Trovena Weblog

Credit Crunch - What's it all about?

I seem to remember hearing in a marketing presentation that the normal attention span for a “pitch,” once interest is established, is around five to ten minutes.  Never to be out done, our media tries to answer complex questions with ten second sound bites.  So, it is not surprising that there is a great deal of misunderstanding about our current stock market decline, its causes, and its eventual recovery.  Allow me to spend the next five to ten minutes summarizing my interpretation of the issues.

First, the ten second media version is that the current crisis is the result of sub-prime mortgages.  While certainly a major piece of the puzzle, what is seldom discussed is where that piece falls and the short and long term ramifications.

Eric Toya is Quoted in the L.A. Times

This one is really funny.  Los Angeles Times Personal Finance Writer, Kathy Kristof, calls our office last Thursday because she is working on a story about the high cost of high school Proms, and wants to talk with Scott Leonard about any advice he might offer to clients.  In particular, she was looking for a financial planner with high school aged kids.  Instead she got me!

I explained that I do not have kids, and certainly not ones in high school.  However, as I am in the middle of planning a wedding that falls in the middle of Prom season, I can share my experience with elevated prices for limos, flowers and reception venues.  We chatted a bit about when I was in high school, and somehow something I said there was quotable!

Check it out:

"Prom Night Need Not Break the Bank," by Kathy M. Kristof, Personal Finance Writer for the Los Angeles Times.

I'm pretty close to the end of the article.  And for the record, it was Mom's four year old Toyota.  So, while not an uncle's Mercedes, still a far cry from my 1978 Ford Fairmont Station Wagon with fake wood paneling on the side!

"Are you PERSONALLY in a recession?"

I had this conversation with a friend recently:

Friend:  "I hate my cell phone.  I want to get a new one, but I can't justify the purchase because we're in a recession."

Me:  "I'm not sure about the economy, but are you in a recession?"  (I asked this knowing that he has a stable job, and is a conservative spender)

Friend:  "Well no, but I guess I'm a worrier."

As it turns out, he's not alone.

Reader Poll: What percent of your income do you give to charity?

Studies abound show that the amount that people donate to charity is correlated (not necessariy positively) to their household income, age and other demographics.  There are some interesting articles about this topic that I will write about later, but for now I wanted to take a poll among readers.  What percent of your income do you donate to charity?

How do you choose which charity gets yor donations?

Giving by individuals continues be dominate the landscape of charitable giving.  Individual giving consistently ranks somewhere around 75% of all charitable giving in America.

So, the question is how, out of approximately 1.4 million different charities to choose from, do you select whom is going to get your charitable gifting dollars?

People generally give to those charities with which they feel a personal, emotional connection.  This is why universities, religious organizations and hospitals are continually among the most successful fund-raisers.  You feel connected to your alma mater, your church, and the hospital that treated you or someone you love very well through difficult times.

But what are the other ways that people determine which charities to support?