Author: Erika Miller, Correspondent

Official government data says consumer inflation has fallen .2% in the past year. I don't know about you, but it doesn't seem to me like prices are falling.

It came as a total surprise to me that grocery prices have fallen nearly 3 percent in the past year, one of the biggest category declines. I would have guessed prices at the supermarket were up.

But it turns out, prices for nearly every aisle have been coming down, including beef, milk, eggs and fruit. If you're curious about the exceptions, they're breakfast cereals, sugar and carbonated drinks.

Which brings us back to my question, why haven't shoppers noticed such widespread price declines?

I don't know about you, but today's employment data makes me thankful to have a job. Now 1 person in 10 is out of work. In my anecdotal experience, things feel even worse. I see an increasing number of fathers doing drop off at kids' schools, something I didn't see a year ago. And there doesn't seem to be any change in the number of requests I'm getting for job contacts -- and not just for leads in my field.

One interesting fact I came across: If the 15.7 million unemployed lived in one state, that state would be the country's fifth largest. Wow!

But, even more distressing than today's jobs report is the outlook for employment. After the Q3 GDP report came out, hopes were high that the Great Recession was over, and recovery was finally underway.

I must confess that I have never purchased anything from a home shopping network. But, I can see how addictive channels like HSN can be. The merchandise seems to be priced fairly, the on-air talent is very persuasive, and the countdown creates the perception of the need to act immediately--or lose out.

I selected HSN for the debut of ShopTalk because the network is known for having its finger on the pulse of consumers. Its business strategy depends on selling what people want to buy now. If bracelets are hot, extra time is devoted to that item. HSN has unique insight into what customers are watching, buying, and returning.

That's not the only competitive advantage. Because television shopping networks don't have dedicated floor space to fill, they can adjust their inventory easily and quickly. They buy their merchandise in relatively small increments to ensure they are not stuck with a lot of undesirable items. And Marshal Cohen at The NPD Group also says home shopping has the added allure of "stealth shopping." In other words, in the current economic environment, many people are uncomfortable telling family and friends they are heading to the mall. It's much easier for them to buy things on the sly, in the comfort of their home.

It seems hard to believe that here we are a year after Lehman's bankruptcy, and not much has been done to prevent another financial system meltdown.

At first, I was worried Washington would over legislate as a knee-jerk reaction to the financial crisis. As you may recall, last March, the House overwhelmingly approved a 90% tax on bonuses paid to firms that accepted large amounts of federal bailout funding. That bill didn't become law, but public fervor for reform was overwhelming.

Now, I worry about complacency. Nearly everyone agrees that reforms are needed to address the roots of the financial crisis. It's reasonable that some changes, like how to oversee systemic risk, deserve serious debate. But others, like the creation resolution authority to unwind troubled firms, seem to enjoy widespread support. So I can't understand the delay in that agency's creation.

The sharp rally in gold prices recently has me thinking about the role of "alternative investments" in an investment portfolio. "Alternative investments" are a wide group, including gold, commodities, and REITs (Real Estate Investment Trusts). They're basically any asset class that typically moves in the opposite direction of stock prices.

I think many investors equate "alternative investments" with "speculative investments." But there's a strong case to be made that "alternative investments" can often offer asset diversification, as well as capital preservation during inflationary times. They can often act as a cushion during brutal stock market sell-offs.

It's clear that inflation is not much of a threat these days. But what about deflation, a sustained period of falling prices and wages? After all, today's producer price index showed prices are falling in most sectors. And incomes certainly haven't been rising much lately, as most workers know.

The two economists I interviewed today, Jonathan Basile at Credit Suisse and Steven Wieting at Citi, don't see an immediate deflation threat.

But according to the AP, Pierre Ellis, senior economist at Decision Economics told his clients: "Deflation-worriers will find some cause for concern in the general picture, though the broad pattern remains one of gently oscillating monthly price changes."

I enjoyed interviewing Don and Craig Hodges for tonight's "Of Mutual Interest" report because they are a welcome change from the high strung Wall Street crowd. Maybe it has something to do with the fact the duo are from Dallas, where the culture is less intense. Don and Craig came in relaxed, talking about Broadway shows and good steaks. Not a trace of anxiety about the interview. No obvious Blackberry addictions, either.

I like the fact that the Hodges Fund is fairly concentrated. To me, that shows conviction. I also like the willingness of the Hodges to take risks on contrarian sectors.

However, as Morningstar points out, these characteristics can also mean volatility. Last year the fund lost nearly 50%, and saw heavy redemptions. But this year, the fund is up an impressive 19.52%--soundly beating the S&P 500. The fund has also done well over the long-term, beating the S&P 500 "in every rolling annual 10 year period since 1994," according to Morningstar.

In addition to volatility, another potential drawback investors should consider is the fund's expense ratio, which is higher than its peers.

It's hard for me to believe that oil prices have shot up so quickly on optimism about the economy. I don't see what's changed over the past few weeks to make speculators so much more confident a recovery is underway. I concede the economy has probably bottomed. But that doesn't necessarily mean things are rapidly improving. There's still weakness in the housing market, in the real estate market, and a credit crunch, all of which will constrain growth for quite a while. I think fiscal and monetary stimulus efforts will pay off, but not soon.

In my piece Tuesday night, economist Dean Maki argued the price per gallon of gasoline doesn't really matter to consumers. It's the rate of the increases that counts.

Here's a statistic that may shock you: The average US household owes 128% of disposable income. What may be more surprising is that's actually an improvement from the peak of 133% at the end of last year. To give you perspective, as recently as the mid-80's, the load was about half that amount. It's no wonder economists think it will be at least 6 years before consumers have a good handle on their debt.

Now, the good news. There has been significant progress on savings. The savings rate--which was actually negative for part of last year--is now up to almost 7%. That's not far from what economists say is the long-term average of about 9%.

If there's one thing I like, it's a media circus. It brings out the competitive spirit in me. I thrive on trying to get the exclusive interview, the best seat in the courthouse, and the best video.

I arrived at the courthouse where Bernard Madoff would be sentenced a little after 7 a.m. yesterday. I was pleased to see our cameraman James Roldan and intern Jeff Masino. Both had arrived there at the crack of dawn to stake out a prime shooting spot. Our field producer Althea Thompson and intern KyuYeon Ha were already in line, waiting to get into the courthouse. We waited in various lines for 2.5 hours before being permitted to enter the courtroom.

A big challenge of covering federal court proceedings is that no recording devices are allowed in the courtroom. That means I can tell you the words that were said, but not the body language or tone that convey real meaning.