18 January 2008

What Should You Do in a Recession?

My brother, a Ph.D. Economist at Baylor, sent me to Intrade. This site is a prediction market, where buyers and sellers can bid on the likelihood for certain events to occur. Currently, the US will go into recession in 2008 is trading at 73 (meaning there is a 73% likelihood that this will occur). Note the definition of recession given: For expiry purposes, a recession is defined as two successive quarters of negative real GDP growth.

I'll let more knowledgeable folks get into the nitty gritty of what's going on, why we're in this mess, how long will it last, and what happens at the other end. In my view, we're going to see a few things in 2008:

>> The dollar won't gain significant strength vs the Euro and major Asian currencies
>> Oil prices are going to stay in the $80-120 range
>> Price increases are going to continue to be commonplace in the consumer marketplace, especially tied to scarce recources (stagflation condition)
>> The housing and sub-prime crisis hasn't shoved fully through the economy

So what do you and I do during these times? Here are a few ideas to consider.

1. Aggressively reduce debt Take a good, hard look at your short-term liabilities, including credit cards. Set aggressive goals to cut your expenditures, increase your savings and available credit, and work hard to eliminate any debt with high interest rates.
2. Find one-three additional revenue streams This could be a side business, a part-time position, selling of stuff that you can produce or obtain (excluding theft). Start building now in the event that you need to ratchet up one or more of these sources quickly.
3. Prepare your resume for August 2008 and June 2009 This isn't a typing and formatting exercise. What do you want it to look like after the first half of this year? What can you get done over the next eighteen months? Be prepared as companies will accelerate layoffs under the earnings pressures to come. If your company is struggling, now is a great time to start networking. It is always easier to find a job when you have one.
4. Make the switch if you're thinking about it Have you been pondering taking a new path in your career, say switching to being and educator or heading to Healthcare? Figure out how to start back into educating yourself as soon as possible so that you're ready with new skills in 1-3 years.
5. Celebrate life While you cut costs, find fewer better things to do with your time and resources. Cook and over-the-top gourmet meal once a month. Take only one big trip but make it the best one ever. Take on a new hobby that interests someone else important to you. Shut off your computer two days a week when you aren't working. Use this time as a time to energize the health of your relationships and yourself.
6. Acquire opportunistically There will be deals to be had, so find some resources to take advantage of them. This means that you'll have to spend more time being sure you know whatever it is that you're focused on (so that you know when the deals are great or when you're the sucker). This year will be a year of the buyer for many, many things if you have the resources deploy. Find some resources to deploy and get after.
7. Wait a bit longer, then spend on advertising and marketing These are the prime areas to cut in most businesses, which means these are the prime times to get great deals as well as to stand out in whatever industry you are in. If you are in the advertising and marketing industry, this will be a time where ROI and creativity will be king.
8. Don't shrink away at work Benjamin Franklin, in his autobiography, said that he carried a large package across the streets in the morning then returned with it in the afternoon. The purpose was to give the impression that he was a hard worker. Now is the time to be a hard worker. Take on more responsibility and don't quibble about whether you should be paid for it. Become indispensable and visible. Make absolutely sure that whatever you do is contributing directly to the success of your company. Find cost savings each month, no matter how trivial. Run with growth ideas.
9. Hold off on toys Even if the next plasma screen or iPhone looks enticing, just say no. Liquidity is more important than being cool.
10. Take the losses Sell whatever you were going to sell at the best price you can get. It won't get any better later.
Bonus for parents Teach your kids what's important in life Don't let this be a time that breaks your family apart or tears down your marriage. Show your kids how irrelevant things are, how unimportant what everyone else has is to your self-worth, how important intimacy and involvement are in the lives of your family. Use this time as a time of rebirth for your loved ones rather than a time of tremendous stress.

2008 is going to suck, make no mistake. You can navigate through this if you start now!

3 Comments:

Blogger Markus Arelius said...

Good post. I also believe that people need advice on what to do with what they have - their savings (US dollars in the bank), mutual funds, stocks, variable insurance policies with cash values, etc. If bond unsurers don't have any cash to back things up, it won't be long before "FDIC" too means absolutely nothing and we begin to see the first run on banks in America since the 1930s.
Many are using the refrain "cash is king". I guess this means US dollars cash so that one can pay for things, but each day the US dollar declines in value and so too the values on Wall Street. A lot of 401K plans, in my opinion, may be decimated this year. That possibility alone is a very scary idea to Americans, who are the most anti-savings oriented species on the planet. Personally, I would not be surprised to see a lot of wealthy people become poor and a lot of poor people who have been "acting wealthy" with their credit cards and HELOCs to become completely destitute in the coming year. Your post on "what to do" is very timely and it should be read.

5:05 PM  
Blogger  said...

A片,A片,成人網站,成人漫畫,色情,情色網,情色,AV,AV女優,成人影城,成人,色情A片,日本AV,免費成人影片,成人影片,SEX,免費A片,A片下載,免費A片下載,做愛,情色A片,色情影片,H漫,A漫,18成人

a片,色情影片,情色電影,a片,色情,情色網,情色,av,av女優,成人影城,成人,色情a片,日本av,免費成人影片,成人影片,情色a片,sex,免費a片,a片下載,免費a片下載

情趣用品,情趣用品,情趣,情趣,情趣用品,情趣用品,情趣,情趣,情趣用品,情趣用品,情趣,情趣

A片,A片,A片下載,做愛,成人電影,.18成人,日本A片,情色小說,情色電影,成人影城,自拍,情色論壇,成人論壇,情色貼圖,情色,免費A片,成人,成人網站,成人圖片,AV女優,成人光碟,色情,色情影片,免費A片下載,SEX,AV,色情網站,本土自拍,性愛,成人影片,情色文學,成人文章,成人圖片區,成人貼圖

情色,AV女優,UT聊天室,聊天室,A片,視訊聊天室

一夜情聊天室,一夜情,情色聊天室,情色,美女交友,交友,AIO交友愛情館,AIO,成人交友,愛情公寓,做愛影片,做愛,性愛,微風成人區,微風成人,嘟嘟成人網,成人影片,成人,成人貼圖,18成人,成人圖片區,成人圖片,成人影城,成人小說,成人文章,成人網站,成人論壇,情色貼圖,色情貼圖,色情A片,A片,色情小說,情色小說,情色文學,寄情築園小遊戲, 情色A片,色情影片,AV女優,AV,A漫,免費A片,A片下載

4:01 AM  
Blogger 伊凡姐姐 said...

酒店喝酒

酒店消費

喝花酒

粉味

台北市酒店經紀



台北市酒店經紀人

台北酒店經紀公司

禮服店

台北市酒店經紀公司

禮服酒店

酒店兼職

酒店經紀人

酒店經紀公司


酒店經紀

酒店兼差

台北酒店經紀

台北酒店經紀人

酒店打工

寒假打工

1:53 PM  

Post a Comment

<< Home

FREE counter and Web statistics from sitetracker.com