The bruised U.S. economy limped through the first quarter, growing at just a 0.6% pace as housing and credit problems forced people and businesses alike to hunker down. The statistic did not meet what economists consider the classic definition of a recession, which is a retraction of the economy. This means that although the economy is stuck in a rut, it is still managing to grow, even if modestly.

Consumers—whose spending is vital to the country’s economic health—turned much more cautious, also restraining overall economic growth in the first quarter. Their spending rose at just a 1% pace. To bolster the economy, the Federal Reserve is expected to lower a key interest rate by one-quarter percentage point to 2%.

Accelerating Price Declines in Most Big Cities

A Washington think tank is warning that housing prices are falling at an accelerating level, destroying wealth at a pace that will cost the average homeowner $85,000 in lost wealth this year alone.

At the same time, the price decline implies an incredibly rapid loss of wealth. In real terms, the rate of price decline in the 20-city index would imply a loss of almost $6 trillion in real housing wealth over the course of the year, an average of $85,000 per homeowner. The only time that many Americans have lost that much wealth in a short period of time would have been during the Great Depression.

Car Buying Is Easy If You Have The Right Resources

With car sales expected to be down this year, many dealerships will be desperate for any sale they can get, says Danny Chan, CEO of AutoBrag.com, a car-shopping comparison Web site that compiles price data from no-haggle dealerships. The slow conditions could prompt many of them to accept better deals as they struggle to keep their doors open, he added. But even though dealers might be hungry to make a deal, don’t expect that they’ll give in to your offers without a fight.

If you’re considering the purchase of a new car, you’ll need to prepare before browsing the show floor. Here are five tips on how to get a good deal on your new set of wheels:

1. Hit The Internet
The Web has a wealth of automobile information that can help consumers know how much they should be paying for a car and what deals they can get. AutoBrag.com tells consumers how much cars are selling for at actual no-haggle dealerships, and shoppers can use those quotes during their negotiation. Deals can also be found by expanding your online search to dealers beyond your immediate area. Even if the best deal is states away and the automobile needs to be transported to you, it may be worth the hassle.

2. Know What You Can Afford and Your Loan Options
Before negotiating, it’s also important to know exactly how much you can afford. But don’t max out your budget. Experts also advise not extending the term beyond the standard five years to bring monthly payments down. More manufacturers and dealers are now offering 7-year car loans; for a $20,000 car, the loan would rack up an additional $5,335 in interest.

And investigate loan options before hitting the showroom. Often, credit unions offer favorable automobile financing, Chan said. If opting for dealer financing, make sure you know what interest rate you should be paying before signing, he said.

3. Consider Older Model Years
When the 2009 models come out and 2008 cars are still on the lot, the older new cars can be bought at a decent discount for good reason — their age will cause them to depreciate faster. Two months before the release of the 2009 Toyota Camry, the 2008 model was being sold to consumers for an average of 5.32% below the manufacturer’s suggested retail price, Chan said. But during February 2008, when the new model was released, the 2008 model was being sold for an average 10.39% below MSRP.

4. Negotiate Before Incentives
Get down to a good price before adding an incentive, even if adding a manufacturer’s rebate pushes the price below invoice. In fact, keep all the transactions separate — negotiating the price before the financing and the trade-in value. You’ll often get the most for your vehicle if you sell it yourself. But if you decide to trade in your old vehicle, use the Internet to learn what it’s worth. You can simply ask AutoBragBlog.com for your used car value.

5. Don’t Cave To Pressure
It’s a buyer’s market, so don’t be intimidated and be aggressive in your negotiating. If the salesmen won’t budge and you can’t get the price you want, be prepared to walk away and try another dealership, Chan said. He also recommends not paying for extras such as paint protection; dealers often put a huge mark-up on this extra, and you may be better off having it done somewhere else.

If you didn’t have ethanol, you would not have the prices we have today

The globe’s worst food crisis in a generation emerged as a blip on the big boards and computer screens of America’s great grain exchanges. As prices rise, major grain producers including Argentina and Ukraine, battling inflation caused in part by soaring oil bills, were moving to bar exports on a range of crops to control costs at home. It meant less supply on world markets even as global demand entered a fundamentally new phase.

At the same time, food was becoming the new gold. Investors fleeing Wall Street’s mortgage-related strife plowed hundreds of millions of dollars into grain futures, driving prices up even more. By Christmas, a global panic was building. With fewer places to turn, and tempted by the weaker dollar, nations staged a run on the American wheat harvest.

Foreign buyers, who typically seek to purchase one or two months’ supply of wheat at a time, suddenly began to stockpile. They put in orders on U.S. grain exchanges two to three times larger than normal as food riots began to erupt worldwide.

The food price shock now roiling world markets is destabilizing governments, igniting street riots and threatening to send a new wave of hunger rippling through the world’s poorest nations. It is outpacing even the Soviet grain emergency of 1972-75, when world food prices rose 78%. By comparison, from the beginning of 2005 to early 2008, prices leapt 80%. Much of the increase is being absorbed by middle men — distributors, processors, even governments.

At least 14 countries have been racked by food-related violence.The crisis, it fears, will plunge more than 100 million of the world’s poorest people deeper into poverty, forced to spend more and more of their income on skyrocketing food bills.

People worldwide are coping in different ways. Although China has tried to calm its people by announcing reserve grain holdings of 30 to 40% of annual production, a number that had been a state secret, anxiety is still running high. In India, the government recently scrapped all import duties on cooking oils and banned exports of non-basmati rice. Even wealthy nations are being forced to adjust to a new normal. In Japan, a country with a distinct cultural aversion to cheaper, genetically modified grains, manufacturers are risking public backlash by importing them for use in processed foods for the first time.

In the United States, experts say consumers are scaling down on quality and scaling up on quantity if it means a better unit price. In the meat aisles of major grocery stores, steaks are giving way to chopped beef and people used to buying fresh blueberries are moving to frozen. Some are even trying to grow their own vegetables.

A big reason for higher wheat prices, for instance, is the multiyear drought in Australia, something that scientists say may become persistent because of global warming. But wheat prices are also rising because U.S. farmers have been planting less of it, or moving wheat to less fertile ground. That is partly because they are planting more corn to capitalize on the biofuel frenzy. If market forces had played a larger role in food trade, some now argue, the world would have had more time to adjust to more gradually rising prices.

The number of California homes lost to foreclosure in the first quarter surged 327% from year-ago levels — reaching an average of more than 500 foreclosures per day.

The Result: 517 foreclosures every day in the first quarter of 2008. The main factor behind this foreclosure surge remains the decline in home values. Additionally, a lot of the ‘loans-gone-wild’ activity happened in late 2005 and 2006 and that’s working its way through the system. The big ‘if’ right now is whether or not the economy is in recession. If it is, the foreclosure problem could spread beyond the current categories of dicey mortgages, and into mainstream home loans.

Greed does terrible things. People going through foreclosure don’t deserve any kind of sympathy. They should’ve read the fine print. Too many people living above their means to impress the guy next door who is also sinking.

Gas and oil prices pushed further into record high territory Tuesday, with retail gas reaching a national average of $3.51 for the first time and crude nearing $120 as the dollar fell to a new low against the euro. At the pump, the national average price of a gallon of regular gas rose 0.8 cent.  

Gasoline supplies are also being hurt by low profit margins. Refiners have to buy the crude they turn into fuel, but falling demand for gasoline has hurt their ability to raise gas prices as much as they would like. Gas prices are nearly 66 cents higher than last year, when they peaked at a then-record of $3.23 in late May, and have prompted many analysts to raise their estimates of where gas is going to go.

The souring job market and rising costs of the usual teenage indulgences (a slice of pizza, a drive to the mall, the hottest new jeans) are causing teens to do something they rarely do: be thrifty. Jobs for teens have been less plentiful, and parents who supply the allowances are feeling the economic pinch themselves.

Secondhand clothing chains have seen business surge this year as teens and their parents buy popular brands like Gap, Banana Republic and Juicy Couture at a fraction of the regular price.

Teen hiring has slumped by 5% since March 2007, with many mom-and-pop stores, which typically hire younger workers, laying off employees. Hiring in the overall job market fell by just 0.1% during the same period. That’s still not as bad as the 13% drop in teen hiring in the early 1990s. Last month, teen retailers suffered an 8% drop in sales at established stores. The good news is that the under-20 crew is still spending on tech gadgets like iPods, cellphones and headsets.

Job scarcity? There’s plenty of farm jobs and food factory jobs available. Teens are just not willing to work for minimum wage or even higher. Actually illegal immigrants are being hired over teenagers. Teens can’t work past a certain time and can’t work as many hours as an adult, so employers do not want to hire them. Here’s how to survive these new times: swap meet, garage sales, 99 cent store, good will, salvation army and Walmart.

Chinese intertwine business and personal affairs much more deeply. They do things for their partners even if they are personal affairs.

If you wander into any of China’s five floored bookstores, the first thing you notice right when you enter the store won’t be the newest hardcovered fictions. It’ll be management books written by successful American businessmen. On shelf after shelf, you could see copies of Jim Collins’s “Good to Great,” Jack Welch’s “Straight From the Gut,” Tom Peters’s “Re-Imagine!” and just about everything the late Peter Drucker ever wrote. One section you won’t find in Chinese bookstores is a section for management or human resources.

There’s a good reason for this. In the West (not to mention Japan and South Korea) management skills are a given. Graduate schools of management churn out M.B.A.’s, while instilling the basic processes and systems that virtually all multinational companies rely on. People who rise to the top of companies are the ones who have mastered the art of management. But there are also many first-rate managers who populate the middle ranks of companies. They are the lifeblood of most big companies.

That’s not the case in China. The shortage of managerial talent is huge. There just aren’t very many people here who have the range of skills you need in that position. Xiang Bing, dean of the Cheung Kong Graduate School of Business, said: “We Chinese are so willing to work hard for money. We are intelligent. We have the drive and the passion. But we put too much attention on technology and not enough on institution-building. And our soft skills are a real weakness.”

One issue with management is that most Chinese entrepreneurs hire friends and family because they don’t trust people they don’t know. And if they don’t get help fast, they are going to lose control of their rapidlygrowing businesses. Rapid growth, though, is only one of the issues these entrepreneurs are facing. Every bit as difficult are ingrained mind-sets and attitudes that can make it difficult for Chinese executives to adapt professional management techniques.

Many Chinese entrepreneurs (even those who have graduated from the executive M.B.A. program) don’t want to hire M.B.A.’s because they bridle at having to pay professional management salaries. Another problem is that many Chinese executives believe that because it is a Chinese business, professional managers won’t fit in the system.

When dealing with each other, the Chinese, quite simply, do business differently than Western companies do business. For one thing, there is a lot of petty corruption that is an ingrained part of business, especially among the state-run companies. Purchasing managers favor one vendor over another because they get a kickback. A sales rep buys customer loyalty with under-the-table payments. And so on. People also tend to put their own interests over the interests of their company — not a huge surprise, given that everyone worked for the state just a generation ago.

Finally, there is the gnarliest issue of all: the importance placed on the deep, intertwining set of relationships known as guanxi. Unlike the West, you don’t just have a business relationship in China; you have a relationship that interchangeably mixes the personal with the professional.

One billion dollars is no longer enough to gain entry to Russia’s rich list.

Ten billionaires failed to make Forbes magazine’s annual list of the 100 richest Russians that is led by those who built their fortunes on the country’s metals resources. Russia’s richest 100 people had a combined fortune of $522 billion - 3.8 times more than the total when Forbes first published a Russian list in 2004.

Another reason for the increase in dollar billionaires was the fall in the value of the U.S. currency. Boo!

China Surpasses USA in Exports and Now Riding Germany’s Tail

China has overtaken the US as the world’s second-biggest exporter, the World Trade Organisation (WTO) said yesterday. WTO economists are also sceptical about how long emerging developing countries that have spearheaded global growth “can maintain a strong pace in the face of sluggish demand in major developed markets and rising inflationary pressures.”

1. Germany   2. China   3. USA

Germany!? How often do you see ‘Made in Germany’ on labels. Apart from some cars and Adidas, what else does it export?

Another stellar performance by China, which recorded a 26% rise in its merchandise exports to $1.2 trillion, enabled it to surge ahead of the US to be ranked the world’s second biggest exporter and is breathing down the neck of top-placed Germany.

Major Chinese banks are racing to open branches across the United States, but they are unlikely to make much money from them any time soon. The banks, once in deep financial trouble but now much stronger after a series of Chinese government bailouts, are increasingly interested in opening overseas shops, especially in major U.S. cities like New York. The idea is mainly to raise their image as international banks that are publicly traded rather than as state-owned agencies controlled by Beijing.

So far, only two Chinese banks — Bank of China and Bank of Communications – have branches in the United States. At least a half dozen Chinese banks, including Industrial and Commercial Bank of China and smaller rival Merchants Bank, plan to seek approval from the Fed to launch U.S. branches this year. Almost every time U.S. Treasury Secretary Henry Paulson traveled to Beijing to lobby officials for U.S. banks to have wider access to Chinese financial service sectors, Paulson would receive similar requests from his Chinese contacts.

Earners Feel More Secure Due To Their Confidence To Control and Preserve It.

PNC Wealth Management conducted the survey of people with more than $500,000 of investable assets. The Wealth and Values Survey showed that 69% of “wealthy” Americans accumulated most of their money through work, business ownership or investments; 6% percent received money through inheritance; and 25% gained wealth through a combination of inheritance and earnings.

A couple of things separate the earners from the inheritors: First, earners were in control of making their money, and therefore feel more confident about preserving it or making even more. Second, earners likely took large risks to achieve wealth. As we all know, as risk increases, so does return. Accordingly, earners are likely more comfortable with the concept of risk.

Driving the point of risk tolerance home, the report says earners also have a higher risk tolerance than heirs: 39% of earners rate themselves as moderate to risky investors compared with 21% of heirs. Those who inherited their wealth often view themselves as stewards for future generations. As a result, they tend to be more conservative in their approach to investing.

Other Intersting Finds:

•  Heirs are more than twice as likely to say “Having a lot of money brings about more problems than it solves.”

• More people who have earned their wealth (37%) agree with the statement: “The money I have made so far has come from being in the right place at the right time.“

• Far more of earners agree with the statement: “Every generation should be responsible for creating its own wealth” along with “It is more important for children to learn the value of money through hard work.”

Not a bad idea, adults!

Older Americans Are The Happiest

Americans grow happier as they grow older. The study also found that baby boomers are not as content as other generations, African Americans are less happy than whites, men are less happy than women, happiness can rise and fall between eras, and that, with age the differences narrow. The happiness measure is a guide to how well society is meeting people’s needs.

Charted happiness across age and racial groups, Yang Yang, Assistant Professor of Sociology at the University of Chicago, found that among 18-year-olds, white women are the happiest, with a 33% probability of being very happy, followed by white men (28%), black women (18%) and black men (15%).

Differences vanish over time, however, as happiness increases. With age comes positive psychosocial traits, such as self-integration and self-esteem; these signs of maturity could contribute to a better sense of overall well-being. Second, group differences in happiness decrease with age due to the equalization of resources that contribute to happiness, such as access to health care, Medicare and Medicaid, and the loss of social support due to the deaths of spouses and friends.

Looking over the study’s 33-year period, she noticed definite upticks when the nation flourished economically. For example, she found that 1995 was a very good year on the happiness scale.

 Wherever you turn, the rise of Asia is making its impact felt on our existence.

To many Victorians, British supremacy was a simple matter of racial supremacy - Europeans, and the English in particular, were fated to be the masters. The truth is that they are masters of the world no more.  The global power shift from the West to the East is no longer just a matter of debate confined to learned journals and newspaper columns - it is a reality that is beginning to have a huge impact on our daily lives.

Napoleon III compared China to a sleeping giant and warned: “When China awakes, she will shake the world.” After a long hibernation, China, and her 1.3 billion people (twice the population of the U.S. and EU combined) is awaking almost overnight. And not just China. The world’s second most populous country, India, is industrialising at a historically unprecedented pace.

Like anything, there are downsides that are becoming more apparent. Unskilled workers in the West have become unsettled by the threat to their jobs as production moves East. The most vulnerable Western workers have found their wages stagnate as they struggle to compete in an increasingly global market place. And competition for raw materials is pitting East against West.

Europeans have, for half a millennium, been unchallenged as the global colonisers, but last month the respected Economist magazine dubbed the Chinese “The New Colonists“.  The dire warnings from the International Monetary Fund this week that the West now faces the largest financial shock since the Great Depression, while the Asian economies are still powering ahead, simply underlines our vulnerability in this new world order.

There is an infectious confidence in Bollywood, and the price of Chinese antiques is rocketing as the newly rich Chinese decide they want a slice of their history.

Asian countries are not just buying up foreign raw materials, but as their companies try to become global leaders, they are buying up Western companies. From Kazakhstan to Indonesia to Latin America, Chinese firms are gobbling up oil, gas, coal and metals. Canadian authorities were recently alarmed to find the Chinese interested in exploring the Arctic Ocean, in a bid to get a share of the minerals beneath the thawing icecap.

 And Western governments are concerned that the rules of the game are changing. Most worryingly, as China’s brutal suppression of the once independent Tibet shows, this is not a superpower that respects Western standards on human rights. Western attitudes of superiority to China and the rest of the East will also subside, as Westerners realise they are no longer the masters of the world.

Study Shows Average Age of Management Positions Now 25 Years Old

Generation Y people born after 1981 tend to climb to managerial posts in companies at a relatively much younger age than their older counterparts. Employees born after 1980 tend to first become managers at an average age of 25.3, compared to 31.8 for their counterparts who were born in the 50s. The Y-generation people seem to climb the career ladder faster as they tend to have stronger ability to learn and a stronger work ethic, according to the poll.

Most of the business executives said they do not particularly consider employees’ ages when they are choosing new leaders within their corporations. They choose according to negotiation and coordination ability. The ability to solve problems and professional abilities are more important factors when they are considering promotions.

Interestingly enough, the Y-generation people do not necessarily perform well in management terms. According to company executives, managers aged 39-48 were the best performers.