source: USA Today

Economy compels some to move home with parents

After being laid off from her job as an events planner at an upscale resort, Jo Ann Bauer struggled financially. She worked at several lower-paying jobs, relocated to a new city and even declared bankruptcy. Then in December, she finally accepted her parents’ invitation to move into their home — at age 52. “I’m back living in the bedroom that I grew up in,” she said.

Taking shelter with parents isn’t uncommon for young people in their 20s, especially when the job market is poor. But now the slumping economy and the credit crunch are forcing some children to do so later in life — even in middle age. Financial planners report receiving many calls from parents seeking advice about taking in their grown children following divorces and layoffs.

Some of Erickson’s clients are giving as much as $50,000 at a time to their kids, many of whom have overextended themselves with big houses or lavish lifestyles. And the sliding economy might threaten their jobs.

Anna Maggiore, 27, lost her job as a publicist in Los Angeles about three years ago and moved into her parents’ house in Los Alamos, N.M. She tried to find jobs, but nothing stuck, so she enrolled full-time at the College of Santa Fe to finish her bachelor’s degree in business. She figures her parents spend about $1,000 a month on her, including a car payment, car and health insurance, school and other costs. Her father is a retired nuclear physicist and her mother, a guidance counselor, will retire this spring. Now Maggiore is looking for work so she can supplement their income.

“as you go out into the world my advice to you is… don’t go! It’s rough out there. Move back with your parents. Let them worry about it!” - Rodney Dangerfield, Back to School

Found on a fashion board I frequent, and interesting:

28th January 2008 19:30

Slowing US retail sales at two luxury goods makers are seen as further evidence that high-end consumers – once thought to be buffered from economic uncertainty – are also starting to tighten their belts as a weak housing market, credit problems and high food and gas prices start to take their toll.

Luxury handbag and accessory maker Coach last week said that second-quarter profit rose 11%, as sales at its factory stores offset weakness at retail locations, but cautioned it is facing a difficult consumer environment. Same-store sales at full-price stores fell 1%, but rose 18% at factory outlets the company said.

The results show consumers are trading down to lower-price items, and New York based Coach now plans to introduce a lower-priced $200 handbag to its line in the future to entice even the budget-conscious.

Meanwhile, PPR SA, the French owner of the Gucci luxury-goods brand, said revenue growth slowed in its fourth quarter as US and European consumers trimmed spending on designer handbags. Sales rose 15% in the quarter, but this fell behind the 22% increase reported in the third quarter.

However, both companies believe they will be able to weather the economic storm, with Coach backing its profit outlook for the year and PPR promising higher results for its full year.

Their results, though, are in line with Unity Marketing’s Luxury Consumption Index, which shows luxury consumer confidence at the beginning of 2008 has never been lower, and that spending on luxury goods and services is down more than 20% from the first half of 2007 to the second.

“Affluent consumers, just like everybody else, feel the pain this time around,” says Pam Danziger, president of Unity Marketing, and author of a white paper on predictions for the luxury market in 2008.

Ominously, she also adds that “luxury consumers have never expressed such a dismal view of their financial status, their feelings about the direction of the country as a whole and their plans for future spending.”

The light, if any, at the end of the tunnel, could be the recent moves by the Federal Reserve to lower interest rates. Should inflation occur due to the relaxing of the money supply, consumers may look at certain luxury items, like jewellery, as ‘investments,’ or hedges against inflation.

We’re pleased to announce the resurrection of LOLFed, the only site, as far as we know, to mesh LOLCats and Federal Reserve chairmen together. The current flurry of Fed activity meant it was bound to happen.

This is great. Watch Maria Bartiromo freak out at his “house of cards” comment.

I gotta say something. CNBC’s evening shows during the week are what I call “jerkoff shows”.

Fast Money, Mad Money, Kudlow & Company… all these shows are designed to jerk you off while the market burns down. It’s becoming more and more obvious every day.