The Weekend Edition:
Why Americans Are Going Broke



Times are bleak for the U.S. consumer. The average household owes 20% more than it makes each year. The personal savings rate is in negative territory. Record numbers of Americans are losing their homes to foreclosure, and millions more are struggling to keep up with their monthly bills and obligations. And the nation's economy isn't in much better shape. The government's new stimulus plan will give Americans some cold hard cash and they are counting on recipients not to save it or put it toward debt. The goal is to have Americans do what we've done best over the past 30 years: spend it. Newsweek's Jennifer Barrett spoke with author Stuart Vyse about the wisdom of such a stimulus plan and why it's getting harder for so many Americans to stay afloat.

Newsweek: You say the common assumptions about why Americans can't hold onto their money are insufficient. Why?
Stuart Vyse: The most common assumption is that people are irresponsible and that they are not wise about their money. It's basically victim blaming an attempt to shift the blame onto individual consumers. The other point of view on this issue is that it is primarily the fault of predatory lending practices the "evil" credit card companies. One of the most important factors is the easy availability of universal credit. The House and Senate have passed economic stimulus packages that include rebates to taxpayers, which the government is encouraging them to spend. That seems like an irresponsible message for taxpayers who have debt or no savings.

Why is it assumed that the poor and middle class are likely to spend the rebates?
Under normal circumstances, they are the ones who have less disposable income. If you are on the lower end of the curve, you are more likely to need the money for immediate expenses.

Why wouldn't they save it or put it toward a debt?
If they are smart, they would. The problem for most who are seriously in debt is that $600 or so doesn't amount to much. So what can consumers do in a world designed to encourage them to overspend? Using techniques from behavioral economics, it helps if you can make saving automatic. I also recommend automatic monthly bill payments. Split your paycheck into two with some going into a bill-paying account in which you have no ATM access, and the rest should go into another account that would house your disposable income.

What would you propose the government do to help reverse the trend in consumer debt?
One of the most important things is to promote savings and obviously we need reasonable limits on credit. There was a time when if a banker gave someone a loan and the person failed to pay it back, the banker felt some responsibility because he had made a bad assessment. That ethics in banking obviously is gone.

If consumers actually saved money and paid off their debt, could it hurt the U.S. economy?
One reason we have all these problems is that we are supposed to. It drives our economy. If everyone had no debt and was into saving, then our economy (as it is designed today) would not be performing as well as it should, according to economists.

Labels: Debt

1
Suns' Upbeat ... But Now Looking Up At Lakers
Adande

By J.A. Adande
ESPN.com
(Archive)

PHOENIX -- The one thing we know for certain after Shaquille O'Neal's first game with the Suns is ... the Lakers are looking great.

Shaq and the Suns? To Be Determined. Sure they can get better once they work out the kinks. But it's hard to imagine O'Neal making vastly greater contributions than the 15 points and nine rebounds he put in Wednesday night. The scariest notion is that even though the Suns can get better, so can the Lakers once they get Andrew Bynum back. And the Spurs got a little Shaq insurance themselves by trading for Kurt Thomas earlier in the day.

Then there are the practical matters posed by the Lakers' 130-124 victory: the two teams are tied atop the Pacific Division with 37-17 records, and the Lakers have won the season series, 3-1.

The Suns had an upbeat attitude afterward. O'Neal was more positive than I've ever seen him after a loss. Instead of reverting back to monosyllabic answers he was as glib and colorful as his arrival press conference. He stayed 10 minutes and practically had to be pulled away from the microphone.

"I haven't been this happy in a long time," he said.

He was in such a good mood he even fell on the sword for his new teammates.

"I will take the blame for this loss because I wasn't in tune with the guys," O'Neal said. "But give me four or five days to really get in tune and I'll get it."

Yep, plenty of Suns-shine, coming there way. Zippity doo-dah.

"I think we've got a lot to be encouraged by," Steve Nash said.

"I just think we'll get it all back and work on it piece by piece," said Phoenix coach Mike D'Antoni.

But it could be that by the time the Suns get it all figured out it will be too late to win the division and too little to beat the Lakers or the Spurs in the playoffs.

O'Neal was doing his best to fit in with the Suns offense. However, the first time he caught the ball he was on the move, coming across the free-throw line, a place he rarely occupies in the half-court set. He looked out of place. A couple of times he even beat Nash (whom he called "a hip-hop version of Scott Skiles" and the "Canadian Eminem") down the floor on the break, although he didn't get the ball.

Shaq didn't bring the Suns to a standstill; they scored 20 fast break points, two above their average. But he wasn't a great catalyst either. Two of his outlet passes were intercepted.

He and Nash connected on just one alley-oop, despite Nash's talents in that department. And in one case the lack of familiarity had disastrous results when he knocked Raja Bell to the deck and out of the game with an elbow as O'Neal tried to block a Bryant shot.

As they discovered later on, it's not too bad an option to go to O'Neal in the low post and let him do his thing, the way he used to do with what he called his "other team." But the days of counting it as an automatic two points are over. He made only one of his first three shots, coming when he dunked over DJ Mbenga on an inbounds pass.

It could be that O'Neal's greatest contribution is to provide a boost to a teammate, like Kurt Busch drafting behind Ryan Newman to push him to victory in the final lap of the Daytona 500. (Might as well make a NASCAR reference, since twice as many people watched Daytona as the All-Star game.)

Amare Stoudemire moved back to the power forward position and flourished, scoring 37 points to go with 15 rebounds and three blocked shots.

"Playing power forward allows me to roam a little bit more on the wing," Stoudemire said. "As far as crashing the boards offensively, as far as being out there on the perimeter a little more. I think that's what you guys are noticing.

"It always helps when you've got another big guy in there with you, someone they have to pay attention to as far as rebounding goes."

If Shaq can't single-handedly alter the balance of power from conference to conference, as he did when he came West in 1996, he still can make events seem more important by his mere presence.

US Airways Center was packed in anticipation, the fans eager to cheer and snap pictures the moment O'Neal took the court.

A fan sitting behind me turned to his friend and said, "When was the last time you saw this place this full, this early?"

It felt like a continuation of the past two playoffs, which have pitted these teams against each other the first round.

"It was a familiar energy in the building," said Kobe Bryant, sounding like a Jedi knight.

Sixteen photographers and cameramen trained their lenses on Shaq as he stood for the national anthem.

The crowd wanted to salute him for everything they did, giving him standing ovations for his first dunk, an aggressive one-handed rebound as he fended off Kobe Bryant and Lamar Odom, and a dive across the baseline after a loose ball, as he bowled over official David Guthrie and a couple photographers in the process.

He's engaged, he's looking to fit in. Best of all for the Suns, he said his hip and knees felt fine. He got stronger as the game went on, getting nine points and three rebounds in the fourth quarter.

"I'm in better shape than I thought I was," O'Neal said.

D'Antoni had said before the game that he planned to limit Shaq to 20 minutes, but O'Neal would up laying almost 29.

The Suns medical staff wanted to keep him out longer, but D'Antoni told them, "You talk to Shaq. He's staring me down."

Too bad for the Suns O'Neal didn't intimidate the Lakers as much. They scored 56 points in the paint, with Pau Gasol going for 29 and Odom scoring 22. The Lakers continued to get production from the bench, which scored 13 points in a noteworthy second quarter. And Bryant was unstoppable, torching Bell and then Grant Hill for 41 points on 16-of-25 shooting. It felt like one of those Jordan vs. Starks games, when Jordan was going to get his points no matter how good the defense.

It sure didn't take the Lakers long to adjust to Pau Gasol. They won his first game in a Laker uniform and are 7-1 with him. They're surging with confidence

"Know you can do it, don't think you can," Bryant told his teammates before the game. "We're a good team. We deserve to come in here and win."

And that's the difference. The Lakers know right now. The Suns think they can, hoping Shaq is The Big Diesel That Could.

Labels: Lakers

Fidel Castro retires
Tue Feb 19, 2008 2:52am EST

HAVANA (Reuters) - Ailing Cuban leader Fidel Castro said on Tuesday that he will not return to lead the country, retiring as head of state 49 years after he seized power in an armed revolution.

Media February 7, 2008, 5:00PM EST text size: TT

Generation MySpace Is Getting Fed Up

Annoyed with the ad deluge on social networks, many users are spending less time on the sites

by Spencer E. Ante and Catherine Holahan

If you want to socialize with Chris Heritage, you won't find him on Facebook. The 27-year-old Port St. Lucie (Fla.) business analyst joined the social network last year after his buddies bugged him to get an account. But he soon became fed up with the avalanche of ads, especially those detailing what his friends were buying, and he quit the site in November. Now, Heritage expresses himself through a blog, happy to pay $6 a month to publish on a promo-free Web site. "It's worth it to not have to look at the ads," he says.

Uh-oh. Social networking was supposed to be the Next Big Thing on the Internet. MySpace, Facebook, and other sites have been attracting millions of new users, building sprawling sites that companies are banking on to trigger an online advertising boom. Trouble is, the boom isn't booming anymore. Like Heritage, many people are spending less time on social networking sites or signing off altogether.

The MySpace generation may be getting annoyed with ads and a bit bored with profile pages. The average amount of time each user spends on social networking sites has fallen by 14% over the last four months, according to market researcher ComScore. MySpace, the largest social network, has slipped from a peak of 72 million users in October to 68.9 million in December, ComScore says. The total number of people on such sites is still increasing at an 11.5% rate, but that's down sharply from past growth rates. "What you have with social networks is the most overhyped scenario in online advertising," says Tim Vanderhook, CEO of Specific Media, which places ads for customers on a variety of Web sites.
WISHFUL THINKING?

Advertising on social networking sites is growing fast. Last year global ad spending on these sites shot up 155%, to $1.2 billion, says researcher eMarketer. This year, eMarketer expects it to jump 75%, to $2.1 billion. During its Nov. 4 earnings call, News Corp. (NWS) gave an upbeat forecast for Fox Interactive Media, which includes MySpace.

But the forecasts for torrid growth may prove unrealistic. Besides the slowing user growth and declining time spent on these sites, users appear to be growing less responsive to ads, according to several advertisers and online placement firms. If advertisers can't figure out how to reverse these trends, social networking could end up as a niche market in the online ad world, smashing hopes and valuations across Silicon Valley.

The current strength in advertising on social networks may be exaggerated by guaranteed ad deals and hopeful experimentation. Google (GOOG) and Microsoft (MSFT), in hot competition with each other, promised a number of sites a minimum amount of advertising revenue in exchange for the exclusive right to place ads on those sites.

But the early results from those deals are mixed. On Jan. 31, Google said it didn't generate as much revenue from social networking ads as expected. Google, which has a $900 million guaranteed deal with MySpace for placing ads alongside search results, says existing ad approaches aren't working well on social networks so far. "I don't think we have the killer, best way to advertise and monetize social networks yet," said Google co-founder Sergey Brin.

When News Corp. reported its earnings, it said revenues for Fox Interactive Media surged 87%, to $233 million. But $62 million of that came from Google's guaranteed deal with MySpace. It's unclear whether Google, which ad experts believe is losing money on the deal, will sign similar agreements in the future.

Another big slug of ad revenue is coming from companies experimenting with social networks because they are such a popular new medium. But for some, the results have not been encouraging. Many of the people who hang out on MySpace, Facebook, and other sites pay little to no attention to the ads because they're more interested in kibitzing with their friends.

Social networks have some of the lowest response rates on the Web, advertisers and ad placement firms say. Marketers say as few as 4 in 10,000 people who see their ads on social networking sites click on them, compared with 20 in 10,000 across the Web. Mark Seremet, president of video game publisher Green Screen, stopped advertising on MySpace last spring because of a 13-in-10,000 response rate. "It's really hard to make money on that anemic click-through rate," says Seremet.

MySpace and Facebook recognize the issue but say increased targeting and other innovations will spur users to pay more attention. Last fall, both rolled out programs allowing marketers to pitch products to people in hundreds of categories of interest, such as fashion and sports. News Corp. President Peter Chernin said on Feb. 4 that response rates on MySpace improved as much as 300%. Owen Van Natta, chief operating officer at Facebook, says there will be more experimentation in the future. "There's so much innovation that needs to happen," he says.

But there's a catch-22: More aggressive ad programs can lead to more frustrated users. Ryan Lake, 34, just left MySpace because of the ads. "There are so many, and they are getting more and more obtrusive," he says.

Facebook, the second-largest social networking site, which continues to grow rapidly, introduced an ad program in November, called Beacon, that alerted users to the purchases of friends in hopes of spurring sales. More than 75,000 Facebook members signed an online petition against the effort. Carol Kruse, Coca-Cola's (KO) vice-president for global interactive marketing, says that while she thinks social networks present a big opportunity, Coke is avoiding Beacon for now.

MySpace has had complaints, too. Nina Pagani, a 20-year-old New York student, grew furious last year when MySpace began automatically posting on users' home pages notifications of friends' favorite products. "Your personal MySpace page became an advertisement," she says. Pagani, a five-year MySpace member, deleted her account in December. "It caused too much drama in my life," she says.

Ante is Computer Editor for BusinessWeek . Holahan is a writer for BusinessWeek.com in New York .

Labels: Myspace

Texas mayor resigns over Shih Tzu

The mayor of a small town in Texas has resigned after secretly keeping her neighbour's Shih Tzu while pretending it had died.
Neighbours had asked Alice Mayor Grace Saenz-Lopez to look after the dog, Puddles, during a holiday. She called them to say it was dead.

But the dog, which Ms Saenz-Lopez had renamed Panchito, was later seen at a dog groomer's and at her sister's home.

A custody hearing on Monday is expected to decide who keeps the pet.

Ms Saenz-Lopez had filed a police report to say that Puddles was missing.

She was indicted on 18 January on two counts of tampering with evidence and concealing evidence.

In a resignation letter published by the Alice Echo-News Journal Ms Saenz-Lopez apologised for the incident.

"I can tell you that I did at the time what I thought was best for Panchito and what I felt was right in my heart," she wrote.

"I am sorry for the division that the events of these last few weeks have caused.

"It was never my intent to bring any negative exposure to our city."

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/americas/7224647.stm

Published: 2008/02/03 00:49:38 GMT

© BBC MMVIII

Labels: Dogg

Super Bowl, 2008

I will enjoy it immensely if the New England Patriots lose come Sunday evening. It will bring pleasure. Now, this takes away nothing from the facts of how incredible their season has been, and the admiration I have for the organization as a whole. How many amazing stories exist, from front office to the water boys, to a man who came back from a stroke, to a coach who has learned his way into a legend. Business networks covering the amazing story how the entire organization has become the model for success. There are books being written on success, leadership, and how this team has become a dynasty. Spats of cheating, bringing in questionable players that have turned into world class citizens and how they forged ahead to win... You can go on and on.

But this weekend, it all comes together, and the decision will be made at the hands of not only this amazing franchise, but ironically, with a small team to stand in their way.

The New York Giants: The center of the world, the largest market in the country.

And they, the Giants, are the underdog.

A team, who has since its inception, lived under media scrutiny and the toil of being the biggest. A team who are called the New York Football Giants, as they once played in a city with the baseball Giants.

Just look at the word, GIANT.

And they become the team to try and stop the bow being wrapped on this perfect present.

The ironies seem large and detailed. No reason to go into them here. The history of hate between those of the New England colonies and that of the almighty New York City goes way beyond anyone who will be alive to watch and witness this Super Bowl.

But what makes sports so great? What makes sports, and the week long banter what we live for, come this week every year, so important to us? What makes competition the basic necessity of survival?

The fact that everything, the fame, the rings, the experts, the business story, the heartfelt story, the love story, it all goes away, if victory falls to the New York Football Giants. If the team in the market that doesn't expect, but demands winning, accomplishes their goal, all of the above goes away, into the cold wind, and the center of the universe, for a moment as underdog, breathes a sigh, and is happy again, if only for one minute.

If this dynasty staring into perfection does not win their 19th game, what happens to the other 18? The perfect season will be meaningless, and those who have beaten their chests for so long will cry in vain.

That is why we love sport. Every part of our life derives from sport. Sport is as historic as creation, as war, as death. And on Sunday, sport will bring 2 mighty franchises together, and 1 of them will fall to the wayside.

And that is why I will enjoy it immensely if the New England Patriots lose come Sunday evening. Simply, you can't have everything in life. Life has consequences. And lessons.