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Brian Kinkade — Sun, 23 Nov 2008 15:40:10 +0000

The Fed meets December 15th & 16th.

A growing number of analysts now predict that the economy is so weak that the Fed will have to reduce its official target to zero if it wants to jump start the stalled economy, as it said in its last policy statement.

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Japan’s central bank reduced its benchmark interest rate to zero for five years, from 2001 to 2006, primarily to combat a persistent case of deflation (a broad-based decline in consumer prices) and to revive economic growth. The jury’s still out on the move’s success.

Some analysts here see signs that the United States faces a similar threat. American banks have become so decimated by losses in real estate that they are either unable or unwilling to resume normal lending practices. And as prices for oil and many other commodities have crashed during the past two weeks, these same analysts now warn that deflation might be a threat here as well.

If the Fed funds rate does drop to zero, it would not mean free money for consumers or businesses. The zero rate would only apply to the reserves that banks are required to maintain and that they lend to one another. Customers would still have to pay some

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interest, but the rates could be extremely low for some business borrowers.

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Parting Ways

Jerry — Sun, 02 Nov 2008 20:17:07 +0000

Gone are the days when you joined a company right out of school and there you remained until retirement. Gold watch, retirement package, and all. Today, we change jobs more often during our lifetimes, and unfortunately it’s not always voluntary, as anyone who’s been laid off can tell you. If you’ve been laid off or fear you soon might be, here are a few ways to deal with what may be your immediate future:

Cut Back. On everything.

Finding another job could take a while, especially in today’s economic environment, which means your savings could vaporize in the process. If you haven’t been a saver, start now creating a budget and stick to it. Know exactly how much money you have, and keep close track of how much money you’ll need. The first of the month seems to come around more often when you’re out of work. Track your expenses. Put off major purchases and trim smaller ones. There are more ways to save money than you may think.

Reduce retirement savings.

This is where a short term loan to yourself

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, can make a big difference. If you’re still employed but fear the worst, this may be the one and only time it makes some sense to temporarily halt contributions to your 401(k) plan . Could very well be that you’ll need that money to survive the next few months, and early 401(k) withdrawals come at a steep price. Besides, you may be able to make a lump-sum contribution later if it was a false alarm. Consult a financial professional about your particular situation.

Ask about severance benefits.

If you’re laid off, find out what benefits you may have coming. Many employers offer severance pay or help with health insurance premiums. But there’s no law that says they have to, so check. Many companies also provide outplacement counseling, which could include professional assistance with resume writing, interview skills, and job searches.

Put some polish your resume.

There’s a good chance you’ll be competing against hundreds of other job applicants, so you want to make sure your resume stands out. It should accurately reflect your accomplishments and show potential employers you have the experience and qualifications they’re looking for. Be concise and look organized. It’s a good idea to update your resume regularly anyway, especially after a promotion or a change in job responsibilities.

Get on your network.

Let family and friends, and acquaintances know you’re looking. They may know of opportunities, or be inclined to spread the word on your behalf. Look for networking events sponsored by the Chamber of Commerce, local colleges, trade associations or other business and social organizations. Help, in this case, will be where you find it.

Now it’s not the end of the world, but being laid off can be stressful. So you have to have an effective game plan centered around good common sense, and determination, to get you back in the game.

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Parting Ways

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