Kavmerica.com

If you have ever lived in a community that depends on nice weather and tourists to survive you no doubt understand the affect a poor forecast can have on local businesses. Even the threat of rain can decimate a local economy for the weekend. The impact is even more real in parts of the country where tourism is seasonal and local businesses are counting on each weekend to bring in the money that will help them last the entire year.

While rain in the forecast can mean the difference between sinking and swimming for some business owners, the people who put out the forecast love it. Think about how the weather is presented on your local news channel. Most of the time they won’t even tell you the forecast outright. You’ll get little glimpses of it here and there. A teaser at the beginning of the news show and then you may have to wait till the end to get an actual forecast. That is because weather is big business for them. It helps increase the number of viewers watching the news and in turn increase revenues for the station.

That is why the weather forecast is always pessimistic. People don’t watch the weather if it’s going to be sunny all week, but if it is going to be inclement then that is another store. If there is a 5% chance of rain 7 days off in the forecast then that is played up. When a big system is coming it suddenly becomes “The Storm of the Century of the Week”. Their primary goal is to get you to watch the news/weather. It is not to responsibly or accurately report the weather.

It also means that when there is a real weather emergency that people don’t take it seriously. It’s the classic case of the boy who cried wolf. People become used to the idea of big storms happening all the time and then they see very little damage around then. As a result when a serious storm does come around they don’t evacuate or take precautions. This happened during Hurricane Katrina, people did not feel they needed to move to higher ground because they had heard it all before.

Millions of dollars are lost each year in local economies because of poor weather forecasting and greedy news stations. There is nothing worse than not seeing your restaurant filled simply because the weatherman up-played the small chance of rain that day and as a result the tourists never came. It is a shame that news outlets and meteorologists aren’t more ethical, especially in these days where the economy can use any help it can get. Not to mention the human costs that can occur.

We all have out vices, those little “necessities” that we wouldn’t dare dream of starting our days without.  For much of the population that “necessity” involves cosmetics.  Whether it be hair care, skin care, makeup, or perfume it adds up to a $95 billion dollar a year industry… in the US alone.  Forecasters estimate that by 2010 the worldwide market for cosmetics will reach $300 billion dollars.  That’s $300,000,000,000 dollars spend on things like foundation and eye liner.

Let’s put that into perspective for a minute. Ever see those “Save the Children” ads. According to them they can provide for a child in a third world country for just $28 dollars a month. We spend roughly $7.92 billion a month here in the US on cosmetics. $7.92B / $28 ???? = roughly 283 million. Let that sink in. With what we spend in a month here in the US on cosmetics we could feed / educate / clothe, 283 million children.

It wouldn’t be to far of a stretch to say that some of those 283 million that would be helped would otherwise die. Granted, vanity is certainly not the only area in American culture where things have gotten out of hand. Hopefully reading this will give you some perspective next time you head out to the department store to buy your cosmetics.

CNN Money came out with an article today saying that consumer spending was down 1% in the month of October.   They then went on to say it was “…another woeful sign that the economy will continue to contract.” Woeful?  Let’s not go that far.

To their credit they do at least mention that consumer prices also fell heavily and later in the article they do go on to explain more about this.  You see, when you go out and buy a camera for $99 dollars when last month it cost $100 the amount you spent goes down.  It doesn’t necessarily mean that you are buying less, you’re just buying things cheaper.  That is not necessarily a bad thing.

When you take that into account the fact that the cost of the goods sold went down then consumer spending really only feel .5%.  People are spending one half of one percent less than they did September and somehow CNN Money terms this “Consumer spending fell dramatically in October…”.  Did it really fall dramatically in October?  No, it didn’t.  Was it down?  Yes.  People are starting to become more fiscally responsible.  They are paying down dept and saving money ahead of the holiday season.  Although if you believe CNN this is “… an ominous sign ahead of the holiday shopping season.”  Again, completely untrue.  This could actually be a good sign for the holiday season.  People cutting back on their debt ahead of the busy shopping season and perhaps saving up a little money also.

Personal income actually rose .3% in October and in September it was up .2%.  If they aren’t spending that extra money then they are saving it.  That is a good thing!  Not an “ominous sign”…

The economy did pretty well for itself last month all things consider.  It is in CNN Money’s best interst to make things look worse then they are.  People log on and are fasinated by bad news.  It’s in our nature but that doesn’t mean you have to believe the hype and fear mongering.

This past Saturday President elect Obama offered up some hints as to what his economic recovery plan will be.  A corner stone of his plan is the creation of jobs.  Not just any jobs but public works jobs.  These aren’t jobs putting people in cubicles to toil away at paper work.  These are jobs which will have people out building new schools, improving the nations roads and bridges, as well as making other infrastructure improvements.  People will be put to work and you will see the benefits when you simply drive down the street.

This is exactly what the country needs.  The same type of policies were implemented back during the Great Depression to help us pull out of that fiasco.  Take the Hoover Damn for example, it was built using the same type of program.  Instead of spending money on welfare those people are put to work.  They spend their money in the economy which helps local business stay afloat.  It’s the right kind of spending to be doing at a time like this.

It seems counter intuitive but the United States needs to send more.  You’re thinking, ‘Aren’t we in a recession?’  Yes we are in a recession and that is why we need the government to kick start the economy.  Not through a bailout!  Rather the government should be stimulating the pockets of the average American citizen.  The way to do that is to spend.  It can’t be run away, uncontrolled spending but rather planned and supervised spending.  When the economy slows down it sheds jobs.  When the economy picks up steam it starts hiring again.  The economy doesn’t care where the money is coming from, the private sector or the government.  All that matters is that there is money to make it all go.

It’s important to realize that this plan is going to take time.  Obama has focused his plan with respect to brining life back to the economy within the next two years.  That may be a little optomistic but stay tuned…

Many of you are considering buying gift cards this Christmas season and you may have seen the email going around with ominous warnings.  While it’s good that the email got you thinking it is actually very misleading.  The email was a mix of Truth, misinformation and out right lies.

For example, in the email you are warned about Wilson’s leather.  Well they closed all their mall based stores back in October.  So you don’t have to worry about them.  They sold all of their outlet stores to another company which is keeping on the brand name.  The other company is not in trouble financially so you don’t have anything to worry about there.

Some of the companies on there are in no trouble at all.  KB Toys isn’t closing hundreds of stores.  Ann Taylor isn’t going to go bankrupt, yes they did close 117 stores… a year ago.  They were under performing stores.  Home Depot isn’t going to be closing up shop either.  In fact, Home Depot plans on opening a new store in December.  You can begin to see how laughable the email is.

Some stores, like Circuit City, have filed for Bancruptcy and they have closed some of their stores.  Other stores like Linen & Things are going out of business all toghether.  Obviously you don’t want to be buying gift cards at these stores!  If in doubt just go and Google the store name and “bancruptcy”.  Thats an easy way to get an indication of how the stores are doing.

Remember, just because a company is closing down stores doesn’t mean they are going out of business.  Some companies are downsizing in the current economic climate.  They are closing stores that aren’t profitable, that does not mean they are going out of business.  In fact, closing stores which aren’t profitable can be a good sign.  It means management there is bring proactive.

Don’t hesitate to buy a gift card if you have done your research but do remember there are other legitimate reasons to put in the extra effort and buy an actual item.  Gift cards are often forgotten about which means your gift might not end up being used at all.  Some stores even charge a monthly fee on the cards so the balance declines if they are not used.  Keep that in mind and don’t forget to read the fine print or ask an associate for details.