With the GDP growing by 3.5 percent in the third quarter, economists and market watchers are expressing a small sigh of relief. However, no one can deny that a lot of taxpayer money has been invested into the economy through tax hikes and this contributed significantly to the growth. The question is, how much can be attributed to the bailout and how much to the real economy? To find the answer to this question, it is essential to know what recovery really is.

Basically, there are three developments that are required to get the economy back on tract. The first development required is bank stabilization. Recklessness in the financial institution was a major cause of the recession. The turmoil in this industry started in August 2007 and reached its peak at the early autumn of 2008. The crisis has passed and the stabilization of the financial industry laid the foundation that allows the economy to heal. The second development is GDP growth. From the first paragraph, it is apparent that this has been met as well.

The third development that needs to happen is the job growth. Unlike the first two factors, it is slower to develop but it affects people’s lives more intimately than the first two. Even during the shallow recession in 2001, it took almost 2 years before job growth became positive once again. Another problem in determining what the real “job growth” really means is unreliable data. For example, the government released new figures that said the stimulus package “created or saved” more than a million jobs.

These data was collected from agencies that received funds under the American Recovery and Reinvestment Act of 2009. Unfortunately, the figure is not reliable because of reporting basis. Recipients feel encouraged to inflate the number of “jobs” they created in the race for federal money. It would be misleading to take the numbers at face value. The unemployment rate stands at 9.8 percent, few are comforted that a million jobs were said to be “retained”.

The bankruptcy of CIT, the biggest SME lender, is adding anxiety to retailer worries ahead of the Christmas season. CIT filed for Chapter 11 bankruptcy protection in New York on Sunday after months of trying to stay afloat. The company is most well-known for providing much-needed credit to small and medium-scale businesses. It helps retailers stock up their shelves, expand business operations, and stimulate growth. Through the years, it has become an important player in enabling capital to flow in the retain sector.

While the bankruptcy spells bad news for most, CIT announced that its lending activities will continue even as it proceeds with the bankruptcy. It hopes to shed around $10 billion in debt and implement the prepackaged reorganization plan. Chairman and CEO Jeffry Peek said that the reorganization “will allow CIT to continue to provide funding to our small business and middle market customers, two sectors that remain vitally important to the US economy.”

No matter CIT’s good intentions though, analysts and retailers said that the case will most likely contribute to instability within the retail industry. CIT works with 2,000 vendors that provide merchandize to 300,000 stores. And a majority of players in the apparel industry rely on CIT for credit. Stores have already begun stocking up on holiday merchandize. However, they will require a reliable source of funding to restock their inventory, avoid shipping disruptions, and ensure continues supply.

Even a day without financing could create a bottleneck because shipments can be left in vendor’s warehouses or in the dock. CIT entered bankruptcy in a critical season but it dodged the worst of it for now because most merchandize for the holidays are already in distribution centers. More serious problems may emerge in the 2010 spring season as retailers gear up for a rebound in customer spending.

You can feel it in the air. Everyone is turning frugal. After decades of engaging in shameless consumerist attitude, people are suddenly becoming wiser with their money. The catastrophe that forced them into the situation might not be welcome, but the shift in consumer attitude will do a lot of good to society as a whole for the long-term.

There are still bills to pay and debts to get rid of though. In the meantime, it is important to save as much money as you can. It is inevitable that you still need to spend on certain things. Here, we compiled some blog posts that can help you spend less on your needs and wants:

April @ Get Rich Slowly uploaded an article titled “The Art of Improvising: Alternatives to Buying New”. Despite what the headline implies, this posts digs deeper into saving. Other than telling you to stop buying new stuff, the author also provided practical tips on how and where you can save. For example, she tells you to repair whenever possible, delaying spending, trading, or renting. Borrowing is also a good idea in some instances.

DeputyHeadmistress @ Frugal Hacks wrote an interesting post “When It Pays to Buy New”. Now, she is not specifically encouraging you spend money on new things; the point of the article is that it sometimes pays to buy something new. This is especially true if the product you’re interested in meets two factors: it frequently needs to be replaced and the company you’re buying from offers money-back replacement guarantee. If it doesn’t meet the latter condition, you should think twice.

The third blog we will feature for this week focuses on buying cheap books. Fiscal Geek has a post titled “24 Ways to Help You Buy Cheap Used Books”. It provides various links to websites that sells books at bargain prices. Even non-booklovers will find the post useful because it gives them an idea about how much, or how little, they should pay when buying stuff.

First time home buyers is inevitably anxious right now, especially if they’re not sure they will be able to find their dream home next month. On November 30, the credit is to be finished although the Obama administration is looking into extending it past the due date in order to make it available to more home buyers.

The situation about the $8,000 first-time home buyer credit is very fluid right now. According to Housing Secretary Shaun Donovan and Treasury Secretary Tim Geithner, the government may extend it for a “limited period”. However, several proposals are being considered. There are very generous and least generous proposals that are being looked into.

Jaret Seiberg from the Concept Capital’s Research Group said that, “there is bipartisan compromise to extend the credit through spring and expand it to existing homeowners who are stepping up to a different home”. Because of this, policymakers are considering giving up to $6,500 in credit for homeowners who want to trade up their homes, as long as they live in their current residence for at least five years.

Not everyone can take advantage of the first-time home buyer credit though. This is because in order to get the full amount, the applicant should have less than $125,000 in adjusted gross income ($225,000 for married couples). Aside from this, the provision is only applicable for homes that are sold for $800,000 or less. The contract should be signed by April 30, 2010 and must be closed by June 30 of the same year to qualify for the home buyer credit.

The home buyer credit has attracted supporters and critics alike. Supporters say that it has helped boost home sales at a time when it is needed most. Extending it will further improve sales and help stabilize prices. However, critics say that while it has helped in some ways, it is ill-targeted and therefore not cost-effective. They say that only 10 to 20 percent of 2 million qualified home buyers bought homes with the credit in mind.  In other words, 80 to 90 percent would have bought anyway even without the credit.