A growing number of Chinese are joining tours organized especially for investors who want to take advantage of slumping U.S. real estate prices amid a financial crisis. While China’s ultra-rich have been buying property in the U.S. for years, the buying tours are new, made attractive by still-rising Chinese income levels and American real estate prices that have been falling for two and a half years.

More than 100 Chinese buyers have joined such tours since late 2008. The home-buying opportunities mirror a larger trend. Cash-rich Chinese companies are looking to buy resources made suddenly cheaper by the downturn or companies suffering under the global debt meltdown.

China had the world’s fifth-largest population of millionaires in 2008 with 391,000, up 20 percent from the previous year. Chinese buyers are looking at both commercial property and homes to rent out or use on business trips. And the U.S. has plenty of unsold homes to offer — 3.67 million as of the end of December.

Parents are suddenly saying ‘no’ and their kids are saying, ‘What do you mean?’

Indulged. Entitled. Those labels have become hot-glued to middle-class and affluent teenagers born after the last major economic downturn, in the late 1980s. They were raised in comparatively flush times by parents who believed that keeping children happy, stimulated and successful, no matter the cost, was an unassailable virtue. A 2007 study found that nearly 75% of parents caved in to their children’s nagging for new video games, half within two weeks.

The annual discretionary spending by teenagers, whose money comes from allowance, gifts and part-time jobs, had dropped 27% to $2,600, from its spring 2006 peak of $3,560. Panicked, stressed parents are struggling to explain and impose restraints, just when teenagers are expecting more spending money, not less. Many adolescents respond with anger at what they see as a bait-and-switch world, fear for their families and confusion about budgeting.

American teenagers, many of whom have weak quantitative skills, are generally naïve about finance. Meanwhile many had debit and credit cards, some were hard pressed to explain the difference. Regardless of family means, most did not have after-school jobs.

Parents hardly relish these conversations. As they sit down with their teenagers, they are agonizing over their own feelings of failure. “Parents are going to feel they’re not giving their kids everything,” said Madeline Levine, a California psychologist. “The kids are going to be confused. They’ve never known not having what they want. And the parents are going to have to tolerate their kids’ anger.”

In familial relationships, money can be a proxy for love and trust. When money has to be limited, underlying tensions become exacerbated. For some families, the financial crisis has been a rallying point, compelling them to articulate values and priorities for the first time. Market researchers say that teenagers are, out of necessity, adjusting. Last week’s survey showed that the amount teenagers allocated for clothes had increased 1%, but that they were patronizing stores with lower-priced labels.

Anecdotes like these prompt economists and therapists to find something positive in all the economic turbulence. The sooner we have these conversations in the family and as a society, the sooner we can focus on core values, and have a more realistic dialogue about the meaning of happiness and money.

Economic inequality is growing in the world’s richest countries, particularly in the United States, jeopardizing the American Dream of social mobility just as the world tilts toward recession, states a 30-nation report. The gap between rich and poor has widened over the last 20 years in nearly all the countries studied, even as trade and technological advances have spurred rapid growth in their economies.

With job losses and home foreclosures skyrocketing and many of these countries now facing recession, policy makers must act quickly to prevent a surge in populist and protectionist sentiment as was seen following the Great Depression. The United States has the highest inequality and poverty rates in the OECD after Mexico and Turkey, and the gap has increased rapidly since 2000

Rising inequality threatens social mobility — children doing better than their parents, the poor improving their lot through hard work — which is lower in countries like the U.S., Great Britain and Italy, where inequality is high, than countries with less inequality such as Denmark, Sweden and Australia.

In the United States, the richest 10 percent earn an average of $93,000 — the highest level in the OECD. The poorest 10% earn an average of $5,800 — about 20% lower than the OECD average. Some Americans make only $5,800 a year?! Who are these people?

Across the country, authorities are becoming concerned that the nation’s financial woes could turn increasingly violent, and they are urging people to get help. In some places, mental-health hot lines are jammed, counseling services are in high demand and domestic-violence shelters are full.

With nowhere else to turn, many people are calling suicide-prevention hot lines. The Samaritans of New York have seen calls rise more than 16% in the past year, many of them money-related. The Switchboard of Miami has recorded more than 500 foreclosure-related calls this year.

“The financial stress builds up to the point the person feels they can’t go on, and the person believes their family is better off dead than left without a financial support,” said Kristen Rand, legislative director of the Washington D.C.-based Violence Policy Center.

Rising mortgage defaults and falling home values are at the heart of it. More than 4 million Americans were at least one month behind on their mortgages at the end of June, according to the Mortgage Bankers Association. A record 500,000 had entered the foreclosure process. And that trend is expected to continue through next year, despite the current programs from the government and the lending industry to refinance delinquent homeowners into more affordable loans.

Adding to financially tense households is an air of secrecy. Experts said it’s common for one spouse to blame the other for their financial mess or to hide it entirely. Suicide is never the answer.

The National Debt Clock near Times Square in New York, shown yesterday, has run out of digits to record the growing figure. Great….

A good percentage of second homeowners fall into the retirement age demographic, and quite a few of them have at one time or another kicked around the idea of selling their primary residence and moving into that beachfront condo or mountain chalet full-time. But there are six reasons why you might consider renting your vacation home instead.

1.  Income from renting is better than foreclosure. According to government data, close to 40%, and perhaps as many as 50%, of the foreclosures in 2007 were of nonowner-occupied homes, which generally means vacation homes. S&P Chief Economist David Wyss expects this trend to continue into 2008 and 2009, pointing out that it’s psychologically easier for people to skip payments on a secondary home.

2.  Circumstances have changed since you made your retirement plans. Maybe grandchildren have arrived on the scene and you can’t bear the thought of moving hundreds of miles away from them. Regardless of specifics, your life bears no resemblance to what you thought it would be when you made your retirement plans.

3.  You’ve suddenly realized there’s no place like home. You’ve decided you like being near your friends, you don’t want to leave your church. Or perhaps you’d like to stay in your hometown most of the year (you kind of like the change of seasons) and spend the bitterest winter months in your beachfront condo. Renting your second home out during the time you are not staying there makes it financially feasible to keep both homes. Traditionally, many retirees would sell the home they lived in for 40 years, downsize to a smaller house or apartment, and split their time between that home and their vacation place in.

4.  You’ve decided to “retire” from retirement. It is not unusual for people to test-drive retirement and find that it’s just not for them. Work can provide many rich rewards—structure, social interaction, mental stimulation, and a sense of purpose—that people keenly miss when they retire. And when they discover that quitting the rat race isn’t quite what they thought it would be, more and more people are opting to return to the workplace. And (let’s be honest), sometimes people simply can’t afford to retire.

5.  Your fixed income hasn’t kept up with your lifestyle. Even when you’re happy to give up the daily grind of your job, losing the paycheck that comes with it can be pretty painful. Factor in inflation, rising taxes, and unexpected new expenses, and you may find that what seemed like a manageable cost of living five years ago doesn’t seem that way anymore. Your second home, even if it’s paid for, may start looking like a liability due to property taxes, homeowner’s association dues, and maintenance costs. 

6.  You’re currently renting your vacation home through a property management company, but you’d like to make more money. Ditching the middleman may be the way to go. Property managers simply charge a hefty fee for their services. In fact, you have to rent 10 more weeks with a management company to end up with the same amount of money you’d make renting by owner.

People who try renting by owner often end up liking it so much that they pour their earnings into another vacation home. a recent survey by the National Association of Realtors found that some 55% of vacation homebuyers said they were likely to purchase another property within two years.

‘It’s like a great hotel suite.’ 

New York-style luxury high-rise lifestyle is creeping into the wealthiest echelons, fed by trends like people looking to own more than one home, foreigners drawn by the weak dollar to invest in Los Angeles. For 2006 and 2007 in Los Angeles County, condos sold better than single family homes, even as the market was dipping, real estate data shows, although sales above $5 million are still few.

Los Angeles is becoming a more vertical area at all income levels as land for development becomes less plentiful and traffic congestion, and now high gas prices, steer more people to cluster around mass transit stations and more community-like sections

Competing to lure the ultra rich out of their grand homes and compounds is a new generation of high-end high-rises, with hundreds of units already under construction or planned that promise a higher level of services and more square footage than the typical luxury condo here, which usually sold for under $10 million.

Subprime was the tip of the iceberg. Prime will be far bigger in its impact.

The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is quickly building. Homeowners with good credit are falling behind on their payments in growing numbers, even as the problems with mortgages made to people with weak, or subprime, credit are showing their first, tentative signs of leveling off after two years of spiraling defaults.

The percentage of mortgages in arrears in the category of loans one rung above subprime, so-called alternative-A mortgages, quadrupled to 12% in April from a year earlier. Defaults are likely to accelerate because many homeowners’ monthly payments are rising rapidly. The higher bills come as home prices continue to decline and banks tighten their lending standards, making it harder for people to refinance loans or sell their homes.

What will sting borrowers more than rising interest rates, analysts say, is having to pay interest and principal every month after spending several years paying only interest or sometimes even less than that. Now, some borrowers could see their payments jump 50% or more, and they may not be able to sell their properties for as much as they owe.

Many borrowers who got these loans during the boom had good credit scores, but many of them owe more than their homes are worth. Analysts believe that many will not be able to or want to make higher payments.

In virtually every occupation, women are being afflicted on a large scale by the same troubles as men: downturns, layoffs, outsourcing, stagnant wages or the discouraging prospect of an outright pay cut. And they are responding as men have, by dropping out or disappearing for a while. When economists first started noticing this trend two or three years ago, many suggested that the pullback from paid employment was a matter of the women themselves deciding to stay home — to raise children or because their husbands were doing well or because, more than men, they felt committed to running their households.

“When we saw women starting to drop out in the early part of this decade, we thought it was the motherhood movement, women staying home to raise their kids,” says a senior economist at the Joint Economic Committee of Congress, which did the Congressional study, said in an interview. “We did not think it was the economy, but when we looked into it, we realized that it was.”

For the first time since the women’s movement came to life, an economic recovery has come and gone, and the percentage of women at work has fallen. The pattern is roughly similar among the well-educated and the less educated, among the married and never married, among mothers with teenage children and those with children under 6, and among white women and black.

Gone are the days when enterprising thieves would dig up an old grave and pillage for gold teeth and rings. Today, it’s mostly the bronze markers and flower vases that draw their attention. Rising scrap metal prices, coupled with the lagging economy, have triggered a string of cemetery thefts both locally and across the nation. Grave robbery was more common in the 19th century, when thieves dug up the dead in a search for gold. Through the decades, such nefarious acts became uncommon. But now, grave robbery is quietly sweeping the nation. Again. 

Grave robbers beware: The authorities are getting wise. States are passing laws and police are cracking down.  The scrap value of a bronze vase is about $10, according to cemetery operators; the replacement price often tops $300. In the last few weeks, robberies have been reported at cemeteries in Arizona, Maryland, Michigan and North Carolina.

The Last Piggy Bank You Should Open

Record numbers of Americans are raiding their retirement savings as the economy has soured, threatening their long-term financial security to make their mortgage payments, pay medical bills, and cope with rising food and fuel costs.

The three largest administrators of 401(k)s - Fidelity Investments, CitiStreet, and Vanguard Group Inc. - report a growing number of early withdrawals from the plans in the past year as saving for retirement has taken a backseat to mortgage payments, medical bills, and rising food and fuel costs.

Fund executives link the withdrawals to the slowing economy. “We’re hearing everything from ‘my gas bills are too high’ to ‘I’m going to a funeral and need to pay for a plane ticket,’ ” said Bob Gonzalez of Wachovia Corp.

Most financial planners strongly discourage clients from withdrawing funds from retirement plans because of the taxes and penalties involved. Still, most retirement savings plans allow workers to tap their money before age 59 1/2 either through a loan, a hardship withdrawal, or by rolling the funds into an individual retirement account if they leave their current employer. One drawback to taking a hardship withdrawal is that the money is counted as part of an employee’s gross income, increasing the amount subject to taxation and, in some instances, putting the employee in a higher tax bracket.

Some advisers say people should consider filing for bankruptcy protection rather than dipping into a 401(k), which is usually protected from creditors.

Savvy people have learned that they are used more intelligently when they are paid

Paid volunteerism. The phrase may sound oxymoronic, but an ever-growing number of retirees and nonprofit executives say it is an apt description of the way modern retirees view nonprofit work. And while no one has gathered statistics on the tendency, experts say there is a good chance that the automatic link between doing good and working for nothing has been permanently severed. “People used to say, ‘Here I am, what do you need done?’ ” said Deborah Russell, director of work-force issues for AARP. “Today’s retirees say, ‘Here’s what I do well, how can you use it, and what will you pay?’ ”

Economists, behavioral scientists and gerontologists point to multiple reasons behind the switch. For some retirees, economics ranks high on the list. People expect to live for many decades beyond retirement. Many started their families late, which means they may be financially responsible for children as well as aging parents. They may not want to continue full-time work at high-pressure jobs, and for many, unpaid volunteerism is simply not practical.

Even the wealthiest retirees insist on being paid for doing good. Savvy people have learned that they are used more intelligently when they are paid. Nonprofit executives say the reverse is also true: people who are paid work harder and seem more committed to their jobs.

Private-sector employers are learning to harness that kind of attitude to their own philanthropy. I.B.M., for one, just started a program to retrain some of its retirees to teach math and science in public schools.

So Much For Road Trips This Summer

Americans might want to save those tax rebate checks, because they’ll probably need the extra cash this summer. With the price of oil surging close to $134 per barrel, driving around town this summer could be expensive indeed. The price of oil has increased $40 barrel since the federal government approved the $130 billion in rebate checks along with other economic stimulus measures in February. The U.S. uses about 20.5 million barrels a day of oil, so the total bill for oil’s price increase could add up to $300 billion over the next year. To add to the trouble, gas prices often go up during the summer driving season when demand is higher.

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.