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%.

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.

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.

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.

If there’s really a huge excess of supply, it would restrain demand

The Federal Reserve is considering contingency plans to bolster its lending power, in case measures it has taken to rescue the troubled credit markets fail. One option being considered is to have the Treasury borrow more money than it needs to fund the government and keep the proceeds on deposit at the Federal Reserve.

Other options include issuing debt under the Federal Reserve’s name instead of the Treasury’s, and asking Congress for immediate authority for the Fed to pay interest on commercial bank reserves rather than waiting until a law enacted earlier allows it to in 2011.

If the Fed were to issue debt, it would be following the Bank of England and this could involve issuing short-dated paper in the two-to-five-year Treasuries area. Secondly, the market would not like the Fed to issue long paper which would hang for many years. Should the Treasury decide with Congressional approval to issue more bonds to fund the Fed, there should be good demand for extra paper due to the backdrop of weakening global economic growth, although this would depend on the ultimate size of the issuance.

 Young people’s financial know-how has gone from bad to worse.

High school seniors, on average, answered correctly only 48.3% of questions about personal finance and economics, according to a nationwide survey released Wednesday by the Federal Reserve. That was even lower than the 52.4% in the previous survey in 2006 and marked the worst score out of the six surveys conducted so far.

Fed Chairman Ben Bernanke stressed in a speech that young people must sharpen their financial knowledge so they are in a better position to make sound investment decisions throughout their lives. College students’ financial literacy also was tested this year. They answered 62% of the questions correctly.

The larger problem is a country where knowledge—especially the kind that may be acquired through schooling—is not valued. That’s why the most popular kids in school are never the top students. That’s why the smart kids get picked on.

5,200 Cameras In One Area Is Alot!

D.C. officials are giving police access to more than 5,000 closed-circuit TV cameras citywide that monitor traffic, schools and public housing — a move that will give the District one of the largest surveillance networks in the country.

The Video Interoperability for Public Safety (VIPS) program will consolidate the more than 5,200 cameras operated by D.C. agencies — including D.C. Public Schools and the D.C. Housing Authority — into one network managed by the city’s Homeland Security and Emergency Management Agency.

Are people having four or five children just because they can? Because they feel that it shows their wealth and status?

Raising kids today costs a fortune. Last month, the Department of Agriculture estimated that each American child costs an average of $204,060 to house, clothe, educate and entertain until the age of 18. What’s worse, the desire to have another child opens one up to charges of elitism and status consciousness. In many major U.S. cities and their suburbs having three or more children has now come to seem like an ostentatious display of good fortune. The family of five has become “deluxe.”

We not only wonder, we marvel, we get jealous, we gawk. “Having three kids in the city is a way of showing off, absolutely,” says Elisabeth Egan, who, like many families she knows, moved out of New York to the suburbs of Montclair, N.J., to manage the feat. “A third child in the city is definitely a luxury good.”

A February analysis of Current Population Survey data by the Council on Contemporary Families found that in the past 10 years, the top-earning 1.3% of the population has seen an uptick in families with three or more children. According to the National Center for Health Statistics, 12% of upper-income women had three children or more in 2002, compared with only 3% in 1995.

For a couple’s every conceivable wish or worry, the parenting industry knows the precise formula of guilt, fear, hope, love and desire that will empty the parental wallet. Rather than fret about spending too much money, most parents these days are consumed by the anxiety of underspending on their children.

So parents quickly adjust to the demanding realities of the child-rearing industry. Today’s American children, by contrast, get an average of 70 new toys a year.  Baby showers have replaced bridal showers as the blowout du jour; American women today have an average of three. The accompanying baby registries have mushroomed into a $240 million business. In upscale urban areas and tony suburban enclaves, where luxury families are flourishing, that can translate to $800 a week for child care alone. So-called high-end nannies (those who hail from licensed agencies and come equipped with working papers and even driver’s licenses) can cost more than $50,000 a year on the books.

Most families simply can’t afford all this. And surely it can’t all be necessary.

Programs provide chefs, home repair and other services to help suburban seniors age in place.

Many community planners believe that aging-in-place programs could help many elderly homeowners avoid institutional care. More than 100 programs exist in places as diverse as Boston’s Beacon Hill, New Canaan, Conn., Madison, Wis., and the Indianapolis suburbs. Often, it’s the small, inexpensive service (a ride to a doctor’s appointment or home-delivered groceries) that can make all the difference.

Aging-in-place programs got their start in 1986 in Penn South, a ten-building apartment complex in Manhattan. Residents and local social-service agencies created the program after an 84-year-old woman with dementia wandered onto a roof and died of exposure. “This event spoke personally to residents about their vulnerability,” says Fredda Vladeck, director of the Aging in Place Initiative at the United Hospital Fund.

ElderSource created Elder-Friendly Communities, which covers an area of mostly two-story, three-bedroom homes built 40 to 50 years ago. “Our program works in the suburbs because we literally went door-to-door to introduce ourselves,” says Claudette Einhorn, chairperson for ElderSource. Elder-Friendly Communities’ vendors, such as drivers and gardeners, offer discounts from 5% to 50%. The program charges an annual membership fee of $120. Beyond the support services, the program provides social and educational activities. In some communities, the residents themselves are creating aging-in-place programs.

 The Labor Department on Friday said nonfarm employment fell by 80,000 jobs in March, more than expected and the biggest drop in five years. Financial markets saw this as reinforcing the need for further Federal Reserve interest rate cuts.

Adding to the bleak picture, the Labor Department said a total of 152,000 jobs were lost in January and February, sharply above the prior estimate of 85,000, and the jobless rate jumped to 5.1% from 4.8%, the highest since September 2005. Construction employment fell 51,000, the ninth consecutive month of job losses.

Factory employment fell by 48,000, the biggest decline since July 2003, exacerbated by a 24,000 fall in auto manufacturing jobs that the department said likely reflected the impact of a strike at an auto parts maker. Most economists, having seen a third monthly decline, were now convinced that the economy is in recession.

The numbers drew calls from Democratic presidential hopefuls Hillary Clinton and Barack Obama for aid to families facing foreclosure on their homes, while Republican candidate Senator John McCain said tax cuts and streamlining burdensome regulations were needed to foster growth.

A New York Times/CBS News poll released on Friday showed the economy’s deepening woes were weighing heavily on the minds of Americans. Of those polled, 81% said they believed things were “pretty seriously” on the wrong track, up from 69% a year ago and 35% in early 2002.

This billboard and press campaign is now running in Mexico, is a colorful map depicting what the Americas might look like in an “Absolut” — i.e., perfect — world. The U.S.-Mexico border lies where it was before the Mexican-American war of 1848 when California, as we now know it, was Mexican territory and known as Alta California.

The campaign taps into the national pride of Mexicans, according to Favio Ucedo, creative director of leading Latino advertising agency Grupo Gallegos in the U.S. Ucedo, who is from Argentina, said: “Mexicans talk about how the Americans stole their land, so this is their way of reclaiming it. It’s very relevant and the Mexicans will love the idea.”

The U.S. is the largest importer of Absolut in the world, so I’m perplexed that it concluded there could be a net gain by this ad campaign. Absolut really blew it by uncorking this one. Perhaps it has consumed too much of its own product. They’ll have plenty of surplus stock to drown in though. But don’t worry, folks. This is in no way a threat to our national sovereignty.

 4 Companies That Conquered America

Accounting for almost 30% of world GDP, the United States is the world’s largest and most demanding market for almost everything from oil to microprocessors to premium coffee. Companies around the world aspire to do business in the U.S., or at least with U.S. companies in their home markets. By doing so, they learn much about the latest management practices, they can be closer to the cutting edge of innovation, and they can boost their reputations by supplying well-known U.S. firms.

So how do you penetrate the U.S. market? The annals of business are littered with foreign companies that have never quite succeeded in the USA. But here are four companies that have. Each carries a special lesson.

1. Royal Bank of Scotland. This company built up a strong retail market share in the U.S., not under the RBS brand, but through a series of acquisitions of regional (not national) banks. RBS is adding value for its shareholders by letting these banks retain their individual brand identities, by focusing on improving back office efficiencies, and by having the highly respected CEO of one of the acquired entities lead the combined U.S. organization.

2. IKEA. IKEA offers a furniture retailing value proposition and experience unparalleled in the U.S. market. There are no national furniture retail chains, making market penetration easier. IKEA’s location selection expertise and their established global supply chains enable them to offer exceptional category-killer prices that are further keys to success.

3. ING. The Dutch bank converted its weakness (no retail branches in the U.S.) into a strength. Following a successful Canadian market test, ING gave its entrepreneurial general manager the green light to offer retail banking services to U.S. consumers but exclusively on an online basis. Taking advantage of its low no-bricks-and-mortar cost structure, ING was able to offer generous rates on certificates of deposit.

4. Dyson. The British home appliance maker earned a break when it managed to get a Best Buy buyer to take one of its vacuum cleaners home to test. The buyer was impressed. Fortunately for Dyson, Best Buy became the first U.S. retailer to stock Dyson vacuum cleaners. Electronics retailing in the U.S. is concentrated (10 chains control 60% of the market) and tough to penetrate. But Dyson could not have succeeded had its products not been superior to other vacuum cleaners already in U.S. stores.

Criminals Have It Too Good In America

Lawmakers from California to Kentucky are trying to save money with a drastic and potentially dangerous budget-cutting proposal: releasing tens of thousands of convicts from prison, including drug addicts, thieves and even violent criminals. Officials acknowledge that the idea carries risks, but they say they have no choice because of huge budget gaps brought on by the slumping economy.

At least eight states are considering freeing inmates or sending some convicts to rehabilitation programs instead of prison.   If adopted, the early release programs could save an estimated $450 million in California and Kentucky alone. A Rhode Island proposal would allow inmates to deduct up to 12 days from their sentence for every month they follow rules and work in prison. Even some violent offenders would be eligible but not those serving life sentences.

In California, where lawmakers have taken steps to cut a $16 billion budget deficit in half by summer, Gov. Arnold Schwarzenegger proposed saving $400 million by releasing more than 22,000 inmates who had less than 20 months remaining on their sentences. Violent and sex offenders would not be eligible.

So where exactly are the savings extracted from? Laying off prison guards and making it more difficult to send parole violators back to state prison would account for part of the savings. To curb spending, lawmakers have offered a bill to make about 7,000 drug offenders in prison eligible for parole. A second proposal would allow the parole board to release inmates convicted of selling marijuana and prescription drugs after serving just a quarter of their sentences. Currently, they must serve 85% of their terms before release.

Law enforcement officials and Republican lawmakers immediately criticized Schwarzenegger’s proposal, which would apply to car thieves, forgers, drunken drivers and some drug dealers. Some would never serve prison time because the standard sentence for those crimes is 20 months or less.

Gov. Steve Beshear has said Kentucky must review its policies after the state’s inmate population jumped 12% last year — the largest increase in the nation. Kentucky spends more than $18,600 to house one inmate for a year, or roughly $51 a day. In California, each inmate costs an average of $46,104 to incarcerate. I now favor death sentence for the extreme crimes. These are cheaper.