card company begins to like you again.
Tell us your credit card story. Had a big rate hike recently? Find some new fees?

Monday, February 23, 2009

The Art of the Farewell E-mail

You've probably thought about your farewell email - the people you'd like to thank, the people you'd like to ... not thank.

We've had our share of electronic farewells here, as have so many businesses. I've appreciated the shorter goodbyes, the splash of humor, the glad-we-shared-this-space. I've winced at the longer missives, the career recaps, the pain-between-the-lines.

Today's Los Angeles Times explores this too common form of communication. Some goodbyes are brief. Some are angry. Some are memorable for reasons good and bad.

One viral 2007 example, from a JP Morgan employee: “Dear Co-Workers and Managers,
As many of you probably know, today is my last day. But before I leave, I wanted to take this opportunity to let you know what a great and distinct pleasure it has been to type “Today is my last day.”"

Experts warn against these emails, which might be temporarily gratifying, but are forever public. Their advice, and ours: Keep it nice. Keep it brief. Be funny if you're funny (but not if you're not), and include some contact info. The people who want to keep in touch with you already know everything else.

If you need a guide - and we hope you don't - use this, from another newspaper writer:

"Thanks to all who said Hi in the hallway, who made me smile, made me feel appreciated or made me grow professionally. I hope I was able to add something to your time here, too. If I didn't, I'm sorry. Good luck. God bless. And thank you."

Tell us if you've written - or read - a memorable email farewell.

Obama's big speech: A call for responsibility?

He's been too somber, some say. Too dire. "Yes, we can" is now "Yes, we're in deep trouble."

Of the criticisms Barack Obama has faced early in his presidency, one constant is tone. In warning Congress and the rest of us about the necessity of stimulus and rescue plans, he has fatigued many Americans who already are fretted, who already feel the weight of our uncertain future.

Tomorrow night, in what is effectively his first State of the Union address, Obama faces a prime-time challenge. How firmly does he continue to shake our shoulders with the truly significant troubles this economy is facing? How does he turn our vision forward - not with the sunny sentence or two that he's offered in some speeches, but a full accounting of where he is pointing us, and why that will work?

(Update: One clue, from the Associated Press: Obama pledged today to cut the budget deficit in half by the end of his first term in office. The promise accomplishes at least two things. It attempts to answer fears and criticisms that his stimulus and rescue plans will leave us with overwhelming debt. It also previews a possible theme for tomorrow - that if his administration is willing to make hard choices and sacrifices, we should be ready to do the same.)

(Update N0. 2: Our political professor, Wake Forest's Allan Louden, says Obama should stick with the steady and sober.

Louden, a renowned political communications scholar, says:

Obama’s speech tonight, while not a formal State-of-the-Union, is taking on the trappings of the formal address. A joint session of Congress will gather tonight, pay homage, and go about their business shortly after the president departs the hall.

Obama’s reason for addressing congress, like most modern day State-of-the-Union speeches, is not to address congress but rather to pressure lawmakers by “Going Public,” If congress were the direct target there are more direct lines of communication, less fraught with expectations and opposition ammunition.

“Going Public” can delineate the civic debate, but also can be overdone. Effective presidential speech making seemingly has the greatest sway when the speech wakes-up latent public concern. A breakthrough speech usually assumes the need to refresh public response; a megaphone calling out a dormant citizenry. But that is not the world Obama encounters tonight.

Currently we have a media saturated political culture, a public already at full attention to economic crisis, and a president who seemingly speaks daily to the people. The risk for tonight’s speech is one of overexposure. Pundits are lining up proclaiming what Obama much accomplish tonight, while the reality is the speech will likely be forgotten in the next news cycle.

Obama is better off reinforcing a sober reassuring, albeit dull, speech. His steadiness is a more central message than fulfilling short term political expectations.


What do you want to hear tomorrow night. What balance do you want of hopeful and sober, itemized and inspirational? Tell us here or in the comments.

Pay attention to the canaries

Earlier this month, when the time finally came to let go of his last worker, Gregg Fellmann wore sunglasses. He knew it would be difficult, maybe too difficult. He didn't want the man to see him crying. 

Fellman is a ceramic tile installer, a small business owner, one of dozens at the Charlotte Convention Center this past weekend for a builder and home remodeling expo. Landscapers and hardwood floor companies and cabinet makers, struggling but enduring, for now. 

They are the canaries of this recession - among the first to be struck by the withering economy, but perhaps the first who will know when people are buying, and we can exhale, again. 

They also are the quiet engine of commerce, men and women who took a chance, put their name on some letterhead, and for years found success in this growing city. But by autumn 2007, builders had stopped building in Charlotte. Homeowners were cutting back on non-essentials. Business fell off as dramatically as many here had ever seen. 

Soon, the owners had no choice but to let go of workers. Adam Simpson, who had grown his stone landscape business to 30 employees since moving to Charlotte from Florida nine years ago, was forced to lay off half of them. "It was hard," he says. "Most of my guys have been with me for years."

But in this recession, some who are surviving are finding a reminder of why they had started on their own. Gregg Fellman started laying ceramic tile 26 years ago, in high school. He apprenticed with a master craftsman, got his own home improvement license in New York state, then started his own business in 1986.

He moved to Charlotte 10 years ago, opened a small showroom, saw his business grow to 10 employees. Now there are just two - he and his wife, Christine - and he is digging in, hustling for work, plowing through his anxiety the same way he did two decades ago. "I'm getting back to my roots," he says. It is, for some, oddly invigorating.

Now, throughout the Expo hall, they are wondering if things might be improving. Customer traffic has picked up just a little in the past two weeks, many say. Could be that it's the business that comes with warming weather. Could be that something bigger is beginning to stir. They're not sure. 

Pay attention to them, the canaries. Lawn companies and cleaning services and remodelers. They are not laying off workers to please stockholders or make huge debt payments. They are simply profit and loss - and when they begin to get busy, and make money, and hire workers to make more, we will know we are moving toward something better.

"I think I'm seeing that light," said Gregg Fellmann, and he looked at his wife, who was nodding.

"We're optimistic," he said. "We have to be." 

Friday, February 20, 2009

New economy poll: We're worried

Yes, we knew that. But the numbers are stark.

A new Associated Press poll shows that about twice as many Americans are worried about losing their jobs than at this time in 2007.

In a nationwide survey taken this month, 47 percent of Americans said they were at least somewhat worried about job loss. More striking: three-fourths of respondents say they know someone who has been laid off in the past six months because of the recession.

The difference in the percentage of worried Americans can be found in those making $50,000 or more. Last year, only 20 percent of those earning $50,000 or more fretted about joblessness (as did 35 percent of those earning less than that.) Now, the number is 47 percent for each category of earning.

Americans also are unnerved about their retirement - more than half, 53 percent, aren't confident they'll have enough money to live comfortably in retirement, up from a third, 34 percent, in February 2005.

That worry, however, isn't translating thus far into cynicism about President Barack Obama or his stimulus plan. While Obama's approval numbers have taken a dip, they're still at 67 percent. Support for his stimulus plans are at 52 percent, slightly down from 55 percent a month ago.

(Your poll externals: The AP-GfK poll was conducted Feb. 12-17 and involved landline and cell phone interviews with 1,001 randomly chosen adults. The margin of sampling error was plus or minus 3.1 percentage points.)

The Responsible strike back

The cry has gone up in the days before, but especially the moments after, Barack Obama announced his housing rescue plan Wednesday.

It's come from people who took out safe mortgages they knew they could afford, from consumers who haven't overspent and overdebted, from parents who wonder how far we have to go to clean up the messes of people far too old to leave them in our laps.

"We have done everything right," wrote Kenneth Gistedt of Clover in an email this week, "and we lose out."

Today, in a column titled "Money for Idiots," New York Times columnist David Brooks says Barack Obama's housing plan - and George Bush's bailout before it - "have compensated foolishness and irresponsibility."

Such complaints have not come only from conservative-leaning columnists like Brooks. In fact, it's an anger not defined by politics, by being a Republican or Democrat, a believer in government or a skeptic of it. It has to do with consequences and who faces them.

The bailouts, from Bush's to Obama's, have penalized the responsible and reward the risks of the irresponsible, the angry say. The TARP, they were told, would loosen lending, but it didn't. Now we're moving on to a mortgage bailout, in which the government is going to save the homeowner with little income who took out an interest-only loan for a $120,000 home, as well as the brokers who took a chance on fraudulent mortgage-backed securities.

These and other trillion-dollar proposals transfer the consequences of a relatively small group's actions to everyone - including those who have been religiously putting money into 401ks, 529s and a mortgage payment on a home within their means.

And ultimately, it has to be done. Brooks acknowledges that the economy is something we all share, including the foolish and greedy. If we don't stabilize their lives and their institutions, ours will not stabilize, either.

That process will be trying - and the reaction will sometimes be divisively over-the-top (including this already viral CNBC clip earlier today.)

But there also are some larger, thoughtful worries, heard often this week from our readers and so many others. Is solving debt issues with more debt a wise approach? Are we doing enough to discourage the same bad decisions from being made again? By bailing out and injecting capital and buying bad assets, we've told everyone it's OK to make a big mess. In fact, some are surmising, it might be better to make a big mess than a small mess.

Because, they wonder, if you make it big enough, won't everyone else have to clean it for you?

Tell us what you think.

Your Morning Edge:

Something new to worry about, CNN says: Deflation.

Who's eligible for the mortgage rescue? That's still being decided, the Washington Post reports.

The stimulus makes COBRA health coverage more affordable, the Wall Street Journal reports.

Thursday, February 19, 2009

Downturn upside: Shark attacks dip in recession

You want good economic news? We have your good economic news.

Shark attacks worldwide dipped last year to their lowest level in five years, a University of Florida researcher reported today.

Last year saw 59 shark attacks around the world, compared to 71 in 2007, said George Burgess, an ichthyologist and director of the International Shark Attack File, which is housed at the University of Florida's Museum of Natural History.

The number of shark attacks in the United States dropped from 50 in 2007 to 41 last year, Burgess said. Of those, 32 were in Florida, the same as the previous year, followed by North Carolina and South Carolina with three each; Hawaii with two and California with one.

Burgess believes the recession may be responsible for the decline in shark attacks.

"I can't help but think that contributing to the reduction may have been the reticence of some people to take holidays and go to the beach for economic reasons," Burgess said in a news release.

On a related note, the New York Times explains how you can use the recession as a multi-purpose excuse.

(hat tip: AP)

Should you even look at your 401(k)?

It's the telltale heart of financial statements, sitting in your mail pile, tormenting you. Opening your 401(k) right now could lead to any number of emotions - none of them good. So should you bother?

Joseph Leonard, The Squeeze's 401(k) expert, understands. He is the author of the book "The Retirement Vault: A Guide to Protecting Your Assets in an Age of Uncertainty." He also is CEO of Coastal Investment Advisors, based in Southport, N.C.

We caught up with Leonard for five solid tips about your 401(k):

1. What happens to my 401(k) money if I lose my job?

When someone loses their job, many of their benefits remain intact. You can never lose your 401k just because you lost your job. Obviously, your former employer is no longer responsible for matching any contributions that you may make, but the account itself will remain intact.

In some situations, a new employer may begin matching contributions into your original 401k. More often, you will want convert your 401k to an IRA. Converting to IRA does not force you to pay any taxes or change any of your limitations. It simply gives you more freedom. Your money will no longer be in the company’s 401k fund and will no longer be managed by that particular company's selected fund manager. You instead will either choose your own broker or manage the account and its holdings yourself.

2. Can I still contribute if I was fired (Do I even want to?)

You could still contribute, however you will no longer receive a match from your former employer. Convert your 401k to an IRA and contribute up to the tax limitations. Always remember that even though the account may be going down, you want to be stockpiling as much money away as humanly possible towards retirement. Anything that you contribute to a 401k or an IRA is tax deferred and has the opportunity to grow tax deferred until you begin to pull funds out.

3. Should I just withdraw my cash and stuff it under the mattress?

In no circumstance is the best solution to simply draw out your cash and hide it away. First of all, you will be taxed at whatever rate the funds would put you at for that year. If you are not at least 59 ½ year old, then you will also incur a tax penalty on top of the taxes due.

If you are concerned about the diminishing value of the funds inside your account then there are many superior solutions to liquidating the account. You could have all of the funds inside of your account converted to cash or money markets without physically pulling the money out of the account. You could also think about rolling the account over from your current institution into some sort of either fixed or fixed indexed annuity to avoid any more losses.

Keep in mind, even if the stocks and mutual funds which you have inside your account have dropped very low, you still own those stocks and mutual funds. Your overall goal is to have those particular investments rebound over the next few years. If you are already in retirement and drawing an income off of these investments, then it may be time to seriously look at fixed rates and annuity rates available to you. In a retiree’s portfolio, guarantees can be superior to potential large returns.

4. Should I even open the monthly envelope and look at my 401(k) statements?

More and more people have been making the comment lately, “I don’t even look at my statements anymore!” In these stressful times, that's certainly an understandable position for someone to take. Many people have gradually watched their account values be cut nearly in half over the past year.

Honestly, I believe that it's a mistake not to read your monthly statement. If you're still in your working years, perhaps it would be a good idea to look at the actual funds that you have selected in your portfolio. It may be a good time to look at buying some high end, blue chip stocks which were too expensive for you a year ago and are now at record lows.

If you're retired and drawing off of your 401k or IRA, then it's more important that you review every statement you receive. You absolutely must know what you have left to work with, which in turn will dictate certain aspects of the lifestyle you choose to lead.

If you find yourself constantly stressed out over the statements that you receive, then you really need to consider rolling those accounts out of securities. You may need to look a little more towards available fixed rates. If you still want potential for growth beyond a fixed rate, you may want to consider some indexed annuities which will offer a fixed rate on the down side, but offer market returns in up years.

5. Should I take my 401(k) contribution and temporarily move it to a money market for some short-term earnings?

If you are already in retirement and are counting on your accounts to supplement your retirement, then yes, finding the highest available fixed rates or money market rates may be your best option. Many people who retired within the last two years had grown very accustomed to riding out down trends in the market. Many of these same people find that when they are no longer receiving an income, it becomes increasingly difficult to deal with the constant ups and downs in the market. To this group I would say simply, you need to figure out what portion of your money you know for a fact you cannot lose and then look for superior ways of protecting it.

The elusive bottom

How will we know when we've hit bottom?

The short answer: We won't.

The National Bureau of Economic Research - the keepers of business cycle dating - usually doesn't call the date on recessions beginning or hitting bottom until months after we get there. That's fine for historians; not so much for our hunger for optimism.

Instead, we are left with speculation from analysts and economists, who will be back at it today with the weekly jobs report - a critical indicator of our economic health - that showed 627,000 new unemployment claims, same as last week but worse than expected.

(UPDATE: The New York-based Conference Board said moments ago that its January index of leading economic indicators rose 0.4 percent, the second straight monthly gain. Economists surveyed by Thomson Reuters expected no change in the index, which forecasts economic activity for the next three to six months based on 10 economic components. Conference Board economist Ken Goldstein says the “intensity” of the recession could begin to ease in the next few months.)

Some analysts have speculated that a bottom might be approaching soon, perhaps in the late spring or summer. Their reasoning? While we're still getting little but bad news, it hasn't been as bad as the news that preceded it. A warning, however: Economists were saying the same thing last spring, and last fall.

(Or not saying much at all. In one of the few viral economic videos out there, here's former Treasury Secretary Henry Paulson, at a November conference, attempting to answer the bottom question.)

The Fed, in the midst of somber manufacturing and housing reports yesterday, said the economy will continue to contract through 2009. But the government, too, has been regularly missing the dartboard in the past 18 months.

Among the clues the bottom has arrived - or that we landed recently - is a leveling off of jobs losses and housing indicators, as well as an increase in energy prices as Americans start to consume more.

We checked in with our economics expert, UNCC's John Connaughton, who was wise enough not to make a prediction but said he was encouraged that January retail sales were up slightly over December.

"All major categories were up compared to the December levels," he said. "Bottom line, consumers are beginning to buy, and if they can get credit they may also begin to buy autos. The ball is now in the Feds hands as the consumer has indicated they are ready to buy. The question now is can the Fed get credit to the average buyer?"

Your Morning Edge:

Have bailout fatigue? George Will does.

The housing rescue plan also has left the uninvited angry, the Wall Street Journal reports.

From Slate: Why Obama's foreclosure plan will be harder to accomplish than it sounds.

Wednesday, February 18, 2009

The foreclosure plan: What's in it for Charlotte?

The $75 billion Homeowner Affordability and Stability Plan, which President Barack Obama unveiled moments ago in Arizona, carries two components that directly target foreclosure problems stifling Charlotte's housing market and economy.

Headlining the proposal is a plan that would provide incentives to lenders to cut monthly mortgage payments on troubled mortgages. If a lender agrees to modify a mortgage so that payments are no more than 31 percent of a homeowners income, the government will make up some of the gap between the old payments and new payments.

Why would lenders agree to participate? Doing so will help prevent the foreclosures that were at the heart of the current financial crisis, the White House says. But just in case that's not enough motivation, mortgage servicers will receive an up-front fee of $1,000 for each eligible modification meeting guidelines established under this initiative, the White House says. They will also receive “pay for success” fees – awarded monthly as long as the borrower stays current on the loan – of up to $1,000 each year for three years.

Another key part of the plan: a new program aimed at helping homeowners said to be "under water" — owing more in principal than their home in currently worth. Such mortgages have traditionally been almost impossible to refinance. But the White House said its program will help 4 to 5 million families do just that by loosening restrictions on those loans.

Details on how to participate in these programs will come within the next two weeks.

Both components could especially benefit cities like Charlotte, where foreclosures struck not because of a burst housing bubble or job losses, but because homebuyers were offered and accepted mortgage terms they ultimately could not afford.

Those homebuyers are largely located in a crescent of starter-home neighborhoods that threatens to squeeze the city's economy from its perimeter. Already, the damage has rippled into surrounding neighborhoods, where property values are dropping. Even stable neighborhoods/markets are stagnant throughout Charlotte, in part because people are unable to move in without selling their homes in potentially troubled areas.

Said Obama: "In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to deepen."

An important note for this banking town: Obama said his administration would "continue to support" reforming rules to allow judges to alter the terms of mortgages in bankruptcy proceedings. Lenders have bristled at this possibility.

How forcefully will Obama back such legislation? The threat of such support might be enough to convince lenders to take part in the proposal made today.

About that teaching backup plan ...

Disappointing but unsurprising news for those contemplating a Plan B in the classroom.

Charlotte-Mecklenburg Schools' annual job fair, to be held April 18, has been canceled because of job cuts the system is confronting this year.

In a report to the school board this week, Chief Operating Officer Hugh Hattabaugh cited "unfamiliar challenges" facing the system. Those challenges are twofold, Hattabaugh told me Tuesday: short-term student growth is projected to be minimal, negating the need for more teachers, and the system must shed significant jobs. Last week, Superintendent Peter Gorman told the board that 1,200 CMS jobs - a third of them teaching positions - might have to be cut.

The cuts will create a glut of teaching applicants in the area. Already, CMS has a significant reserve; the job fair drew more than 4,000 last year, the largest turnout ever, and the economic downturn seems to have prompted an increase in job seekers. "Anytime we have an opening at a school, we see a large number of applicants," Hattabaugh said.

That interest includes the Lateral Entry Program, which helps skilled individuals outside the school system become teachers.

Hattabaugh said the system will continue to cultivate relationships with local colleges and universities, often a supplier of young teachers, and he said CMS is always on the lookout for potential Lateral Entry participants. The areas most in need include math, sciences, and languages.

But for now, there are few jobs even for the most-qualified professionals.

"It's not a local issue," Hattabaugh said. "It's a national issue. School districts all over the country are facing these same things."

Your Morning Edge:

Few countries are being spared by the economic crisis, the Washington Post reports.

Small business are staying alive by bartering their services with other businesses, the Wall Street Journal reports.

Deal of the Day, from MomsCharlotte Deal Diva Tara McAlister, is a $1 special from, which allows you to check state court records and criminal data ranging from traffic violations to felonies. Special runs Saturday and Sunday. Snoop away!

Tuesday, February 17, 2009

Obama signs "most sweeping economic recovery package"

Promising that more federal help would be necessary - but that long term fiscal responsibility was critical - President Barack Obama signed a $787 billion economic rescue plan into law moments ago.

"We have begun today the essential work of keeping the American dream alive in our time,"Obama said in a superlative-filled speech in Denver that laid out some of the broad policy goals he hopes to accomplish.

The bill, which is designed to spur consumer spending and create millions of jobs, is "the most sweeping economic recovery package in our history," he said, noting that it also marked the "largest investment in education in our nation's history," as well as "the biggest investment in research funding," with tax benefits that are "the most progressive in our history."

All of which, said the president, was necessary in these dire economic times. "Today marks the beginning of the end..." he said. "The beginning of the first steps to set our economy on a firmer foundation."

To Republican lawmakers, who largely balked at scope of the package, Obama noted that the plan was a balance of tax cuts and investments. Regardless, it drew no GOP votes in the House and only three in the Senate.

Another concern: Many private economists are forecasting that the budget deficit for the current year will hit $1.6 trillion, including the stimulus spending. That's about three times last year's shortfall, and such year-to-year deficits contribute toward a mounting national debt.

"We need to begin restoring financial discipline and taming our deficit in the long term," Obama said.

Obama promised that bill would come with transparency to taxpayers. To that end, the White House went live today with a Web site,, that will allow people to track where the money is being spent.

The bill provides a $400 tax break for most individual workers and $800 for couples, including those who do not earn enough to pay income taxes. It dishes out tens of billions of dollars to states so they can head off deep cuts and layoffs. It provides financial incentives for people to start buying again, from first homes to new cars.

And it provides help to poor people and laid-off workers, with increased unemployment benefits and food stamps, and subsides for health insurance. It also pumps money into infrastructure projects, health care, renewable energy development and conservation, with twin goals of short-term job production and longer-term economic viability.

Obama chose the Denver Museum of Nature & Science for his speech, underscoring the investments the new law will make in “green” energy-related jobs. Introducing him was Blake Jones, CEO of Newmaste Solar Electric, who said the bill would allow his company to increase its workforce by 10 percent this year and 40 percent by 2010.

Tomorrow, in Arizona, Obama will unveil the next part of his rescue effort – a plan to help millions of homeowners avoid foreclosure.

The Biggest Cheapskate in Charlotte?

I began to take note of James Standyck when he sent me the bar chart of his gas and electric costs of the past three years.

Before then, he was merely one of several readers emailing me tips on how to save dollars and pennies in this difficult economy.

But the bar graph, well, it was pinching to behold - a month-to-month illustration, colored in dark greens and light greens, with some nifty shadow effects.

It's almost as impressive as his energy savings video.

Say hello to the Biggest Cheapskate in the Charlotte Area. At least we think he is. If you can top it - or know of someone who can - tell us.

For now, it's a title that Standyck wears proudly. "Living good," he says, "on a short budget."

He is 49 and married and works full time as an X-ray technologist. He has always been thrifty, he says, but he became especially watchful of his outgoing dollars a couple years ago, when the economy began to stagger and his wife lost her job.

He has a well-rounded game plan - "every bill and mortgage," he says. He asks for discounts on phone bills and cable bills. He goes to financial planning lectures - not so much for advice, but if they are offering a free meal to listen.

A sampling of his X's and O's:

On food: "We primarily buy only items that are on sale and only items that we use or eat. Nothing goes to waste. - especially over the past year. When toilet paper goes on sale we buy lots. Last year Harris Teeter mailed us 40% off coupons for three months. One coupon for each week of the month. In most cases, we would only buy meat that was discount - day old meats that were sold at 50% off the regular price. Add in the 40% off coupon and we gave been getting meats at 30% of the original cost. We bought a lot of the discounted meats and filled our freezer section of our fridge."

On utilities: "We installed a programmable thermostat that only heats or cools when we are home. Often during the warmer months we suffer by wearing light clothing in the house and setting cooling to 74 to 76 degrees. This past winter ad well as previous winters, we wear warm clothing- sweatshirts in our home, turning the heat down to 64 for most periods of the day. Another thing I did was to turn the hot water heater down so that we don't mix cold water to take a shower. ... Additionally, based upon conversations with my extremely green friend, we unplugged all vampire energy suckers (appliances he doesn't use) and the door bell."

On driving: "(We're always) using the cruise control on the highway, planning our trips to the grocery store, dump, not wasting a mile on side trips or duplicate trips to the grocery store."

Now, you might be thinking there's nothing revolutionary here. But Standyck stands out because of his commitment to the cause - an attentiveness to detail that borders on obsessiveness. All the greats are driven in ways we aren't.

Plus, he gets results: A 25 percent savings - or $277.66 - in his 2008 electricity bill from the year before. A $40 savings in gas in 2008 despite the sharp increase in prices. He hopes to be debt-free, other than his mortgage, by June 2010.

"Cheapskate I am," he says.

But: "Doing all this ain't magic."

Which makes it that much more impressive - and instructive to the rest of us. Can you top it?

"We've put off even having kids..."

The Squeeze is a week old, and we've learned this about our readers: They are passionate and compassionate (and sometimes not.) But in their comments, you'll find real pain, real fear, real thought about how our lives are changing.

From one reader, an anonymous commenter:

We've put off even having kids until this depression subsides. If it lasts too long we may not ever have kids. We couldn't bring another life into this world the way things are right now.

In a poll released this past week by Penn, Schoen & Berland Associates, almost a third of respondents said they are likely to put off having a child until the economy improves. (One fifth said they are likely to hold off on marriage.)

Economic downturns have consistently prompted declines in the U.S. fertility rate. Birthrates dropped their lowest point this century after The Great Depression, then plummeted again to a post-World War II low in 1976, after a recession and oil shortage.

Children, perhaps more than any decision we make, come with personal and financial entanglements (and yes, of course, joy). Do you consider a one-income family - or one plus part-time - when the child arrives? Do you buy a bigger house, or any house, to accommodate a growing family?

Or, do you just wait?

(Here's a calculator to determine the smaller costs for the first year alone. If you want to be fully intimidated, how does $600,000 sound as an infancy-to-college price tag?)

Tell us if the economy is influencing your decision to have a baby - or if it's postponing another kind of major decision.

Your Morning Edge:

Another recession casualty - annual business meetings and conferences, the New York Times reports.

And also, festivals, reports the Wall Street Journal.

Gas is getting expensive again. CNN explains why.

Monday, February 16, 2009

Beep-bwop-beeeeep! Dial-up gets a 2nd look in recession

You know the cost-cutting drill. You write down your monthly expenses, item by item. You scratch out the fixed costs - mortgage, car payments. You look for places to cut, but more so places to trim a little.

This one always stands out: Broadband - $35-ish.

With the bottom line in mind, more consumers are giving a dial-up Internet connection a second look, the Associated Press reports today. It's part of the quality vs. cost calculations many of us are making in the downturn.

Yes, dial-up is finger-drummingly slow, but it's adequate for basic Internet tasks such as e-mail, news surfing and shopping. Tasks such as streaming or video require more bandwith, but cost-conscious customers are weighing that luxury versus this calculation: $35 monthly for broadband vs. $10 or less for dial-up.

Make no mistake, says the AP: Only 9 percent of Americans use dial-up, which isn't likely to make a big dent in the broadband market.

"Dial-up is declining overall, but that doesn't mean it's not still a viable business," said Kevin Brand, senior vice president of product management at EarthLink Inc., which has cut its dial-up to $7.99 in an effort to woo those on tight budgets "There's still a big market out there, and during these tough times, even customers who have bundles including broadband may be looking at their bill and thinking, 'Do I really need all this?' "

Have you made a similar quality vs. cost decision - with anything on your budget? Tell us about it.

Laurie's story: The elephant in the room

What do you say to a friend whose family faces sudden financial difficulty?

Laurie Reid is 45 years old, a wife and mother of two. She's lived two decades in Charlotte - a comfortable, but not lavish, life. One day late last year, her husband came home with news he'd lost his job. Now, with thoughtful candor, she faces the fear that comes with loss of her household's only income.

We'll be bringing you her story and others from around Charlotte. They are voices that speak to the different challenges that you'll find throughout our city. We want to hear your stories of struggles and successes, too.

On the elephant in the room, Laurie says:

Not everybody who learns that we are the latest victims of the economic downturn is comfortable talking about it, much less acknowledging it. Instead, they do an awkward dance in an attempt to avoid the topic. They concern themselves with relatively small and irrelevant matters instead of addressing the big looming one at hand...the lay off. And in the process, it becomes much bigger and more cumbersome than it actually is.

So I'm doing a public service announcement: do not be afraid to talk about the layoff. Repeat after me: “I am sorry to hear about the job, good luck finding a new one.” Done. You don't have to say anything more than that one simple sentence. We do not expect you to fix the situation, but it would make things easier for all parties if you would simply acknowledged it. We promise not to drag you into an ugly "life sucks" conversation. Getting laid off is certainly not the worst thing that has ever happened to us and if you give us a chance, you will see that we are in pretty good spirits. It is also probably worth mentioning that being laid off is not contagious. Therefore, expressing your condolences does not make you more susceptible to coming down with unemployment. End of public service announcement.

I will add that most of our friends and neighbors have gone above and beyond the call of duty. The day after my husband lost his job a friend showed up at our door with homemade chicken soup. It warmed our hearts and warmed our tummies. That same day my sister (who does not cook) whipped up a batch of delicious muffins and delivered them fresh from her oven to our door. We had one neighbor drop by with the makings of a top shelf martini with a note that read, “We are all in this together.” We've received cards, calls and e-mails, suffice it to say, we are feeling the love.

My husband, who has a tendency to see the glass half full, is looking at this layoff as a wonderful opportunity to find his dream job. He feels as if he’s been given a new lease on life and has embraced it like a gift. I will not go so far as to call this an opportunity, because quite frankly I liked the opportunity that came with him being employed, but I will take this time to scrutinize my current lifestyle. Aside from looking for a job of my own, I am looking for ways to downscale and regroup. Nothing like a fresh cup of perspective to realize that I took a lot for granted when we had a weekly paycheck. We're not down and out (yet) so I am going to try to break some of my nasty habits while I am still in the mood to count my blessings.

We don't need to buy any new toys; we have our health and we have each other. We don't need to eat out; we are happiest at home around our kitchen table with family and friends. We don't need to go to the movies to see the latest comedy; we do enough laughing on our own. In fact, I can't seem to walk into the house without shouting up the stairs, "Hey honey, I'm home...any job offers?" And each time I do, I get a chuckle out of my husband. I tell him that he's lucky that I'm so funny, but the truth of the matter is, I'm lucky that he's such a great guy and an easy audience.

Sure, there might come a day when he throws a shoe down the stairs or throws me down the stairs, but until that happens, we're going to continue to talk about it and laugh about it and, yes, even cry about it. But please, don't be afraid to join us...we won’t bite.

Hope for Charlotte's housing market?

For Charlotte, the most important day of Barack Obama's young presidency may be Wednesday, when Obama announces his administration's foreclosure rescue plan.

It's an issue especially important to us, not only because the nation's credit catastrophe is at the heart of today's banking crisis - costing this city one bank and thousands of jobs - but because Charlotte is struggling more than most with home defaults and the damage they inflict. 

What will Obama's propose? Advisers and officials are suggesting that the plan likely will come with a lot of gadgets, including giving judges the ability to adjust some mortgage terms in bankruptcy proceedings, plus the government possibly purchasing troubled loans held by lenders and investors.

The idea to watch is one that Obama economic honcho Larry Summers hinted at late last week - directly lowering payments on troubled and potentially problematic mortgages, perhaps by making matching payments with lenders to cover some monthly costs.

It's an approach that could especially benefit former boomtowns like Charlotte, where foreclosures struck not because of a burst housing bubble or job losses, but because homebuyers were offered and accepted mortgage terms they could not afford. The result: a swath of troubled starter-home neighborhoods threatens to squeeze the city from its perimeter. 

Already, we've seen that the damage from foreclosures extends beyond the streets riddled with defaulted homes. Adjoining neighborhoods have suffered hits to property values. Area businesses were weakened even before the downturn's grip tightened.

Now, those struggles are exacerbated with the recession, eroding consumer confidence and threatening all of the city. Even stable neighborhoods have seen the market wither as homeowners wishing to move in - and move up - are unable to sell their homes in increasingly struggling areas. We may have been one of the last cities to fall into the downturn, as our mayor likes to say, but we won't be one of the first to emerge from it without a foreclosure fix.

For Obama's plan to work, experts say, it will need to do what other programs thus far haven't - offer a more standardized approach that's accessible to consumers and streamlined for mortgage servicers, who want an easier, quicker method to identify troubled loans and set new terms.

Those details will come Wednesday. Are you optimistic they'll help? Or do you think this will lead to more wasted money? 

Your Morning Edge:

Should you feel obligated to spend more and save less to help the economy? Cornell economist Robert H. Frank says no.

A compelling (and lengthy) read from the Los Angeles Times: Depression survivors remember hope

A downturn upside: The recession is a fine multi-purpose excuse, writes the New York Times' Alex Williams. 

Friday, February 13, 2009

Young, professional ... and leaving?

Used to be, they gathered after 5, sharply dressed and with few worries, in places just like this. Now they stood again, shoulder to shoulder in South End, a few with binders in their hand, and with resumes in their binders, just in case.

On Thursday, at Jillian's, hundreds of hopefuls filled an event for the jobless called the Pink Slip Networking Party. They sipped from plastic cups and ate free snacks. It was just before 5.

They were, mostly, the young professionals that Charlotte has cultivated for years.

Will they be the first jobless to leave?

"We want them to stay," said Moira Quinn of Charlotte Center City Partners, which hosted the event.

In the past decade, Charlotte has coveted these young men and women, wooing them with events like this, hiring consultants to tell us how we could lure more. Businesses, we knew, were attracted to cities with a vibrant and diverse workforce, and studies showed these young workers chose city first, job second.

Now they are the least anchored of Charlotte's jobless, mobile if they need to be, even if they don't necessarily want to go.

"I don't," said Hope Smith. She is 32, from Lawrenceville, Ga., a graduate of the University of Georgia. She came to Charlotte two years ago, found a job in property management, lost that job in November. She wonders if she should go back to school, maybe find another career, maybe move back home. "It's really, really hard," she says.

Over her left shoulder, Tricia Leo talked to a representative at one of the dozen tables offering recruiting services, volunteer opportunities, more education. Leo is from Sheboygan, Wisc. She moved to Charlotte in July 2007, found a job, a church family. "I want to stay," she said. "That's why I'm here today."

And so, on Thursday, they talked to others just like themselves, casualties of the recession, sharply dressed and full of worry. Used to be, some of them gathered at places like this, after 5, to swap stories about their boss or the next big things in their lives. They were from New Jersey and Delaware, Ohio and Michigan, and they were here because they'd heard Charlotte was a good place for young people. They wonder now if they can keep it a good place for themselves.

Thursday, February 12, 2009

Tip Jar: If that rainy day comes...

If you're among the formerly employed, Patsy Schober of H&R Block in Charlotte has five tax tips you'd be wise to consider.

Each week, The Squeeze will talk to finance, tax and job experts about how to navigate the downturn. Have a question you'd like answered? Let us know.

Says Patsy:

1. Unemployment benefits are taxable income: To avoid being shocked by a tax bill on April 15, taxpayers can complete Form W-4V – Voluntary Withholding Request so that 10 percent of an individual’s benefits are withheld for federal taxes. This won’t cover the cost of state taxes, so make sure to plan for that as well.

2. Job search expenses may be deductible: Expenses that may qualify include out-of-pocket travel to interviews, educational courses or certification related to your work, and tax preparation and planning fees. Job-search expenses are claimed as part of the miscellaneous itemized deductions.

3. Another potential deduction could come from a job move: Qualified moving expenses (the cost of moving you, your family and your belongings) may be deductible, even if you don’t itemize. To be eligible, your move must meet certain rules, so consult tax rules or your tax professional.

4. Check your lump-sum severance withholding: Companies that provide lump-sum severances are generally required to withhold 25 percent to cover federal income tax. This may or may not be enough to cover federal taxes. State taxes would also have to be accounted for as well.

5. Want it all at once? Think again: These can be a quick boost to retirement savings, but income infusions bring tax implications that you should carefully consider. If a lump-sum payment makes your total annual income higher than it was last year, some credits or deductions that you normally claim may be reduced or unavailable. Severance may be paid over several pay checks, which provides you with salary continuance and a more “regular” tax picture for the year.

Susie's story: "On top of the world"

The strain of the economy can be felt throughout Charlotte. Our neighbors are losing jobs, or fretting that they might, or worrying about their dwindling incomes. They are all suffering - all feeling the squeeze. 

Yesterday, Laurie Reid wrote about how her comfortable Charlotte life was changed with her husband's layoff - and she showed how she is handling the loss of her household's income with humor and grace. She'll be back soon with more thoughtful entries, and we hope to hear from you, too. Retirees. College students. Tell us your stories of struggle or success.

Today we bring you Susie Kirsch, who has lived in Charlotte for a little more than two years with her husband, a daughter, and now a new baby girl.

Here's Susie's story:

My husband had a stable job, working for a Marketing Agency in Charlotte, and I work for a non-profit agency that does work with mentally ill individuals. When the news was breaking about the state of the economy, and the R word ... Recession, I guess we thought that it would never happen to us. We don't spend out of our means, we live in a modest house, we don't carry a massive amount of credit card debt, and we both are very hard workers.

A little over 5 weeks ago, I gave birth to our second daughter. We were on top of the world. We had just moved from a town home to a house in August 2008 to accommodate our growing family, and we had completed painting and minor improvements to make it just the way we wanted before the baby arrived. We didn't have any issues receiving financing, and we got a payment that was well within our means. Also, my fellow co-workers were very generous and donate some of their unused PTO so I could take paid maternity leave. I thought we were doing very well, and was excited to welcome our new baby stably into this world.

My husband took a week off of work right after the baby was born, and returned to work ready to start the new year. His annual performance review was scheduled for the next day, and he was excited to hear about his progress at the company. Before he left that day, he told me his review was at 10 a.m. and he would call me when it was over to tell me how it went. A few weeks prior, the president of the company stood up and told everyone that the company was doing well, I had no reason to think that he wouldn't get a raise. They were even giving out partial bonuses this year, which no one expected, so everyone thought that the company was in a great place!

When the phone rang at 10:13, I knew that something was not right.

His review could not have taken only 13 minutes. I answered the phone and just knew from the sound of his voice, they had laid him off. With a week-old baby in my arms, I began sobbing, and all of the worst thoughts started going through my head. Our new house - foreclosure? What about insurance - he carried all of our insurance? What are we going to do? How are we doing to pay bills? Feed our 2 kids?

Well, here we are a month later. He hasn't found a job yet and his last day is next Friday. Our new little angel has started having some minor medical issues, so now we have an even bigger financial burden. When will this end? When will good, honest, hard working people stop losing their jobs? I too fear for my job security, as the non-profit I work for is primarily government funded. What will we do if I get laid off? I just can't imagine.

A stimulus disappointment?

The newly crafted $789 billion legislation brings some bad news for Charlotte's struggling housing market.

Lost in a compromise between House and Senate negotiators Wednesday was a $15,000 tax credit for people who bought a home in 2009, reports say. A $7,500 tax incentive for first-time homebuyers remains. That incentive, which was part of 2008 legislation, is essentially a no-interest loan.

The $15,000 tax credit would have applied to all homebuyers. It had been hailed by the housing industry and other consumer groups for its potential to kindle a sagging homebuying market and spark retail activity as homeowners readied their homes for sale.

Such activity could have been a boon to markets around the country, including Charlotte, where home sales tumbled to a new low last month, and a decline in pending sales showed the struggles are likely to continue.

No word from legislators on why the $15,000 credit was whacked, but there was some disagreement on how effective it would be. The National Association of Homebuilders said the credit would create a quarter-million jobs (although it did not say how it arrived at those optimistic numbers.) Lending experts, however, wondered if the credit would have been enough to convince enough hesitant homebuyers to make the leap.

Would the credit have made you more inclined to look for a home in 2009?

Your morning edge:

Slate's Daniel Gross says that if you listen to the Treasury Secretary, the economy is even worse than President Obama is indicating.

Here are the 25 people you can blame, from

Homebuilders are hoping to boost sales by going green with their houses, the Wall Street Journal reports.

Wednesday, February 11, 2009

Laurie's story: Be careful what you wish for

Laurie Reid is 45 years old, a wife and mother of two. She's lived two decades in Charlotte - a comfortable, but not lavish, life. "A week at the beach during the summer is the extent of our extravagance," she says.

Then, one day late last year, her husband came home with hard news from work.

Beginning today, Laurie will be telling her story regularly for The Squeeze. She's thoughtful and funny and candid. We know you'll look forward to reading her story, and we hope you want to tell us yours, too.

Says Laurie:

A year ago, my fascination with American Idol inspired me to launch a blog dedicated to the critique of the contestants on the popular television series. I followed the show religiously and blogged about it constantly.

When I learned that American Idol’s season 8 was due to start, I decided to get back into shape and warm up my blogging fingers. I was in search of something fresh, new and exciting to focus on before the Idols graced the big stage.

Then, one day last November, my husband came home from work and informed me that it was his last day of work. The recession quickly became a depression around our house. Like it or not...I had something new to blog about.

I’m not sure that unemployment qualifies as "exciting," but it is certainly fresh and new, as in a fresh and new open wound. Ouch. We did not see this one coming. And yes, to answer your question, I guess I may have been living in a bubble. I knew things were bad and I expected layoffs for my friends and neighbors who worked at Wachovia and Bank of America, but my husband worked in operations management - not at a bank - so I guess I felt we were somewhat safe.

I'll be trite here for a minute: yes, we have our health, our savings, a wonderful family and magnificent friends and for that, we are eternally grateful. But it's never easy having the rug pulled out from beneath you, especially when the economy is going to hell in a hand-basket. It feels like a slap in the face and it hurts.

But the sting is wearing off and we are committed to taking this one day at a time. We will get through it with grace, dignity and humor and someday (hopefully someday soon) it will be a distant memory. While I have a tendency to see the glass half empty, my husband sees it overflowing. While I'm the voice of doom and gloom, he's the voice of reason. And while I am a bit of a killjoy at times (ok, that might be putting it mildly) I do have a pretty good sense of humor and, really, isn't laughter the best medicine?

I list trophy wife as my current occupation; now more than ever I will have to step up to the plate and demonstrate to my husband that he has been awarded a prize. Wow, that’s a bit of a stretch and certainly a challenge, but I vow to be more supportive now than ever. On my honor I will try my very hardest to keep my sarcasm in check. And in the process, I'm sure I will have many stories to share. Writing won’t help pay the bills, but writing it down always seems to make me feel better.