Author John Fischer Archive

It’s hard to believe where gas prices are right now, compared to where they were just six months ago. With the recession in full swing, though, you need to enjoy those lower prices while they last.

While prices in certain parts of the country have dropped as much as 60% since last summer, try drawing a parallel with your allegiance to a particular sports team: If you’re superstitious and your team has disappointed you before, logic dictates that they’ll let you down again. As with so many other aspects of the American economy struggling right now, being cautiously optimistic about fuel costs is probably your best bet. And if you want to feel even more fortunate about fuel costs, remember that they’re dealing with much higher prices over in Europe. (It’s easy to forget that this is a global recession we’re in.)

Even if you’ve been enjoying watching fuel prices drop, don’t get too used to it. The prices at the pump today or next week — or even next month — only tell part of the overall story. As oil prices dropped more than $100 per barrel in six months, remember that those low costs have a lot to do with a weak demand for oil and refinery products. While many experts feel that the low demand could last for at least half of 2009, the past year clearly showed us that predictions and expectations can’t always be trusted, no matter who makes them.

For now, try to find some comfort in paying less at the pump. And if you’re still driving a car that eats a lot of gas, start thinking about a more fuel-efficient alternative; you may just need it in the months to come.

Even as the auto industry experiences its worst overall sales figures in decades, there are still some of us out there who need and want to buy cars.

But with overall cash flow hard to come by (and the usual structure of auto loans hampered), it might be time to think about other buying options. As always, do your research, and keep your budget constraints in mind. But before you try purchasing a brand-new, fully-loaded “gas guzzler” (remember that summer 2008 saw gas prices soar over $5.00 per gallon in some areas) or consider springing for a sportier car that will only drop in value the moment you drive out of the lot, why not give a used car a try? One look around the auto industry suggests that many auto dealerships are already thinking in those terms.

As you begin your search, start by believing that today’s cars are built to last; the old joke about “driving a car until its wheels fall off” has never been more important than right now. Many car dealerships are just as desperate for business as the rest of us are to keep our overall budgets balanced. And one look around today’s auto showrooms and lots will tell you all you need to know about current supply and demand.

Sure, we’re all a little tired of listening about today’s troubled economy, but that’s why you’ve got to consider changing gears. If you need a car, try thinking out of the box. Right now, there are many online car shopping tools designed to help you find deals on cars no matter where you live.

So while we all wait to see what happens next with the auto industry, a little flexibility can increase your current buying options.

Despite the endless parade of bad economic news all of us keep hearing from every media outlet, the 2008 online holiday shopping could break some records. In what has traditionally been called “Cyber Monday” (the Monday after Thanksgiving, traditionally the busiest online shopping day of the year), there should be plenty of people poised at their home and office computers — with a mouse and a list of shopping needs at the ready. Don’t look now, but there are so many sales planned, you might have a hard time deciding where to shop first.

For fastest results, though, visit cybermonday.org. A one-stop-online shopping Mecca awaits you there.

According to Shop.org, 84 percent of online retailers plan to have Cyber Monday promotions. That’s a full 12 percent higher than Cyber Monday last year. And while the economic downturn began way more than a year ago, well … you know the rest.

The bottom line is that most major retailers know they’re likely to have a lot of left-over inventory this shopping season. While companies (especially big-box retailers) will try to put a positive spin that “Black Friday” (the day after Thanksgiving) sales still attracted tons of customers (some reports last week even predicted an increase in overall sales from 2007), every large retailer still dreads excess inventory.

From toys to electronics to everyday items, the shelves of brick-and-mortar shops (i.e., retail outlets) are very likely to remain well-stocked — even a month from now. Sure, some people faithfully checked all the shopping circulars and waited outside in the cold for 5 am store openings on Black Friday, but the simple convenience of sitting down at your desk — or better yet, using a laptop from the comfort of your living room couch — is what every online retailer is betting on.

So plan to check out your favorite retailers online this Cyber Monday: Nearly nine out of every 10 will be having sales. If you’ve still got your heart set on that new winter coat, or you’ve just got to have that big-screen TV, both should be readily available.

A year or two ago, most people had never even heard of the term “short sale.” Today, though, as the real estate business has become a heavy casualty of the severe economic downturn, short sales are becoming an increasingly popular alternative to foreclosures — especially for the buyer.

A short sale happens when the sale price is less than what the seller still owes to the lender via a mortgage loan. Let’s say you own a home, and you know you won’t be able to continue making the payments — that foreclosure seems inevitable. For you, a foreclosure is bad news on a couple of different fronts: Your credit score will take a big hit, you’ll have to move elsewhere, you stand to lose money on the deal (potentially a lot of money), and you compromise your eligibility for a future home purchase.

That’s why short sales have risen in popularity. Today’s falling home prices, combined with homebuyers making low down payments at the time of sale, mean that many homeowners owe more on their mortgages than the properties are currently worth. (This is what’s known as an “underwater mortgage.” It’s a lot like the term “upside down on a car loan,” except it’s often worse: an “underwater mortgage” typically involves larger dollar amounts.)

Add to that the population of homeowners who face foreclosure due to resetting mortgages (when adjustable rates reset, for example), not to mention the need to relocate for work or other reasons, and it makes sense that lenders would consider short sells to offset bigger losses from foreclosures.

On the other side of the coin, a short sale doesn’t recoup all of the home borrower’s losses, but it can help to limit the damage — and hit the “reset” button on the borrower’s future finances at a slightly more desirable level.

At a time where there just isn’t enough money to go around, both individuals and small businesses are still having a very tough time getting loans.

With the country’s ability to generate revenue very constrained right now, there isn’t enough money flowing down from the government to big banks to regional banks to smaller local banks. And on the consumer side of things, there aren’t enough jobs paying wages high enough right now to allow every income level of the population to handle overall living expenses, make home and car payments, and keep up with a regular budget.

It’s simple math, of course, but when you combine the disasters we’ve seen (and are still seeing) in real estate, the auto markets, and the overall financial markets, one thing seems pretty clear: We’re moving away from being a borrowing society, and we’re becoming a cash one. If things don’t change soon, the only people who’ll be able to buy high-ticket items will be those who are liquid — those who have cash on hand. While some people will maintain that there’ll always be money available to borrow for things like homes, cars, and higher education, recent events make such predictions seem far from a sure thing.

But what about right now? What can you do currently to secure a personal or small business loan? We already know that the White House basically told banks to start loaning money again, but those were just large banks — ones that received federal money from a $700 billion bailout package. What about all those other banks, though — especially local, smaller ones that exist primarily to serve communities and local businesses like yours? Clearly, the money isn’t flowing down fast enough.

Have you seen any evidence that banks in your community are beginning to lend money again?

No one knows for sure, but Dr. Seuss’s “The Grinch” might have had an easier time of stealing Christmas this year. With the economic downturn showing no signs of going away this holiday shopping season, we all may need to find a way around “Grinch-like” tendencies and come up with some alternative gift-giving ideas.

In what marks the earliest start to the holiday shopping season in many years, what’s now become known as “creeping Christmas” has started to occur at many large retailers. It may be a bargain hunter’s paradise, but the bottom line is that a lot of retailers are in trouble, and this year, big-screen TVs, other expensive electronics, and other high-ticket items will likely be replaced by more modest alternatives.

A lot of experts are saying that the art of making gifts will make a huge comeback this year, and not just among kids.

So to quote the Grinch, if “Christmas doesn’t really come from a store,” then this may be the year to prove that theory correct. Think about getting creative with both gift-making and gift-giving ideas this holiday season. And remember that it’s the thought that counts — perhaps more this year than in a very long time.

It seems that no one is immune to the economic downtown these days — not even the Pope.

While we can’t confirm that Pope Benedict XVI is busy clipping coupons and hoarding pennies these days, his staff might be. Or at least they’re likely to be a lot more budget conscious than in the past.

Word from the Vatican is that those who work there (both the laity — non-religious personnel — and priests) have begun to use time cards to clock in and out of work.

So that’s where we are now: Priests and religious aids who work at the Vatican have been issued swipe cards. Some will say that it’s a good thing to promote the meritocracy of the Catholic Church: You know, reward those who work longer hours and do their jobs more effectively than others. That’s certainly good business, but do the words “business” and “Vatican” seem like they should go together?

Maybe in these tough economic times, nothing should surprise us anymore.

Believe it or not, you’d only have to go back about 40 years in U.S. history to learn about something called a poll tax. Yes, you guessed it: Less than a half-century ago, people actually had to pay money to exercise their constitutional right to vote. These required payments, known simply as “poll taxes,” were enacted in eleven U.S. states shortly after the Reconstruction (a twelve-year period after the Civil War, when the South was restored to the Union), and were designed in large part to suppress the vote in minority communities.

It wasn’t until 1962, actually, that the 24th Amendment to the U.S. Constitution called for an end to these poll taxes; and not until January 1964 that the amendment was ratified. (Further, and for the sake of historical accuracy, all poll taxes weren’t officially declared unconstitutional until 1966 when law makers determined that any such tax violated the 14th Amendment — which basically says that no individual state can deny any citizen rights that everyone else enjoys.)

So what about us? You know, the modern-day “you and me”? Do you think we still have a poll tax? Maybe not in dollars in cents, but certainly in what has become an equally precious commodity. You got it; it’s time.

So how long did you wait at the polls on Election Day to cast your vote? An hour? Three hours? Do I hear six hours? Despite a record-setting voter turnout for the 2008 presidential election, many of us paid a different type of tax, one that was measured in hours spent away from our families, our additional responsibilities, and — monetarily speaking — our jobs.

So give yourself a pat on the back for helping produce the highest voter turnout in 100 years. Sure, a lot of the numbers are still being tallied, between absentee votes and the like. But early indications suggest that the percentage of eligible voters who actually made it to the polls hasn’t been this high since Howard Taft defeated William Jennings Bryan. And that was in 1908!

So this election year, the American people voted for change. And they spoke loudly.

Now maybe the powers-that-be can start working on how to speed up the voting process; either that or declare Election Day a working holiday. We’ll have to wait four years to find out.