Expect This Trend To Grow?
Readers suggested a topic around the deteriorating economic situation. “I’ve just heard that a So Cal fire dept was/is in contract negotiations. No raise. They’re being asked to take a 9% reduction in pay. Expect this trend to grow.”
Another said, “My sweetheart works in education for a Sacramento area school district. She just told me last week that the State of CA budget cuts means no raises at all this year. Batten down the hatches. The reality is that just having a recession resistant job is going to be comfort enough.”
A reply, “It give some comfort; however, while these jobs are more recession-resistant than others, they are not recession-proof. This is one aspect I and others were trying to get across to the ‘anti-union’ types. NOBODY will come out unscathed, IMO.”
“I think, once people realize the magnitude of what we’re dealing with, we are going to see a consumer pull-back the likes of which we haven’t seen in a great, great while.”
Another added, “My husband is a principal for the alternative school in an inner city school district and both times in the last two recessions, they cut the weeks he worked and we took not only a cut in wages, but a wage freeze for 3 years. We were just grateful he had a job and tightened our belts to accommodate the reduced wages.”
One on costs, “Whatever happened to wages keeping up with inflation and loan resets? This will be the perfect storm for J6P.”
One looks for safety, “A topic that interests me is what are the industries/jobs/fields that are OK in a recession/depression. Entertainment (books, internet, movies, etc). If one were to start a business that would survive and even possibly flourish, what do previous recessions tell us they would most likely be?”
One added, “How about a discussion on recession proof businesses, if in fact such a beast exists….. What products pricing will unwind? Aside from houses that is.”
A reply, “I would assume a general statement such as the more difficult the profession is to learn, the more recession proof it is. IE. Doctor, Farmer, Unix admin may generally hold up better than Realtor (1 week class?), Retail clerk, Widget production line.”
“Granted many skilled people will lose jobs, but I would rather be in the technical or medical profession at the grunt level rather than a manager of a retail chain store.”
The New York Times. “The nation’s employers eliminated 17,000 jobs in January, the government reported Friday, the first decline in the work force in more than four years.”
“The broad weakness in the job market, which affected many sectors, shows how the collapse of the housing bubble is rippling through the rest of the economy and suggests the likelihood of more pain for millions of American families in the months ahead from job losses, lower real wages and fewer working hours.”
The Bradenton Herald. “Renowned Florida economist Henry Fishkind brought his trademark brand of stand-up forecasting to Lakewood Ranch on Friday. Opening with a projected slide of an alligator in his backyard, Fishkind said the errant and dangerous reptile was representative of the economy of late.”
“‘Certainly, the economy has turned down,’ Fishkind said. ‘The rest of 2008 is going to be a very slow year - 1 to 2 percent growth at best.’”
“‘What we are going to see this year is the collapse of the condo market, both in Manatee and Sarasota counties,’ Fishkind said.”
“We will we see a recession? That depends on the status of job growth, Fishkind said, adding that the nation needs to see about 100,000 jobs added each month to avoid a recession.”
“The local area, as a whole, lost about 2,300 jobs during 2007, most of those the result of the housing slump, Fishkind said.”
The Medill Reports. “While economists debate definitions and indicators, W Hotel doorman Matt Geiger in Chicago’s Loop is among those who say there’s no question the country is in a recession. ‘Nobody wants to use the R word,’ Geiger said. ‘But we’re in it.’”
“Some in the service industry say they have noticed. ‘People are tipping less,’ said Nick Axiotis, manager of Marquette Inn Restaurant at 60 W. Adams. He also said business has slowed significantly since the holidays.”
The Arizona Republic. “More economists now believe Arizona is already in a recession - or will be by the end of the year - because growth in consumer spending is anemic and fewer jobs are being created.”
“A survey of Arizona’s top economic forecasters found that 35 percent believe a recession has begun in the state, and three-fourths believe a recession will be at hand by the end of the year.”
“‘This is no disaster, but I think it will be the weakest economy we have had since 1980 to 1982,’ Scottsdale economist Elliot Pollack said.”
“Pollack, who as late as last fall had said that a recession was unlikely, said he changed his mind after seeing the latest retail and job-growth numbers. He now believes a recession is likely in the state this year and maybe into next year.”
“The latest Arizona Business Conditions index, released Friday, rose a bit from a reading of 47.7 in December to 49.6 in January but is still way below the 64.3 of July. But anything less than 50 indicates a lack of growth in the near term and indicates a recession is likely in four to six months, said Dawn McLaren, research economist at ASU’s W.P. Carey School of Business.”
“The last time the index was below 50 was in September 2002, when the state was coming out of a recession. The index has correctly forecast recessions since it was started 45 years ago.”
“Sources of consumer money have been shrinking: first home-equity loans, then credit, the stock market and now maybe the possibility of getting a new or better-paying job.”
“Pollack said, ‘They (consumers) have to pay down debt and increase their savings, and they can’t do that out of their houses or the stock market anymore. They have to do it with real earnings.’”
“‘The employment data is my single largest concern in the economy, both in Arizona and national,’ said economist said Steve Taddie. ‘It has been a year and a half since people have been able to really use their home equity. Without that, the spending growth has to come from employment.’”
The Union Tribune. “With unemployment hovering near 5 percent and home foreclosures surging, the local economy has probably dipped into ‘the San Diego equivalent of a recession,’ according to an economic index released yesterday.”
“After two years of slowing, job growth has dropped beneath the rate of population growth and unemployment has hit a four-year high, leading USD economist Alan Gin to conclude that the economy may be in a San Diego-style recession.”
“Gin expects local companies will hire only 5,000 to 8,000 people this year, compared with 10,700 last year and 17,800 the year before. ‘That’s not enough jobs, given our natural population growth and aging,’ Gin said. ‘And then there’s also slower economic activity, including slower home sales.’”
“But the local economy still does not match the technical definition of a full-blown recession because there has been not been a year-to-year decline in employment or the gross regional product. Gin predicts that conditions will not get that bad because of the county’s diversified economy, strong tech sector, tourism industry and military bases.”
“‘In terms of an actual recession, I don’t think that can happen,’ he said.”
“‘I hope he’s right,’ said James Hamilton, economist at the University of California San Diego. ‘But in a some ways, I think we’re more vulnerable to a downturn than a lot of other regions. We had a much bigger run-up in home prices and are having a bigger fall. There’s a potential for much bigger price declines, which could have a big effect on consumer confidence and spending.’”
What businesses did well during previous recessions/depressions? I vote for entertainment (books, movies, etc.) - comments?
Lost:
Nobody reads anymore, and it’d be nice to see books make a comeback…
Entertainment (movies) is going to have major funding issues…
They seemingly can’t make a film for less than $100 Million, and that dog isn’t going to hunt, anymore.
Hollywood had its golden era during the Depression, but back then buying a couple of movie tickets didn’t require a significant percentage of one’s weekly take home pay.
Hollywood also made movies back then that were worth watching.
so true
Book rentals, movie rentals, etc. Nobody buys during recessions.
Second-hand stuff will move.
ebooks? They’re cheap.
Why would you buy one of those e-reader thingameebobs?
$400? Screw that. That’ll buy me plenty of books! And they don’t even have anything interesting!
Books are cheap. Second-hard dirt cheap. It’s gonna be a while before this new fangled stuff catches up.
You can read ebooks on your computer, most formats, anyway. You don’t need a $400 Kindle from Amazon. You download them instantly. They don’t appeal to me, but they are pretty cheap comparatively.
Ive been reading them on my treo for years. I have them for word, xt,palm, lit, pdf and html. It takes some getting used to, but i dont notice reading on the littel screen after a while. If you include training manuals, techinical books, and a lot of stuff that even i dont remeber what it is, i have upwards of 75-100 gigs of the things.
Library books; even cheaper.
Used books have new information in them, as long as you pass them onto somebody else that hasn’t read them…
Yea , look for older coins being spent. My son works at Ace Hardware in Irvine and lately he has been showing me quarters as old as the 1945 and 1950 era.
Each Quarter pre-1965, has about $3 worth of Silver, in content.
Bad - things to do with cars, driving, high-ticket discretionary consumer items.
Good - things to do with walking, “mingling,” simple pleasures.
I’m thinking something like a neighborhood bar in a smallish Rocky Mountain town/city might do OK.
And of course, as a risk-taking friend of mine with questionable morals used to tell me, there’s good money in strong-armed robbery.
“…strong-armed robbery.”
The preferred m.o. of late is for groups of two to five youths to rob people on the street - night or day. A few weeks ago a group of youths held up one of our aldermen early on a Saturday afternoon.
“The preferred m.o. of late is for groups of two to five youths to rob people on the street - night or day. A few weeks ago a group of youths held up one of our aldermen early on a Saturday afternoon”
That has been the MO in SCentral /Compton for decades. Gangs of youth, or even just a pair, will ‘jack’ a pedestrian , either from their car or on the streets. They will cruise around, see a lone pedestrian walking down a street ,jump out of the car and do a quick jacking, getting that person down to the ground, beating him/her with punchs, and demanding their wallets or purse, or just pry it from the victim. Several years ago two basketball players for a local college were doing this as supplemental income/ extracurricular activity.
Honor students all, I’m sure.
I’m thinking something like a neighborhood bar in a smallish Rocky Mountain town/city might do OK.
Hahahah - great business if you inherit it and don’t have a monthly lease pmt to make.
strong-armed robbery?
The PC term is undocumented withdrawal.
What industry will be hit hardest? I vote for tourism.
Yes and no. I agree that tourist destinations that see large amounts of US visitors will get hammered. But you have to keep in mind that business has never been better for New York hotels. The strong Euro has allowed them to keep rates sky high.
Visiting consultants at work often can’t find a room in The City for under $400 per night.
An out-of-state homeowner recently found his vacation home stripped of copper plumbing, the air conditioner outside removed, potted plants and lawn ornaments missing, outside lighting fixtures gone, and the screens on windows and doors removed.
eBay’s stock has been hammered of late, but I’m considering buying in at this point. When jobs vanish, people will start unloading all the toys they bought with their refi’s.
Have you considered that prices for virtually everything on eBay, are all about comps, just like real estate?
We are looking to buy a Bellanca SV airplane in a year or 2, no hurry.
6 months ago there were 8 planes for sale in trade-a-plane, today there are 20 of them.
150% more to choose from, and prices are already dropping quite a bit, and nobody’s buying them.
I didn’t know that many people got into flying. I’ve been a pilot for years and it never seemed like and more people were into flying now as there were 15 years ago. Maybe a few more kit manufaturers than before. I guess it’s such a small minority of the population that it’s hard to tell. Maybe by comparing an Oshkosk meeting from 1992 with one today you could see the ‘bubble’ mentality. I don’t know. Certainly nothing like the motorcycle mania. Thank God.
Auto repair & auto parts both new and salvage parts. Big underground economy here in LA in pilferage and recirculation of used salvage parts. Best place locally to get used salvage parts is Compton/gardena/wilmington/LA port area- tons of auto junk parts & salvage yards. There will be a resurgence of folks with no more credit buying parts and attempting their own repairs, usually resulting in disaster.
This is good news, because Sanford and Son was a great comedy and perhaps we’ll see more re-runs of it now, just as we endured “Flip This House” and its copycats during the upcycle.
The common name is “Midnight Auto Parts”.
With any luck, we’ll be seeing more real porn, and less so-called “house porn.”
Package liquor store?
“Granted many skilled people will lose jobs, but I would rather be in the technical or medical profession at the grunt level rather than a manager of a retail chain store.”
We accepted the wal-marts, targets, and other big box stores the past few decades, that replaced mom & pop’s, because they offered a better variety, with cheaper prices.
As these behemoths get closed down by the corp’s, and the employees are told they no longer have a job, (not that it was much of a job in the 1st place) it’s a double whammy, because for the vast majority of Americans, they will no longer have a place to shop.
And the mom & pop stores have been gone for so long now, and they aren’t coming back anytime soon.
And who in their right mind, would think of opening a new retail store, in the upcoming dismal business climate?
How about internet businesses, would they perhaps become more popular?
I think so.
Combination of not having to drive, and better selection of items.
Which brings up a point: UPS and Fedex and trucking will still do well. If nothing else, our food (that’s not wheat/soy/corn) still comes from California (and China and Brazil and Mexico).
It would take a major upheaval (along the lines of Kunstler-style peak oil) to re-establish local growers beyond the yuppie markets, even on a seasonal level.
Yes, the trend is good here due to lower overhead, less regulation, less gas used, and no sales taxes (that will end soon, and in fact should, in fairness to brick and mortar retailers).
Internet businesses that involve delivering any physical objects to a home will not do well — their shipping costs will continue to increase quite a bit, unless a way is developed to ship items of all sorts to a central point for pickup by the customer, rather than by delivering to the door. I am a bit surprised how many internet businesses will not use the US postal service even for extremely small & light objects that could be delivered that way.
“I am a bit surprised how many internet businesses will not use the US postal service…”
They have businesses to run. The USPS is completely unreliable - the customer service problems would kill you if you relied on the USPS to deliver anything on time and intact.
Ever Notice most USPO are NOT Big package or dolly friendly places? Most have steps into the main lobby or tiny doors…and they Look at you funny if you roll in a big dolly full of packages..And most have NO Free parking………UPS is customer friendly with FREE parking
I am a bit surprised how many internet businesses will not use the US postal service even for extremely small & light objects that could be delivered that way.
“I would assume a general statement such as the more difficult the profession is to learn, the more recession proof it is. IE. Doctor…”
I respectfully disagree with this. I took my furbaby to the vet last week and the young newb tried to sell me a bunch of unnecessary pet pampering junk. I asked my vet friend, “what’s up with that?” and she told me that’s normal for the new guys and that some vets get commissions for that! Combined with crushing debt? I think we’ll see desperate Dr’s and vets as well.
There was a story about 5 months ago about a pair of doctors out way the hell out from Chicago with some ungodly amount of student debt, and a condo (like duh!)
He was going to be a “sports physical therapist”. Ummm… good luck with that, and that debt. He’s gonna be one of these pushers, fer’ sure!
This will be the last year the Stuporbowl is played. Spectator sports will start to dry up, causing nationwide riots to occur.
I doubt that. There will be a Superbowl next year, and the next 10 years. I’m a doom and gloomer, but not that gloomy!
Ditto. There will be sports, but its a natural part of the cycle for the revenue to drop sharply. People will still pay amazing prices for superbowl tickets, but next year will certainly see lower prices.
This will be true across the board. Despite people having more time to go to sports, they won’t have the income. There also won’t be as much drive to outshine the Jones. Why the later? The joneses will suddenly run out of HELOC money.
Every week I find out about two or so more coworkers who are deep in debt.
Got popcorn?
Neil
Debt is absolutely crushing my coworkers.
I did buy a significant amount of the Vice Mutual Fund last week - ticker: VICEX.
Basically tobacco, alcohol and movies.
Who do you use as your broker? A coworker suggested VICEX to me, and neither of my broker(s) sold the fund.
PS: VICEX also invests in defense…
The owners of pro sports teams tend to be locked into multi-year expensive contracts with their athletes, and attendance is already slipping bad, imagine how dire it’ll get?
And what happens to the tv money?
Oh please!
Even after Weimar, life actually went on. It’s shocking how that works.
Yeah. There was that WW2 thing though; and the communist menace for another 50 years.
Crystal ball says the only thing that will escape this recession will be … cockroaches.
People on the verge of broke, might just have had it with smarmy pro athletes making $6 million, for hitting .262
Hey, lighten up on ‘em, steroids ain’t so cheap, ya know.
This will be the last year the Stuporbowl is played. Spectator sports will start to dry up, causing nationwide riots to occur
Sports on TV especiaily the major teams in the big 3 sports such as basketball, football and baseball will stay ok as that is the cheapest form of entertainment for the Joe 6p masses. Stadium revenue will go down but the major teams in the big cities such as lakers, SA spurs, Boston Redsox&pats, yankees, Gbpackers, dallas Mavericks will contnue to have devoted followings and will do OK even in the worse case scenario. Best cheapest form of opiate for the deluded masses is TV sports- it’s bread and circuses, couch potato, Boob tube entertainment keeping J6P in a demented stupor.
If they cloned the Lakers into two teams playing in different seasons( winter and summer), crime would drop 50% in LA.
I don’t care what happens to pro sports or any other kind for that matter beyond wanting municipalities to stop taxing the rest of us to give these aberrant types a place to play.
The city of Arlington, TX is now collecting parking and ticket taxes which are then funneled to Cowboys team owner Jerry Jones. Insane, but so typical of the corruption and collusion between the our local “betters” in government and business.
It’s how Bush made a name for himself here. He used his political connections to have valuable land declared blighted so his buddies could build a baseball stadium on it. In return for a few phone calls, he “earned” about $14 million. The landowners got screwed, the team had a good season and Bush was hyped as some kind of business genius.
Big time spectator sports will also suffer as the cost of personal transportation continues to skyrocket. Those sports are a form of tourism.
How about careers? The best way to combat recession in your own career is to become flexible - willing to live temporarily 2,000 or 3,000 miles away for a year or two in order to give yourself an income increase in the coming dark ages. You can give yourself a good tax break the first year - much better tax break than a silly mortgage interest deduction. I’ve been using this type of tax break most of the years between 2000 and now. I thumb my nose at fiscal socialists (Hillary, McCain, Edwards, and Obama).
Bill, you are pretty extreme calling McC a fiscal socialist. FYI, on AZ television he is most often seen trying to shout down some federal spending program.
Where do you go for your tax break? (Out of US? where?)
I stand by the letter I got from McCain’s office. He falls for the class warfare tripe that all other Democrats use.
I go at least 50 miles away from my primary residence for my tax break (up to one year). If I have a new client after that, my tax break goes another year, provided I do not return to my permanent residence. I get per diem every day I’m away from my AZ address. You don’t have to go out of the US or in harm’s way to get a good tax break. Read up on the good ol’ http://www.irs.gov web site and look for publications to find a good tax break to fit your situation. Most Americans miss out on saving thousands of bucks because they are unaware of perfectly legal tax breaks they can use. It’s very patriotic to keep as much money from big spending bureaucrats as possible.
I can’t speak for Bill, but I think I know what he’s doing. Basically, you form a couple of legal entities and work as a consultant. You run all of your income through the entities, shaving expenses off of your gross in multiple steps. By the time you get around to paying yourself, your AGI is a fraction of what it would have been if you were a W2 employee. Then you pay taxes, but in a lower bracket and on less income.
The only problem is that only high-skilled high-motivated people can pull this off. It starts paying off when your gross income exceeds about $100K, and rapidly gets better from there.
You don’t need to develop a seperate legal entity (LLC, S-Corp, C-Corp, etc) to run your consulting income through…. it’s all 1099 anyways.. & can just go on your personal Schedule C… although w/an LLC/Corp… you are less likely to be audited.
In CA, LLCs & Corps have an $800 minimum tax too that adds to the bill =(
Albertson’s has had 2-for-1 Cap’n Crunch for, like, the last month. The trend is my friend!
Vive le bust!!
“But the local economy still does not match the technical definition of a full-blown recession because there has been not been a year-to-year decline in employment or the gross regional product. Gin predicts that conditions will not get that bad because of the county’s diversified economy, strong tech sector, tourism industry and military bases.”
“‘In terms of an actual recession, I don’t think that can happen,’ he said.”
San Diego will be ground zero for the housing crash in California…
It’s woefully overbuilt with new houses & condos, and is the only city in the Golden State with such a military presence, which added to the false boom.
We will be leaving Afghanistan and Iraq with our tails between our legs in a year or 2, and the military will be obviously downsized.
People that are broke seldom go on vacation, ixnaying the tourism angle, as well.
Re CA’s housing crash: I have just sent an email complaint to the Lehrer Newshour, questioning why the eight “representative” Californians on last night’s housing-bust segment did not include a single delighted tenant. In case they don’t believe in delighted California tenants, I directed their attention to BJ’s HBB.
I want to by a cheap house in the land of Moab, after selling mine at the top of the market. Or a cheap piece of land.
Dont know where in Utah you are. But here in St George the realestate is not moving and prices are falling. Yet getting a job here in a stable field that pays more than 25k is very hard to find.
I don’t see the US military being downsized much at all. The southern border will need the national guard to block cross border raids & spillover from the coming breakdown of Mexico, much more so than just blocking illegal immigration. The navy will still be necessary to guard shipping lanes, unless & until the country can do without imports. Whether or not aladinsane believes in war, war is interested in him.
I agree. My son just graduated with a degree in hard science from a good school and couldn’t find a job. He enlisted in the military. The promise is, he can have his choice of available jobs. We’ll see - however, he is fed, housed, learning work skills, and accruing benefits for as long as he keeps his nose clean. I think it is an honorable option, and you can’t beat the job security. No sniping, please, about lifetime employment. Tx.
Education is a good field to be in during a recession. I teach at a community college in so cal and enrollments go up when people are out of work and times are tough.
That retraining is a positive and its why the US economy does so well in the long run. We had a mal-investment. We have far too many salespeople (Realtors ™ , mortgage brokers, heck… everything).
Most of those jobs will go the way of travel agents. Yes, I know they still exist and I know when its wise to still use one. But for most of my trips, I hit three or so online sites and have my ticket in less time than it took to use a travel agent. The same is true of the others.
Got popcorn?
Neil
I am hoping that more people will get trained in scientific or skilled (i.e. auto-mechanic, electrician, plumber) occupations during the severe recession that is headed our way.
There has been too much emphasis on the FIRE component of our economy for years, and obviously our lives can’t improve by solely shuffling papers between ourselves.
There is an estimated shortage of 100,000 auto mechanics right now — I’m talking those who can work on newer vehicles and have the certifications, not driveway joes.
This is the number quoted by the auto dealer associations. One guy told me getting certified is half a step away from being a computer administrator, and for the people smart enough to do that, why would they work in a cold [or hot], smelly and potentially dangerous work environment.
I’ve never met a dealer who said he wouldn’t hire a certified mechanic on the spot, so I could see people searching these kinds of careers out.
That is fantastic!
My nephew is going to school to be a mechanic!
In LA you are fighting with illegal uncertified guys but even they get payed well.
Yes, in my area there’s always ads seeking certified mechanics. And along a similar vein, my friend works at a place that is looking for two second shift machinists and hasn’t been able to find anyone qualified for the job.
re: illegal uncertified guys.
My ex has a shop that services Bimmers and Audis only. The last couple years he has lost business to illegal alien mechanics who undercut him on price. Invariably, ex’s customers always come back to him. Bimmer and Audi repair is too specialized for the south of the border johnny-come-latelies. Also there’s no substitute for the network of contacts that a legit mechanic builds over the years, aftermarket parts, etc.
I wouldn’t put my 2001 Ford into the hands of an uncertified mechanic let alone a late model 7 series.
My husband is a certified Toyota Mechanic and I am a teacher. We must be doing something right. Lot’s of years of heckling about not buying a house from the family. Orange County, Ca. Anyway, hubby has been so busy.
When I finished college in Amherst so many years ago, the local public school department offered courses to the locals using their vo-tech facilities. I took a course in basic auto repair for $25 — didn’t even own a vehicle at the time. Learned about changing tires, spark plugs, distributors, batteries, thermostats, etc. What I learned there has saved me $1000 ’s of dollars since & once saved my life when a throttle return spring broke on my accelerator linkage, resulting in a jammed-open throttle condition.
This type of education is possible in a great many communities all over the US, but generally isn’t available, I think, just due to a lack of appreciation of its value.
Similar opportunities exist in home construction & repair.
As we edge closer to a “Mad Max” world, more basic kinds of training might be useful, such as converting pickup trucks to run on gasified wood, or construction of home masonry furnaces to heat homes efficiently with wood, one way that McMansions might be usefully converted to multifamily dwellings.
Much “higher” education doesn’t give that kind of value for money spent, however.
My neighbor is a mechanic for a local Honda dealership. Six months ago, he was working 45 hour weeks and making about $70K/yr salary over the last couple of years. Right now, work is so slow, he spends much of his time napping at work. Mechanics get paid on commission (each job is rated at an hourly rate by standardized manuals), so if there is no work, he doesn’t get paid. His family is tightening their belts to stay above water.
I dunno about that. I’ve heard that there will be no raises, other than a very modest cost-of-living adjustment (which is less than the increase in cost of living), at GMU this year. In the earlier part of this decade, there were no raises at all for several years. I believe the UC system was hit even harder.
Yes, a friend works at a state univeristy in Illinois that is reknown for its affordability and enrollment started taking it’s worst dip in the last two decades in 2006.
I read not long ago that only an additional 1% of new jobs created in the U.S. will require a degree (jobs that previously did not require degrees). The full court press to keep wages in check may just result in fewer jobs requiring a degree - probably in favor of limited and targeted occupational “certificates”.
Exactly, who can afford tuition when they can barely keep their ship afloat?
I’m in the agricultural parts business, and we’re doing quite well. We have to go back to 2003 to find a better month than we had in January. We typically do well in bad times since equipment is replaced in good times and repaired in bad. Hopefully we’re not being held aloft by the ethanol bubble. Hard to tell.
Almost certainly the ethanol bubble is contributing to agriculture, which is still very dependent on imported petroleum for its continuance.
Dental merchandise and equipment seems to be doing well. A friend of mine set a new industry record for sales by a single retail rep last year…9.2 million. I’m a manufacturer rep, so my numbers aren’t anywhere near that but last year my territory was up 20% and this year I KILLED my ‘07 Jan.
A good salesman is recession proof.
Credit-card upheaval will be part of the trend. One sign: Deadbeats are being shown the door:
http://news.bbc.co.uk/1/hi/business/7222336.stm
Oh please! They need the “deadbeats” more than the deadbeats need them.
Why are these people all up in arms? Just go over to the next bank.
This is like the old joke:
If she doesn’t put out, her sister probably will. If not, there’s the best friend too!
Of course, there’s also the option of, oh the shocker, cash! Fail to see why people are outraged.
Whatevaaaaaaaaaaaa!
I think this has more to do with banks closing unprofitable accounts — i.e. people who pay their balance each month. This just happened to me. I had a cash back card from 5/3rd and regularly charge 2-3k per month on the card, and pay the full balance every time. I’ve never been late paying it. I have been doing this for about 3 years. Last week, I got a notice that my card had been “sold” to another bank who doesn’t offer cash back.
So shut the account, and mosey on over to another bank. They need you more than you need them.
Why does everyone get into a kerfuffle over these things like my dad? He seems to positively get offended about my breezy attitude towards these things.
Oh! the outrage, the outrage. I am a “loyal customer”, I am the “King of Prussia”; I am the Walrus.
Whatevaaaaaaaaaaaa!
My banks have all been cutting the interest they pay me, and my deposits with the worst of them are often gone the very next day. Just a business decision, on each of our parts.
Read the comments on this article…majority of comments are not from J6Ps complaining they have been cut off for carrying too much debt, it is the opposite, they are from people who either don’t use the card that often or pay it off each month.
Beleive me, corporations are addicted to debt and the last thing to go will be credit cards.
I’m supprized that this blog does not deal more with jobs,( to the extent that it deals with the economy beyond housing in other areas). Are you guys all independently wealthy?
Can anyone recommend a job blog which deals with employment as thoroughly as Ben’s excellent housing blog looks at real estate? I specifically do NOT mean some headhunter’s find-a-job blog, but a site that gives details and stories about what is actually happening in different professions. An “on the ground” presentation of whats really going on, job-wise. I don’t want a job, I want to know whats currently happening with jobs.
Barbarus,
I am looking for a new job right now and applied for an EE position which is hiring exclusively through the local Apple One branch. In two lengthy meetings with the executive hiring rep (head hunter), she shared information about the local job market. The area I live in has a population of about 200,000 and is heavily dependent on housing and retail for employment. Walk-in traffic over the last year averaged less than 300 employment seekers per month. In the month of January, they had nearly 500 people walk into the office seeking jobs.
Many of the people seeking professional placement services are unemployed mortgage brokers or reators who haven’t made any sales lately. She said that typically, these people have very limited skills and demand a minimum salary of $80K/yr. The branch has been able to place a couple of them in administrative assistant positions paying around $12/hour.
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I think that it is very important to distinguish between three types of recessions:
1. Garden variety (1991, 2001)
2. Deep (1970-1982 period recessions)
3. Severe (worse than what we have seen since 1951)
What kind of businesses would do well depends on what kind of recession we are now in. I agree that there are some businesses that would do relatively well under all the three. Also, equally important is deflation/inflation scenario during the recession. In general, inflation rate peaks few months into a recession. We shall see what happens this time around.
Jas
If things really get bad, I suspect goons hired to protect the property and persons of the really wealthy will be in high demand and well-paid.
The worse the recession, the more things in the U.S. will start approximating 3rd-world countries. Either that, or U.S. in the 1930’s, complete with Hoovervilles
By the way, they’re no longer called ‘high-paid goons’ — that’s ‘Blackwater Security Guards’ to you!
“‘In terms of an actual recession, I don’t think that can happen,’ he said.”
Somebody here is archiving this comment for future use, right?
In LA the WGA strike has thousands out of work - if this keeps up there will be pain this summer once unemployment runs out. Also, I was walking in my hood today - there’s always a lot of for rent signs - but I saw a new one today - “large garage studio for rent.” Haha! I almost called the FB’s number just for fun to see what they were asking but decided not to waste my time.
There are going to be a bunch of small studios available for a while. The business has spread out to hundreds of small contractors doing pieces of work for the production community. This was a result of better technology, union wage pressure, and the roll-up of the studios and post facilities during the 1990s.
But the big post facilities are doing layoffs now that the pilot season is toast and next fall’s TV season is in question. As you would expect, the facilities that were doing episodics are hurting the worst, since they are formally script-based.
The impact on the local economy depends to some extent on whether or not the government extends unemployment benefits. But the pain has already begun for the folks who were working as independents or for small businesses, rather than W2 staff.
Is CA one of the states with over 6% unemployment - one of those that will get 26 weeks of extended unemployment benefits under the Senate’s plan?
A friend in California told me he moved into his RV (parked in driveway) and rented out his house.
How come they get to collect unemployment, if they’re the ones who voluntarily walked off the job?
It’s not the WGA members, it’s all of the other people who are being laid off because production has shut down. It takes a lot of people to make and finish an episodic TV show. For each episode of each show that doesn’t get made, figure about $1 million or more that doesn’t get spent on people and stuff, mostly people.
How about opening a bunch of carbon storage units. People could bring their carbon and store it for a reasonable fee. This would help people feel better about themselves by allowing them to participate in saving the environment. An economic slow down will hurt business somewhat but would help the environment if we could get that nasty CO2 out of the air. Don’t get me started on second hand carbon emissions from people beathing in my face.
frozen carbon asssets…..call it “dry ice”
or Han Solo’s family jewels?
Aren’t those called cemeteries?
i predict a boom in online gaming.
boom or bust… i will PWN!! you with my mad ski11z…NEWB!!!!!!!
I noticed Build-A-Bear chain stores have increased their advertisements lately. Every week since mid December 2007, I have been received either advertisements and/or coupon offers to get in the store at least twice a week, one in the mail and several by email. One of the offer is just to go in to the store during Feb 1 -4 and get free stuff for up to $5. One would not see these things during the housing bubble years. I know a couple young girls have more than 20 of those stuff animals during those years - bought by their parents. Now, these parents came out with decree that they will not take them to the Build-A-Bear stores anymore. When there is no money, this toys is one of the first to go!!
PS: I have two given to me as gift and that was how I learn about the store in the first place.
In the 90’s recession here in SF Valley in SoCal, the pawn shops flourished, they were plentiful. They had some big toys in there too, Harley Davidsons, boats, Rolexes, etc. There was on pawn shop on desoto and sherman way that took people’s cars. There were lifted trucks, vettes, bimmers and some junkers in the fenced in lot in back. there was a ferrari or some italian sports car inside. I expect this time shops will have big screen tvs, a gaggle of inessential electronic goods and musical instruments. I figure somebody who knows what they are doing in the pawn business will do well for the rest of this decade and into the next one.
Pawn shops only work if you can turn the merchandise, on a regular basis.
There will be lots of commonplace items that will have little or no resale value, in the not so distant future.
There will be lots of commonplace items that will have little or no resale value, in the not so distant future.
Let’s leave David Lereah out of this.
Great point. Years ago there was not nearly the proliferation of consumer goods that there is today.
Take flatscreen TVs for example. No lasting value. As many of them as pawn shops might accumulate in this bust - the Asians will keep cranking them out - and Best Buy will undercut the pawn shops! This couldn’t happen decades ago - but it will happen now.
My favorite business model is the Blood Business. You threaten, admonish, and cajole people into thinking it makes sense for them to allow you to swipe a valuable product from their person, despite the fact that it causes pain and opportunity cost to them, and then you turn around and sell said product for $200 and up.
My second favorite is the Gambling Business. As described by Steve Wynn, people come into your business and give you all their money, then leave.
The unseemly profits derived by the American Red Cross are one of the deserved reasons it has such a bad reputation.
It’s interesting that many of the devices of the casino have a vaguely hynotic quality, like the spinning roulette wheel and the mesmerizing lights and sounds of the slot machines. The whole idea is to relax you and lull you in to turning over your money like a zombie. Hypnosis depends on hypnotic susceptibility which is supposedly deepened each time you’re brought under. It is easy to see why losing gamblers cannot get past their common sense that tells them they are throwing their money away.
I work for a toxicology / crime lab. I have to say I truly believe we are recession proof. People will still need drug testing. Post-mortem work will still need to be performed. And crimes will still need to be solved using DNA and the like.
In fact, all those may increase in bad times…
I agree, that’s probably a decent job during a recession. Not recession-proof, but resistant. Good for you!
As local governments lose their income, they will be forced to cut back on testing. I have known police investigators & coroners in small communities to balance what they invest their resources in against what their annual budget is.
Yes, but you might get sick of all the overtime too.
If you were a ‘westcoast’ toxicologist, you might have a different opinion, what with the $14 bil short-fall at the Cal State government level, and the declines in property taxes due to foreclosures and re-appraisals working there way through the system.
And as worthwhile as your work is, if I have to chose, it would have to go to the firefighters in San Diego, as I was one of those temporarily displaced by the October 2007 fires.
We are a privately owned company - not a government agency. If we were government, I’d be concerned.
like in csi? Cathy Reichs! no way!
I am glad I work for a defense contractor and can say that I have never monged a war.
I never had any reason to be guilty for working in the defense industry since 1985. The reason? Defense spending is stated explicitly in the U.S. Constitution.
The problem is anti defense leftists who always claimed to have the upper IQ levels certainly don’t prove it when they switch the definition of “promote” with that of “provide” . That is “promote the general welfare,” “provide for the common defense.”
Bail Bonds may be a growth industry:)
I predict a boom in Ponzi schemes and multi-level marketing. They’re not what I’d call legitimate businesses, but they are ways to make money from others, for a time at least.
If there was ever a time to be a natural born skeptic - this is it.
I know someone who went from owning a luxury business (failed, due to bust) to fixing up foreclosures for lenders. They are busier than they’ve ever been. Phone is ringing off the hook.
Didn’t see this posted elsewhere:
Several banks issued statements this week that they are temporarily suspending withdrawals from home equity lines out of concern that borrowers could owe more than the house is worth.
http://nctimes.com/articles/2008/02/02/business/news/19_29_392_1_08.txt
But, but, but Boom Boom is ruining the dollar to increase liquidity! These banks have got a lot of nerve, cutting hard borrowing Americans off from their equity!
This article was in Los Angeles Times as well.
Freezing equity lines!
I have been moping all day, now this is fantastic news.
Let’s hope this really starts a new fad.
NO Money Honey!
In terms of an actual recession, I don’t think that can happen,’ he said.
Famous last words.
How about a Tow Truck business repossessing BMW’s from Realtors and Mortgage Brokers?
#1 recession proof job:
undertaker (mortician)
#2
Pope (better benefits)