Saturday, September 26, 2009

RRJ

Reference:


Healy, J. (2009, August 28). Consumers enticed to spend more in July, data say. The New York Times, Retrieved September 19, 2009 from http://www.nytimes.com/2009/08/29/business/economy/29econ.html


Summary:


According to Healy (2009) in his article, “Consumers Enticed to Spend More in July, Data Say” American consumers have spent a lot of money in July. Although consumers took benefits of the government’s cash, they were still struggling to cause high prices of goods and services. In addition, reports indicate that personal spending rose in July from a month earlier, while personal income remained unchanged from a month earlier and the savings rate fell in July. But economists expect that savings will improve because of the worry of consumers about the value of their homes and stock.


Reaction:


Because of the high prices of goods and services in the last period in America, consumers spent a lot of money. Even government subsidies did not lead to increased savings; also lower house prices, imbalance of financial markets, and the spread of unemployment may lead to a state of economic recession in the future. So American government should support the prices of goods and services, maintain the purchasing power of dollar, and fight the spread of unemployment.

Friday, September 11, 2009

RRJ

Reference:


LIEBER, R. (2009, August 28). How retirees can spend enough, but not too much. The New York Times, Retrieved September 6, 2009, from http://www.nytimes.com/2009/08/29/your-money/individual-retirement-account-iras/29money.html?_r=1&scp=1&sq=).%20How%20Retirees %20can%20spend%20Enough,%20but%20Not%20Too&st=Search


Summary:


Lieber’s (2009) article “How retirees can spend rnough, but not too much” discusses the problems of retirees’ spending in the future. He says that the savings of retirees may not be sufficient to cover their expenses in the future, so some of them used to buy stocks and bonds to get financial returns. However, the changing prices of investment portfolio makes achieving these returns uncertain; also, these returns are affected by inflation. In fact, nobody could estimate how much better or worse stock market returns could be in the future. According to the relationship between the investment portfolio and inflation, if the portfolio lost money in any given year there would be no raise for inflation. In addition, retirees have to wonder whether the market will behave in the future as it has in the past. Experts say that to solve retirees’ problems they should create a separate discretionary fund.


Reaction:


Some retirees enjoy spending their savings for travelling, visiting their relatives, or making life more fun. However, most of them are concerned about the future, and they have to wonder whether their savings will cover future expenses, such as food, rentals, and treatment. Because of increasing prices, retirees try to achieve some profits by entering into the financial markets. In other words, retirees might lose their savings, rather than make profits, because of a lack of knowledge of financial market conditions. In the real world, I suggest that retirees should figure out stocks and bonds which make up their investments before investing; also they should divide their investment portfolio correctly between cash and stocks and bonds.

Thursday, September 10, 2009

RRJ

Reference:

GOODMAN, P.S. (2009, August 28)"A Reluctance to Spend May Be Legacy

of Recession ." The New York Times. Retived on August 30,2009,from http://www.nytimes.com/2009/08/29/business/economy/29consumer.ht

ml?_r=2&ref=business>.

Summary:

In recent years, decline in consumer spending in America has led to lower demand for goods and services, discouraging businesses from hiring more workers. As a result of declining consumer spending, economic activities are moving toward recession. In addition, lower income families can not borrow and higher income families can not feel rich. Moreover, unemployment is expected to climb higher. Working hours have been slashed even for families that increasingly depend upon paychecks to finance spending. Experts say that there is still a lot of debt, so the economy will need more time to recover.

Reaction:

The U.S economy is the strongest in the world. In addition, all economic activities are successful, such as industry, banks, insurance companies, and financial markets. Moreover, people can borrow from banks for buying houses, cars, and jewelry. Also there are a lot of opportunities for people to get jobs. Because of the financial crisis, Americans’ life has changed to difficult situation, many businesses have gone bankrupt , banks slipped into debt and a lot of people have lost their jobs. For solving these problems, I suggest that American government should provide cash in banks, support businesses, and provide financial assistance to families.