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Topic: Recession
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| writesonwater | Posted – 1/17/2008 5:51:41 PM | show profile They just announced the Dow fell 300 today -- so there's all kinds of worry about what a 3 percent drop in one day means. Something to remember in general is that that simply brings it to the place it was last March 16 -- but that isn't the kind of headline it gets labeled with. It is important to keep our heads when there's jitters in the air. The culprit in all of this is the mortgage market, but if people overreact, other sectors get hurt too. Media woes go back much further, right to 9/11 -- but there will be some fallout from this latest plunge as well. While some sectors may be hiring, those of us best suited to journalism may need to continue to paddle like hell for a while. |
| UGoGirl | Posted – 1/17/2008 6:13:39 PM | show profile Foodlit, how exactly does burying your head in the sand help prepare you? I've spent the last few years meticulously looking at data (financial and energy, primarily) and preparing for the unfolding crises. A couple of years ago my husband had stock in Citigroup and most of his mutual funds were in the financials with Citigroup one of the top holdings. Christ, how much Citigroup do you need? I mean, even an idiot could see that the housing bubble was set to burst and the financial sector wouldn't fare well. After getting into some of the details, he agreed to change around some investments, sell most of the Citigroup, etc. In case you haven't noticed, Citigroup is down about 50% on the year. I've also changed the direction of my career over the last several years largely to help prepare for some of the problems we (as a society) are going to face and also to prepare personally. I changed the way I eat. I changed my focus from "wouldn't it be great if we could buy a little piece of property with a view" to "wouldn't it be great if we could finish paying off our mortage as soon as possible." So, contrary to your assumptions, I rest easy because I've spent the last several years preparing for all of this. I prefer to look at the data (while still hoping for the best) rather than relying just on hope alone. |
| Cyrus | Posted – 1/17/2008 6:18:20 PM | show profile I must say I don't know how financial services are hiring either. My wife works for one of the biggest financial services companies on the planet, and although they've only laid off a small number of people (relatively speaking to their worldwide work force), there's not much hiring going on, as you might imagine. Basically, the mood across all financial services is pretty glum these days because so much has to shake out. Even if it's not one of the big companies we're talking about, a lot of other small companies depend on these guys for business. I could see where some of the others would be hiring, but at least in the NYC metro area, their total employment pales in comparison to financial. Even though advertising is big, there's a lot going on in that area in terms of executive shakeup, etc. This all could end up being much less severe than is feared, but the jury's still out on that, I think. As far as UGo's point, people actually don't see things as much as you'd think. Substitute housing for "dot com" and this whole thing played out eight years ago in terms of people planning on things that didn't pan out. Just like other crises, though, a lot of the financial crisis was caused by plain incompetence -- pure and simple. Financial institutions made very risky bets with a lot of money and got burned. Worse yet, this crisis wasn't caused by a bunch of 20 somethings with no experience, but rather by seasoned professionals who should have known better. It really is just amazing. ------ Cyrus Afzali Astoria Communications www.astoriacomm.com |
| catlondon | Posted – 1/17/2008 6:40:18 PM | show profile Cyrus: I also am not that worried. It's a much need correction in for the economy and things will level out. I do get angry when I read about people blaming the mortgage-holders for the subprime mess. Yes, they share the blame, but they were not the ones with the resources to risk billions of dollars unwisely. No the people who did that were the ones who supposedly had the ePolitical consultants and MBAs are the only two professions where you can be paid handsomely to fail spectacularly. Wall Street also needs to get real about its expectations--Intel posted record profits and its stock got slammed because it "wasn't good enough." |
| rulebook | Posted – 1/17/2008 6:45:46 PM | show profile "Sure, e-commerce companies are hot, technology in general, biotech, financial services and advertising/search engine marketing agencies." E-commerce companies: What is this, 1996? E-commerce is an industry? Technology in general: not sure how you could ever quantify this. Biotech: I am ignorant in this area, no opinion. Financial Services: Simply a crazy statement, at least here in NYC. Advertising/Search: My industry. Things are not dire yet, but I think they will approach that status soon. Regardless, most shops are definitely in a holding pattern. |
| foodlit | Posted – 1/17/2008 7:01:21 PM | show profile UGOGIRL, you're missing the point completely. No one is saying put your head in the sand, that would imply do nothing. I'm saying the opposite. Work harder. Look around and see what areas are booming that you can capitalize on so that when the slowdown hits its not as devastating. Why is that concept so difficult for you to grasp? |
| foodlit | Posted – 1/17/2008 7:06:56 PM | show profile Rulebook, I'm a headhunter. I was asked which industries are hiring. The ones I listed are the active ones. Granted I am in Boston, not New York, so financial services for instance isn't nearly as relevant. However, don't kid yourselves that the financial services companies aren't hiring. They are. They're also laying off. Bank of America cut 3000 jobs a few months back and are going to cut another 650. They're also hiring in other areas. I probably shouldn't have mentioned that industry though because they are not really in a growth mode, given the mortgage fiasco. But the other industries are. And Rulebook, I specified e-commerce, as a part of technology because like the internet boom, which I benefited and loved, there are a whole host of e-commerce related businesses, both direct e-commerce and software and services that support e-commerce, now that people have finally figured out how to make money on the internet. Plus you have the new new social networking companies like LinkedIn and Facebook that are red hot. |
| Marie | Posted – 1/18/2008 2:05:26 AM | show profile Floodlit makes one interesting point that is definitely worth thinking about. Companies do definitely lay off and hire at the same time. They do! I asked an HR person about it at a company I was working for that was doing this, and granted, like most things that anyone from HR utters, the explanation was incomprehensible and somewhat uninformed, but the company was doing this. |
| UGoGirl | Posted – 1/18/2008 9:08:15 AM | show profile Foodlit, I get what you're saying. You're saying when you first see the ripples from the Tsunami, start paddling hard and plan to keep paddling hard to keep your head above water. I would argue that there is a better way. Expect that tsunami well before there are any ripples evident. Build yourself a life raft, figure out what's important to take, have an escape plan. So you can rest more easily in the meantime. I posted an article in Current Events under surviving a recession, but in a nutshell, live your life as if you are going to be forced into an early unwanted retirement (don't live beyond your means, save, get out of debt, etc.), don't expect that your salary will continue on an ever upward trend. Find something to do that you care passionately about and hopefully you'll therefore do it well and have more chance of staying employed. |
| foodlit | Posted – 1/18/2008 10:37:26 AM | show profile UGOGIRL, With this last post of yours, if you go back and read my posts more closely you'll see that we're saying the same thing here. The best way to deal with a recession is to prepare for it, so that when the Tsunami comes, you're not swept away, but are well sheltered and able to ride out the storm. The way each individual does this will vary. I just offered some general suggestions here, such as taking on more work in different areas so that when the slowdown comes your income stream doesn't totally dry up. Happy Friday! Pam |
| foodlit | Posted – 1/18/2008 10:42:41 AM | show profile UGOGIRL, I meant to add that your suggestions are great as well. To live within your means or below them rather than overextending yourself. I saw quite a bit of that after the internet bubble burst, when people had bought houses based on the option profit they depended on....that never materialized. I don't know how doable this is in the metro NYC area, but one way that my sister and her husband were able to not only weather the last downturn in the economy, but also able to save quite a bit of money, was by buying a two family home. They lived in half and rented the other half for seven years, and it almost completely covered their mortgage payments. Then when they sold they made a decent profit as well, and rolled it all into a nice single family. (They unexpectedly had twins, or would have stayed in the two family longer, but needed the room). |
| UGoGirl | Posted – 1/18/2008 11:45:55 AM | show profile Very smart move on your sisters part, to have their own home plus a steady income stream next door. I'm not sure now's the best time to buy real estate, but anyone who did this kind of thing 5 or 10 years ago had great foresight (especially if they did this in a growing area rather than the dying rust belt). |
| Cyrus | Posted – 1/18/2008 12:39:51 PM | show profile correction necessity and Wall St Cat, You make good points, but the chief thing to remember is rationality goes out the window during times of either steep increases or declines in the economy. So while the numbers aren't dire yet, companies often overreact out of fear on what's to come. For example, Citibank cut massively during the early '90s recession, only to find they couldn't respond quickly enough once things improved because they didn't have the people. The impact of all these things depends on one's situation. For example, a renter in NYC didn't feel the big jump in natural gas prices after Katrina that had a gas bill in the metro area for a 3-bedroom house at $400 a month. Likewise, Boston is a different world in many ways from NYC, as Pam points out. We know it because of its proximity and history, etc., but population wise, it's a mid-sized city. Also, remember that NYC's economy disproportionately depends on Wall St.for revenues. So when it sinks, a lot of people and local govts. are affected. Just the shrinking bonuses alone mean a much slower apt-buying season in NYC. ------ Cyrus Afzali Astoria Communications www.astoriacomm.com |
| basenji | Posted – 1/18/2008 12:51:03 PM | show profile I am swamped right now (and actually turning away work at the moment), but only because I have diversified -- I do writing and editing for a variety of clients. Also, I have a couple of anchor clients who need my services because they're belt-tightening as far as hiring/replacing full-time staffers. I have two anchor clients like this. The trend I see is that news outlets are hiring more freelancers--particularly to write/edit online content. And I also see publishing companies increasing the number and frequency of publications (print and online) with fewer staff members. I am still nervous about the recession, but honestly, I think we've been in one for awhile. I think someone on this thread already pointed out that it seems to be an-after-the-fact announcement anyway. It might get worse before it gets better. But look at it this way, if you're freelancing and you've done a good job of diversifying and you have multiple clients, you've almost got more job security than someone sitting in a cubicle somewhere getting a paycheck from only one source. That's the way I look at it anyway. And if you consistently do good work and provide what the clients need, they'll keep hiring you to do work. Also, if you've got extra money, it's a fabulous time to invest in the stock market. You can buy more for less (and the stock won't be down forever). |
| writesonwater | Posted – 1/18/2008 12:57:40 PM | show profile One thing about real estate is that in a slowdown mortgage slump, people can't buy, so they rent. THe trick with rental property is not paying too much for it, so you have a margin of comfort that can tide you over, pay for repairs etc. I know people who would rather give a house back to the bank than try to rent it out to cover payments after they couldn't sell it. I've landlorded and regretted landlordng, and I would still rather rent t out than not. |
| writesonwater | Posted – 1/18/2008 1:00:47 PM | show profile One issue with belt-tightening is that it has its own effect on the economy. I have just been thinking we dine out way too often, and with a wedding to save for, I have been cooking at home more. I've also put discretionary spending on hold (and found in the process that necessities cost plenty on their own, like the new washer and dryer I ordered this week because the dryer died and the washer just had one out of three cycles left working.) If suddenly everyone decides to live within their means, it will wreak havoc on the economy, though. |
| HyancinthGirl | Posted – 1/18/2008 3:22:17 PM | show profile I beg to differ that we aren't in a technical recession. With my savings account rate and 401k (and other retirement funds), as well as my job (layoff) going down, down, down, I'm wondering if my stashed savings will be enough for me to weather the storm. It's keeping me up at night, even as Mitt promises to revitalize Detroit. Let this be a lesson to those who are looking for jobs. I'm highly attune to the automotive market because I've written for it for the last 10 years, but those jobs I seek, at my level, all require a specialized knowledge of another industry. It wasn't pure laziness as my job occupied 70 hours of my week, but hindsight is always 20/20. Diversity is the key, but complacency is the villan. |
| Metro Writer | Posted – 1/18/2008 5:41:40 PM | show profile The field of journalism has been in a recession for a long time. Since 9/11, ad revenues have declined big time, there are fewer and fewer full-time jobs, more wire stories, and pay that's absolutely pathetic. Magazine rates have not been rising and they're grabbing all rights. That said, some people always manage to land on their feet no matter what happens. |
| UGoGirl | Posted – 1/18/2008 11:21:59 PM | show profile "If suddenly everyone decides to live within their means, it will wreak havoc on the economy, though." You know, a couple of months ago I would've said something like it will wreak havoc on the economy if we continue living beyond our means (which is true... as the world won't continue supporting our indebtedness forever... especially as it becomes clear we wil become unable to pay our debts). But at an individual human, family level, it's a lot harder to say this kind of thing because people actually do lose their jobs, get depressed, go hungry, etc. I also heard this episode on This American Life recently about Cambodia and it's clothing manufacturing. They are trying hard to have relatively good labor conditions for employees, both due to a clinton-era program and to attract socially responsible companies into buying products from cambodia. A woman who works in the garment industry in cambodia makes many times more than the typical wage in the country and can support her entire extended family. But this depends on Americans going to places like The Gap, Nike, the Limited, etc. and shopping and buying new stuff. So I can toot my own horn for not shopping at these kind of places and buying mostly used clothes at thrift stores, but there are women in Cambodia supporting their families who depend on Americans shopping. It's all just kind of sad to me. We can't keep living the way we are, and yet they are depending on us to do so. The other thing I've been thinking about is how with the cheap energy over the past century or so we've replaced human labor with fossil fuel powered mechanized labor (farming, mostly, but also building houses, rail, buildings, etc.). Now that we don't need many people doing those things we have to create this economy of paper pushers and consumers to keep us with jobs, because if we don't have jobs we have bored people starting riots and revolutions. So "the economy" depends on us buying junk. Gads. The whole thing is just sick. |
| foodlit | Posted – 1/19/2008 12:17:03 PM | show profile Bulletinizer, Ask those of us who live in MA how we feel about Romney? Put it this way, no one I know in this state will vote for the Ken Doll candidate. That should tell you something, when the former governor of MA has no support in his home state. |
| UGoGirl | Posted – 1/22/2008 10:54:29 AM | show profile I told you ... I told you... na na na na na na From Marketwatch: **** Odds are, U.S. is in a recession Commentary: Three of 5 indicators flashing warning signs for growth WASHINGTON (MarketWatch) -- It's much too soon for an official judgment on whether the U.S. economy has fallen into a recession, but early indications show that a recession may have already begun. Of the five monthly economic indicators used to judge whether the U.S. economy has fallen into a recession, three are declining and one other is flattening out. Three of the five numbers peaked in September. Only one has grown with any vigor over the past few months, but it's starting to look weaker. Calling a recession is as much art as science. The numbers now in hand are preliminary, subject to large revisions. What now seems very weak could be revised to show significant growth. That's why the academics who decide whether we've been in a recession wait a long time before making a judgment. In some cases, the most recent data are more than two months old, a frustrating delay for those who want to know what's happening right now. What now looks like a peak in activity could turn out to be a local peak or a false top, with the economy regaining strength in the next few months. |
| UGoGirl | Posted – 3/7/2008 12:29:15 PM | show profile Can we agree that we're clearly in a recession now? It seems that this would not be a good time to change jobs (under most circumstances at least). Or to break out into freelance (unless no other choice). |
| Cyrus | Posted – 3/7/2008 12:56:11 PM | show profile I think we are clearly in one at the moment. However, the NY Times today (or perhaps the WSJ, can't remember) has a good article about how a number of tech workers are shunning the glamour of options and other potential trappings of start-ups to work for established companies. At least in Silicon Valley, seasoned tech professionals are still able to find jobs. So while we probably are in a technical recession, the employment picture isn't horrible yet. ------ Cyrus Afzali Astoria Communications www.astoriacomm.com |
| caitlinkelly | Posted – 3/7/2008 1:23:50 PM | show profile I agree with basenji about work. I've never been busier and have also had to turn down work; one of my best clients is a paper who needs copy and hasn't yet hired the staffer who, once they arrive, will kill that opportunity. I'm spending more time and energy reaching out to find new clients as well as working with long-time ones. I also agree that, if you are able to get a revenue stream going from multiple sources, you are much less vulnerable than someone waiting in a job for the ax to fall, when all you'll likely get is unemployment for six months. I think if you're willing to really cast your net far and wide, from trades and regionals to personal essays and service pieces -- ie. write just about anything well and fast you're OK. |
| foodlit | Posted – 3/7/2008 4:33:16 PM | show profile No, we're not clearly IN a recession. Not yet. Though there seems to be a slowdown. Doesn't mean it has to go to a full blown recession though. Several rate cuts are helping and depending on the industry, there is still a lot of hiring going on. My field is technology and I am crazy busy. However, I'm not foolishly optimistic, I'm watchful in case this starts to slow even a hair, I'll be casting a wider net to tap into new niches that are still hot. Even in a recession there are always different sectors that are doing well, so the key to staying afloat is to diversify, so when it does hit, you're as badly affected. |
