Note that I am a paid subscriber and receive no compensation if you do subscribe.

• Housing Starts Continued Three-Year Pattern of Bottom-Bouncing
• Economic Recovery Never Happened; Hyped Gains Were Based on Gimmicked Inflation Adjustments
• Current Downturn Already Exceeds Duration of Great Depression’s First Down-Leg

Note that I am a paid subscriber and receive no compensation if you do subscribe.

• GAAP-Based 2011 Federal Deficit Likely Within Five- to Seven-Trillion Dollar Range
• Effects of High Oil Prices Still Spreading in Broad Economy
• October’s Annual Inflation: 3.5% (CPI-U), 3.9% (CPI-W), 11.1% (SGS)
• Real Retail Sales and Industrial Production Gained in October But the Series Share Inflation-Adjustment Issues

Note that I am a paid subscriber and receive no compensation if you do subscribe.

• Monthly Payroll and Unemployment Changes Were Not Statistically Meaningful
• October Payroll Employment Not Only Was 6.5 Million Below the Pre-2007 Recession High, But Also Was 1.0 Million Below the Pre-2001 Recession High
• October Unemployment: 9.1% (U.3), 16.2% (U.6), 22.9% (SGS)
• Annual Growth in October Money Supply M3 Held at About 2.6%

October 27th, 2011

• Consumer Confidence and Sentiment Sink to Levels Never Seen Outside of the Worst Recessions
• No Economic Recovery Is in Place or in the Works
• Third-Quarter GDP Gain Not Statistically Meaningful
• GDP Nonsense: Consumption Surged 1.7% While Disposable Income Collapsed 1.7%?

www.shadowstats.com

How to you get elected to political office? By being proficient at economics or financial management? By being honest or compassionate? Perhaps by having excellent leadership skills? Forgive me for being a bit cynical, but it seems to me that you get elected to political office by being good at campaigning – and that may have nothing to do with any of the desirable characteristics just mentioned.

So I would suggest that we not get too surprised by the mess in which our country finds itself. While it would be easy to engage in lengthy political discussions relative to our current crisis, I’m going to keep this blog focused on pursuing ideas each of us can employ to succeed regardless of what or elected “leaders” do or fail to do. And I’ll leave the political battle to the other bloggers – there are plenty of them.

• Consumer and Wholesale Inflation Jumped in September
• September’s Annual Inflation: 3.9% (CPI-U), 4.4% (CPI-W), 11.5% (SGS)
• Annual PPI Inflation Hits 6.9% in September

When money is tight, those credit cards look real tempting. However, you cannot afford to get trapped in a vicious circle of debt because it will only make it more difficult for you to deal with emergency situations. Instead of spending on credit cards, work to save money and only use credit cards in emergencies. You’ll avoid more debt, which will help in the long run.

- The Great Downturn Deepens as Household Incomes Collapse
- September Retail Sales Gain Exaggerated by Poor-Quality Seasonal Adjustments
- Trade Deficit Still Suggests A Positive Contribution to Third-Quarter GDP

Now I’m not talking about opening a retail outlet or starting a lawn-care business. What I’m suggesting here is a source of extra income that you can develop at a reasonable pace now while you’re still employed, and that is a source of income that you would be happy to take with you into retirement. It well worth your consideration.

I don’t want to get trapped into the “gloom and doom” sort of thinking that is so prevalent in many of the current discussions of our economic situation. That said, we do face a whole array of unresolved problems – and this coupled with a government that clearly has no coherent plan for evaluating, let alone solving them, does not breed optimism. If your strategy for financial security relies on the government getting us through this “rough patch” so your 401K grows nicely and your government pension is secure, you might want to re-think that. Or plan on a much reduced standard of living in retirement. Hence my suggestion you look at the concept of residual income from your own business you run from your home.

Assuming this is of interest to you, let me suggest some characteristics that I believe should be part of a such an enterprise:

• Can do it from anywhere
• Does not require daily activity
• Free of licensing or permit requirements
• Has relatively low exposure to liability issues
• Minimal start up costs
• Plenty of resources available on the business so you can shorten the learning curve

Writing comes to mind. And there are tons of different styles of writing and prospective customers for your work. There are all sorts of business models that work for the internet, although this area is not without plenty of scams you need to avoid.

My purpose here, though, is not to suggest business models for you. I want to get you thinking about diversifying your sources of income by adding a stream of residual income. You might even find it helpful before retirement rolls around.

Of course, one day – or even a few months – do not determine a proper investment strategy. So I am not suggesting you panic and make any changes in your strategy based on today’s market action. But if you are out of the loop and just letting someone manage your money, I suggest you get into the loop. No one cares as much about your assets as you do. Regardless of whether you are a self-directed investor making your own investment decisions or whether you have your funds with a broker who has discretion in how those funds are invested, you need to have your head in the game. You need to watch the markets. Learn about the markets. Understand the markets. Challenge assumptions. And don’t throw up your hands saying, “I don’t have time.” Or, “I can’t understand all this financial stuff.” Yes, you can understand the financial markets, and yes, you do need to make the time to do so.

After all, your financial future is important to you, right?