Recession Briefing 6.17

What you need to know today to survive and thrive in the recession.

New analysis of job market data finds that Phoenix, Ariz., is where college graduates have the best chance of finding work in the current economy. (BusinessWeek)

Even sex is selling for less as a result of the recession: clubs and brothels in Europe have been offering discounts and other special offers to drum up business. (Associated Press)

President Barack Obama yesterday predicted that the unemployment rate would reach 10% this year. (Bloomberg)

The economic downturn is redefining retirement for many baby boomers. After losing jobs during what they thought would be some of their peak earning years, many are struggling to get back into the workforce. (USA Today)

A report from the State Department says the recession is causing a rise in human trafficking around the globe. (USA Today/On Deadline)

Forget about all the fired workers: What we really need to know is how New York’s super-rich hedge fund wives are learning to cope with the recession. (Times of London)

Economists advising the American Bankers Association said the U.S. recession will end in the third quarter, but lingering high unemployment and large federal deficits may pose a longer-term threat. (Reuters)

Whither the “American Dream?” Some families discover that cutting back from the boom’s excesses isn’t such a bad thing. (ABC News)

Banks continue to write off credit card debt as consumers hurt by record high unemployment default at an increasing rate. (CNN/Money)

“If our economy picks up too quickly, price cuts for food, real estate, and consumer goods due to the recession will fizzle quickly and be replaced by soaring inflation,” worries Boonie Erbe. (U.S. News & World Report)

If you come across a good article or blog post about the recession pass it on. To receive Recession Briefing in your inbox, subscribe to our daily email.

The Recession Will End… Later this Year

Says who: Richmond Federal Reserve President Jeffrey Lacker

“It now appears as if the pace of contraction is diminishing, and at some point later this year, activity will bottom out and begin expanding again.” (via Reuters)

Why it might be false: Well, for starters, how about those rising interest rates? Rates on 30-year fixed mortgages increased to 5.79% last Wednesday – that can’t be very good for the single family housing starts which have risen steadily since a low in January. And we think that generally, Lacker’s just a bit too U.S.-centric and myopic. Let’s not forget, the Treasury Secretary Timothy Geithner just met with his G-8 counterparts. The U.S. economy is not an island, it’s entangled in the global one – for better or for worse. Any prediction on the recession’s end can’t ignore international market indicators like a record loss of 1.22 million jobs in the 16-country euro zone in the first quarter.

Why it might be true: We’re not about to call these “green shoots,” exactly, but it seems like good omens that new jobless claims and consumer spending are no longer in freefall. Also, ten big banks are expected to start repaying the government bailout funds, a big sign considering that the financial industry played a big role in the creation of this crisis. On the global front, there are also some positive signs from China with industrial output increasing 8.9% and retail sales up 15.2%, at least according to the Chinese National Bureau of Statistics.

Our call: The end of the year is not completely unrealistic given the positive shifts in unemployment, consumer spending and banking, but it also depends both on how domestic and international factors play out. Either way, we’re going to have a little faith that the bank repayments are good signs that an industry that helped create the crisis will try to redeem itself and lead us out of it.

My Life in Tents

It turns out you can get a one-bedroom for under $500 in New York City—if you’re willing to sleep on the ground.

Our friends over at Brokelyn broke (ha ha) the story of three college grads who are camping out in a backyard in Bushwick, Brooklyn. Each dude is paying $100 a month to pitch his one-man tent on plywood slabs laid over the mud.

Their site is less Depression-era shantytown than nouveau poor adventure—it’s a “badass thing to do,” said Louis Frank, a 22-year-old NYU grad who works for a Manhattan bus tour company. Note to the inspired: his friend Simon Levy says the Tempurpedic mattress is key. Read more about their escapades with leaky tents, smelly feet and Craigslist here, or pop over just to check out their logo. The NY Post picked up the story this morning.

Tent cities have been springing up in other, warmer places, but this is a new one for New York. A few months ago, CNN.com reported that sales of camping gear were up. Maybe it’s not because everyone’s using their furlough for a vacation.

iPhone Apps to Manage Cash Woes

You don’t have to ditch your office space like Big Moving Picture did in order to survive the recession. To keep its business intact until conditions improved, the San Diego-based company went into “hibernation,” shutting the office, dismissing some employees and going virtual with the rest of the team.

In the recession, virtual means cost efficient, but you need certain tools to ensure it’s also time- and effort-efficient, too.

If you’re one of the growing number of business users carrying an iPhone, you’ll be happy to know that there are several apps available to help with one key area of business: cash flow management.

Quicken – If you use QuickBooks to manage your cash flow, this app lets you look into your balance, latest transactions, enter transactions from the road and see how it’s all performing against monthly budget levels. ($9.95/month per account)

Calc-12E RPN Financial Calculator – If you don’t already know what the HP-12C is, this probably isn’t for you. Based on the most popular portable financial calculator out there, the 12E is indispensable for business owners who need the accountant’s calculator on hand in meetings with investors, in real estate deals and the like. Enter and edit cash flows, add comparative investment analysis. ($19.99 download)

Spreadsheet – You’ll need the spreadsheet app from Softalk. It doesn’t do much on its own, but it will come in handy when you want to review Excel budgets from the road. ($7.99 download)

Credit Card Terminal – If you want to collect payments on the spot – and why not seize the moment when customers are offering – this app, while not cheap, can keep cash flowing. ($49.99 to download, $25/month subscription, and $.24 per transaction)

Omni Invoice – This app allows you to issue invoices from the road. Speeding up the process of getting paid. ($9.99 to download)

Screwed: 1,300 at Cessna Aircraft Co.

A daily review of the employment fallout around the country and the world.

Today’s partial total: 1,809

In another round of layoffs, Cessna Aircraft Co. is planning to cut 1,300 more jobs… The state of Tennessee saw the loss of the 358 jobs last week… Hach Co. in Grants Pass will be laying off 60 employees in phases beginning August 3… CUNA Mutual Group is terminating 52 positions, creating a 12 percent reduction in staffing… Guardian Life Insurance lays off 39 employees at its Spokane location… The Stark County Board of Mental Retardation and Developmental Disabilities (MRDD) will be withdrawing at least 138 clients by July 1 and subsequently laying off an undisclosed number of employees.

Are you among the screwed? Check out Recessionwire’s Laid Off 101. Read more about layoffs at the sites compiled on our layoff tracker page.

Recession Briefing 6.16

What you need to know today to survive and thrive in the recession.

The Obama administration has turned back pleas for emergency aid from one of the biggest remaining threats to the economy — the state of California. (Washington Post)

Credit card companies are increasingly doing something they have historically scorned: settling delinquent accounts for substantially less than the amount owed. (New York Times)

As the recession lingers on, more travelers are redeeming their frequent flyer miles. (USA Today) But credit card companies have said they may be reducing rewards. (Recessionwire)

Many companies are turning to a novel but unheralded program known as work-sharing, where employers reduce their workers’ weekly hours, often by 20 or 40 percent, and then states make up some of the lost wages. (New York Times)

Since the recession started blocking many traditional career paths, record numbers of 20-somethings, and even many established professionals, have ventured out on a new track: public service. (Houston Chronicle)

Like many Americans who have been forced to redefine success because of the recession, laid off auto worker Troy Long is trying to shrug off his misfortune and become a professional wrestler. (Washington Post)

The not-so-great financial lessons we learned from board games as kids. (The Big Money)

Still lucky enough to have a job? You’re likely doing the work of two or three people, working longer hours and not getting any extra pay. (CNN/Money)

Everyone knows how the recession has impacted job seekers — there are fewer jobs and lots more competition — but here’s what it looks like from an employer’s side. (U.S. News & World Report)

High style at low prices may be possible for smart shoppers — many of whom are finding the best deals at their neighbors’ houses. (CBS News)

If you come across a good article or blog post about the recession pass it on. To receive Recession Briefing in your inbox, subscribe to our daily email.

Recession Lexicon: Nouveau Poor

/n. Your class distinction if you used to have two private jets and now just have one. Or had to give up your Pilates class or nanny. You’re feeling poor, but really, you’re not actually poor-poor.

The term has been around for months now, and Barbara Ehrenreich, a chronicler of social change, discussed this demographic in the New York Times on July 14. The recession, she says, has been portrayed as “smudging the dizzying levels of inequality that characterized the last couple of decades and squeezing everyone into a single great class, the Nouveau Poor, in which we will all drive tiny fuel-efficient cars and grow tomatoes on our porches.”

Just as “nouveau riche” was a pretension, “nouveau poor” occupies the same distinction.

Out on the Street: Smart or Lucky?

On Wednesday I had my second interview with a major US bank. And when I say interview with the bank, I mean I met everyone in the company. I was there for seven hours. I met the head of sales, the head of trading, the head of debt capital markets, the copy guy. You name them, I met them. Fingers crossed, but I think it went well—other than my meeting with Yuri, the 28-year old wunderkind trader.

Yuri made $30 million for the firm last year, his second year of trading, a fact he succeeded in mentioning within the first five minutes of our interview and at least twice more. If you extrapolate the astronomical growth rate of his investment return, he’s sure to make 300 billion gazillion dollars by the time he reaches my age. Just ask him— he’ll tell you.

Other than his periodic reminders of his success, the interview progressed with the familiar series of questions. He started with the soft “tell me about yourself” and moved on to my current views on markets. I had rehearsed my talking points and was sailing through until Yuri went off on a tangent…

Recession Briefing 6.15

What you need to know today to survive and thrive in the recession.

Vegetable seed producers and merchants across the country are reporting sales increases of as much as 75% this year, and even some shortages, especially of staples like beans, potatoes and lettuces. (Washington Post)

Fake furloughs: Some workers work through their unpaid vacations, because they fear for the long-term safety of their positions and hope their self-sacrifice impresses the management. (New York Times)

The downturn is forcing men to spend more time at home, altering roles everywhere from the laundry room to the child-care center. (Christian Science Monitor)

Screwed: 2,300 at UTStarcom

A daily review of the employment fallout across the country and the world.

Today’s partial total: 7,587

UTStarcom is cutting 2,300 positions globally, over half of its employees, by the end of the fiscal year…American Airlines is set to slash 1,600 jobs…the City of Chicago is laying off 1,500 workers, 400 more than expected…Textron’s Cessna plans to cut 1,300 jobs, leaving the company with about half of its workforce…General Motors is laying off 887 workers in Wentzville and closing dealerships…