California residents still waiting for their income tax returns may have already received their IOU as the debt-ridden state scrambles to get 29,000 IOUs, worth more than $53 million in total, into the hands of those owed. So far, California has been unable to negotiate any solution to even begin to solve the state’s massive budget deficit.

The IOUs will be issued at a 3.75 percent interest rate and residents will be able to take them to cooperating banks to receive their money. Not every Californian financial institution will accept the IOUs, but major banks like Bank of America and Wells Fargo have decided to accept the vouchers until July 10.

According to a statement from Wells Fargo, though, the bank is certainly “reluctant” to start accepting the IOUs, but they have strongly encouraged California officials to do everything they can to get the budget issues settled. Several banks around California, mostly the smaller banks, have yet to decide whether or not they will accept the IOUs.

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If you were on the road this time last year, you surely remember the pain you felt each time you went to fill up at the gas station. Crude oil prices skyrocketed last year, reaching an astronomical $145.29 a barrel, but this year, oil prices remain relatively tame at $66.73 a barrel. Slackening demand for oil across the world has seen prices fall by almost $3 recently.

Oil prices have appeared to be on a rollercoaster ride over the past year. From the record-high prices reached last year, oil plummeted to about $34 per barrel in December as the economic crisis shattered demand for crude oil. Despite the touchy situation of the economy still, oil has slowly recovered and gained value from then until now.

Analysts have attributed last year’s oil price spike to a number of factors. The first was a global increase in demand for oil, which allowed oil holders to drive the price higher and maintain profitability. The second was the fact that the dollar was actually very weak at a bad time, leading to shocking prices at the pump.

Remember those days? (Image: Flickr)

While the economy seemed to be showing signs that it would eventually strengthen as the year went on, staggering unemployment numbers tell a different story. While the situation for the average American worker already very grim, it seems that the worst has yet to come.

The unemployment rate has risen from 9.4 percent to 9.5 percent, with 465,000 workers losing their jobs in June. 614,000 people applied for unemployment insurance benefits just last week. Although the number of people losing jobs had decreased every month since January, June represents a year-long high in the numbers.

Analysts predict double-digit unemployment numbers in just a couple of months if the situation does not drastically improve. This is a dramatic reversal from the optimism that analysts had expressed as recently as last week about the potential for quick economic stabilization. The possibility for recovery still remains, but the new unemployment numbers emphasize that recovery will not happen overnight and that there is still  a lot of work to be done.

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The 4th of July is among the most frugal of holidays . All the traditional things that go with the 4th are simple and relatively expensive:

• Hot dogs
• Hamburgers
• Chips (which you can often get 2-for-1)
• Soda
• Paper decorations in red, white and blue

Even the packages of fireworks for home use are often inexpensive. And, when you get together as a family, everyone brings something to contribute. Last year, my husband and I put on a bash for my sister and brother and their families. We had a great time for less than $50.

It’s a good time to remember the birth of our country, why it is so great, and realize that even in a time of economic hardship and recession it is possible to enjoy a good celebration for very little money . I hope you will join me in remembering our founders, taking a few minutes to read a copy of the Constitution and thinking on how we can be better citizens.

Happy 4th of July!

Image source: ohad*

Nowadays, news that would have been bad a couple of years ago serve as glimmers of hope in a troubled economy. Although manufacturing has shrunk again and home sales are still nowhere near they are in a strong economy, manufacturing decreased the smallest amount since August 2008 and home sales continue to creep upwards for the fourth month in a row.
 
According to the Institute of Supply Management, their factory index, which measures manufacturing, has risen in June to 44.8, with any number under 50 signaling a contraction. The National Association of Realtors has expressed a similar increase in the number of people signing home ownership contracts by 0.1 percent.
 
Analysts predict that we will continue to see a substantial improvement in the economy as a direct result of the economic stimulus programs. However, the improvement may not last until 2010 as the effect of the stimulus begins to slacken. Rising unemployment will also negatively impact consumer spending and keep much of the economy’s stabilization in check for a while as well.

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Fairpoint Communications has mentioned the dreaded “b” word in its latest filing to the Securities and Exchange Commission, which could make it the next company of many to file for bankruptcy in these harsh times. According to the filing, Fairpoint will go forward with bankruptcy if cannot negotiate an extension on its interest payments with its debt holders.
 
Based in North Carolina, Fairpoint recently took over Verizon’s landline phone network in Maine, Vermont, and New Hampshire. Despite its recent acquisition, Fairpoint has struggled with a variety of problems, not the least of them being the interest payments on its $530 million worth of loans.
 
This puts the ball in the lenders’ court, giving them the power to decide whether or not Fairpoint will have to undergo dramatic restructuring or not. A spokesperson for Fairpoint has confirmed that Fairpoint has other options if the debt holders to not agree to give Fairpoint more time to pay, but has also encouraged its lenders to reconsider.

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Many workers over the country have expressed their dissatisfaction with their employer’s terms through striking at one point or another, and now, a labor union for Matson Navigation Co. can add their name to the list. Matson is Hawaii’s biggest shipping company and the American Radio Association, the union representing radio officers on Matson ships, has called a strike.
 
Although the union has only called for a limited strike in Seattle, the proceedings have already taken their toll on Matson’s business. The International Longshore and Warehouse Union, which is involved with the American Radio Association, has workers that are in charge of unloading a Matson ship bound for Hawaii, but the strike will probably cause the ship to not get unloaded.
 
Right now, there are only pickets up in Seattle and it is unclear which other ports will be affected.  Besides the ship that might not be unloaded, two other ships are in an uncertain position. What is certain is that the strike could eventually have dramatic effects on Matson, as every ship needs a set amount of people aboard before it can travel according to U.S. law.

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Micron Technology Inc., a company specializing in the production of memory chips, recently posted its 10th straight quarterly loss, but as if the situation was not bad enough, its loss last quarter has grown. The company blames the growing loss on a decrease in sales and a variety of other unfortunate events.

Micron is the last supplier of a certain type of memory chips in the United States, but even then, the company has had massive trouble with oversupply and falling demand. Even drastically cutting the amount of chips it produced did not remedy the problem.

A year ago, Micron posted a loss of $236 million in this quarter, but this year’s losses have grown to $290 million. Although the losses are significant, at around 36 cents per share, analysts expected losses of around 43 cents per share, meaning that Micron outperformed expectations. Still, Micron continues to scale down operating costs in order to maintain profitability.

Memory Chip (Image: Flickr)

Against all odds, home furnishings retailer Bed Bath & Beyond has posted a 6 percent quarterly rise in profits, one that analysts did not expect at all. Analysts are chalking the company’s surprise profit up to Bed Bath & Beyond’s vigorous cost-cutting measures.

In the span of a year, Bed Bath & Beyond’s net earnings have risen from $76.78 million, or 30 cents per share, to $87.17 million, or 34 cents per share. However, analysts predicted net earnings at around 25 cents per share, which means that Bed Bath & Beyond dramatically outperformed expectations.

In all stores, sales have risen 2.8 percent to $1.69 billion, but on a store-to-store basis at locations that have been open for more than a year, sales have actually fallen 1.6 percent. Bed Bath & Beyond, as well as other major home furnishing retailers, blame shrinking sales numbers on the recession, stating that demand for their goods has fallen as consumers have less and less disposable income.

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While most people living paycheck to paycheck may find it hard to feel too sorry, the number of millionaires around the world has decreased significantly since last year. According to a report by a division of Merrill Lynch and Capgemini, the economic crisis has had a heavy impact on the world’s wealthiest people.
 
The decline from last year to this year represents the largest yearly decline in the number of millionaires in the history of the report, which began 13 years ago. The number of people that have between $1 million and $30 million has fallen 14.9 percent, now standing at 8.6 million. The number of people with more than $30 million has fallen by almost 25 percent, as has their combined wealth.
 
There are now 2.5 million millionaires in the United States, the number having fallen 18.5 percent from last year. The United States is still hosts the largest number of millionaires, though, followed by Japan and Germany. Millionaires throughout North America, Europe, and Asia were the hardest hit, while millionaires in Latin America did much better than the global average.

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