This post is a guest contribution by Rebecca Wilder*, author of the of the News N Economics blog.

Today I plan to rant just a bit about consumption because I was reading Yves Smith’s article today, and she referred to “debt-fueled consumption” - the now pejorative phrase that just rolls off the tongue. She says:

“no where does the article [referenced WSJ article in her post on the consumption share] acknowledge that the consumption level was unsustainable and debt fueled.”

And this is where I get just slightly irked, because it seems to me that the phrase “debt-fueled consumption” strikes the following chord: every American household was loading up on home equity debt just to buy big ticket items like Hummers and large sofa sets with cup-holders galore from Jordan’s Furniture (a discount furniture shop in the

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For Immediate Release

Chicago, IL - June 16, 2009 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Community Health Systems Inc. (CYH), Universal Health Services Inc. (UHS), Merck & Co., Inc. (MRK), Schering-Plough (SGP) and Johnson & Johnson (JNJ).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday's Analyst Blog:

Cuts in Healthcare Spending

The actual breakdown of the $313 billion proposed cuts includes: $110 billion in productivity adjustments to Medicare payment updates; $106 billion in reduced hospital subsidies for treating the uninsured as coverage increases; $75 billion from Medicare

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On Saturday June 13, 2009, President Obama announced new Medicare and Medicaid spending cuts aimed at reducing government spending by an additional $313 billion over 10 years to pay for healthcare reform. The amount will be in addition to the $635 billion "downpayment" included in his FY 2010 Budget.The actual breakdown of the $313 billion proposed cuts includes: $110 billion in productivity adjustments to Medicare payment updates; $106 billion in reduced hospital subsidies for treating the uninsured as coverage increases; $75 billion from Medicare Part D drugs; and, $22 billion from "Other."The President added that these measures would extend the solvency of Medicare's Hospital Insurance Trust Fund by seven years to about 2024, and reduce beneficiary premiums for physician and outpatient services by about $43 billion over the next 10 years. As Congress continues to draft legislation, it remains to be seen whether the government ...

Equity income is a good choice for conservative investors who need to rely upon their portfolio to provide income to support their lifestyle.

Equity income investing tends to involve a trade-off between capital gains potential and current cash flow to the investor.  In a depressed market such as the one we are in now, equity income in “safe” companies offers more potential for capital gains than usual, making dividend investing all the more attractive to the conservative investor.

What About Bonds?

Bonds are good for income too, but the income does not increase (with the possible exception of inflation protected bonds and perhaps some variable rate bonds).  Bonds have a definite capital preservation and volatility reduction role in portfolios — and a tax reduction role in the case of municipal bonds.  Dividends from successful companies, however, tend to increase over time, helping the portfolio maintain the purchasing power of its cash income stream.

Contribution

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