We were really disheartened by some of the data in today’s Recession Briefing:
* 23% of homeowners’ properties are underwater
* 13% of parents of adults say one or more of their grown children have moved back in
* 34.5% of black males between the ages of 16 and 24 are unemployed: these are Great Depression proportions, folks
* 17.5% of people are unemployed, according to U-6 data, which includes discouraged and part-time workers who are looking
* The Small Business Administration has run out of money to back loans issued to small businesses.
* 33,000 people were laid off from from a single employer, the postal service in Russia
Things aren’t great, and maybe even scary. In an interview with CNBC.com, one economist suggested that, “Unless you create another bubble in which the economy can create jobs, then you’re not going to have growth. That’s the sad truth.” As such, Michael Pento, chief economist at Delta Global Advisors, added that he expects more of an L-shaped recovery—prolonged pain with no sudden rebound…
Christmas at my house last year featured a fragrant spruce, an occasional snowy view out the back window, and a killer holiday party decked out in subtle but elaborate ribbons, bows, candy canes and such. Santa showed up. So did about 50 people — all of whom I served wine and extensive hors d’oeuvres. And who were greeted warmly by a paid coat check guy who proffered parting gifts on their way out. It probably cost me, all told, about $300 or $400, or more (there are always accoutrements, darling, that also must be purchased).
Of course, I can’t remember exactly how much it cost, because it didn’t matter so much. It wasn’t precisely reckless spending; it was intentional spending, with the intention being to host a swell party where everyone had a fabulous time. And they did! I’m sure if there had been a competition, I would have won Hostess of the Year. I am happy to provide testimonials…
Ever since the $787 billion stimulus package passed earlier this year, economist Paul Krugman has been the squeaky wheel moaning about its small size.
“The stimulus bill looks helpful but inadequate, especially when combined with a disappointing plan for rescuing the banks,” he said at the time. “The complacency now setting in over the state of the economy is both foolish and dangerous,” he’s said since, in column titled “Mission Not Accomplished.” And at a recent talk at White & Case for the Hudson Union Society, he kept up the drumbeat:..
Next week, 38.4 million of us are expected to go “over the hills and through the woods”—or at least to travel by car to a Turkey Day destination. That’s just a slight 1.4 percent uptick from last year. Back then, gas prices were much lower, having fallen off from a high of $4.10 a gallon in the summer of 2008 to around $1.80 by the time Thanksgiving rolled around. But nerves were perhaps also more frayed then, too, as we watched the banking system continue to teeter.
This year, the national average price of gas is about $2.70 a gallon, so we will have to spend more to get to grandfather’s house. Pair that with a continuing climb in the number of people unemployed, and you’d actually think the number of travelers would be even lower.
Either way, as you contemplate the hours you’ll spend on a jam-packed I-95, or wherever you may be, we’d like to bring back the Recession Road-Trip Games we offered up in the summer…
It might sound obvious, but if you’re running a business, you should aim to bring in revenue that exceeds the costs of running the business. It’s a point that panelists at New York Entrepreneur Week today at Columbia University felt they needed to reiterate, which may indicate that entrepreneurs are losing sight of what’s important in creating a successful business: income that will allow your business to grow.
“It’s a very simple thing to say,” said JP Werlin, Pipeline Deals. “But it runs contrary to what you’re taught in the venture capitalist industry, but – ‘no expenses before revenue,’ it’s a mantra we have internally in our company and it’s helped us get to where we are today.” PipelineDeals, which makes software for salespeople, never raised venture capital, but developed a company structure that allowed it to build slow and scale based on the revenue they brought in – not on spending money raised from investors…
Says who: Mark Zandi of Moody’s Economy.com.
“Small business tends to lead the way out, and that’s just not happening here.” (via USA Today)
Why it might be false: It might be false because we might be due for a slight redefinition of “small business.” In recessions and other periods of some job loss, more businesses tend to be created. Entrepreneurs are energized, and others are just looking for a way to generate some income. In New York, laid off Wall Street executives have been launching companies in part through a Bloomberg-backed incubator funded with $45 million. In the state of Colorado, the number of new business registrations has increased over last year…
Tight times have brought out our ingenuity in spending and this second holiday season of the downturn is no different. We rounded up a few of our favorite new rules for surviving the holidays:
* Regift. It’s both budget-friendly and good for the environment: Recycle those unwanted yet still brand-new socks, wine bags, candy dishes, etc. “Regifting” – the act of giving someone a gift that you had received – is growing fashionable. A poll by Consumer Reports found that 36% of U.S. adults said they would recycle a gift this year, compared with 31% last year and 24% in 2007.
* Group-give. First, pare your list to its essentials, then find a buddy or two to go in on gifts for those on your list. This tip comes from Jack Chary, who also recommends starting a Christmas savings account in the future. Good thinking…
A daily review of the employment fallout around the country and the world.
Today’s total: 5,310
First, the (relatively) good news: Few employers announcing layoffs today.
The rest: At British Airways, about 4,900 employees will lose their jobs. …Creekside Mushrooms in Penn. plans to lay off 260 workers. … In Grand Rapids, Mich., 150 people may be let go. …
When New Jack City was released in 1991, times were indeed tough—New York City hadn’t yet seen Rudy Giuliani unleash his police force to clean up the streets; the dot-com and real estate booms hadn’t propelled Manhattan to epic heights of prosperity. But if the facade is better now, the times are tougher, at least by the measures above. First-time unemployment claims last month? Nearly double the “month” in New Jack City: 530,000 in September. Americans with income below the poverty line totals 47.4 million by at least one estimate. As for economic inequality—well, that’s an old story by now. Homelessness is only getting worse. And the national debt stands at $12 trillion…
How so: With the Dow Jones Industrial Average nearing the 10,000 mark, it would seem good times are coming back. The last time it was around 10,000 was last fall, and it was just one short year earlier when it hit its high around 14,000. Remember that? Back when we were all swimming in cash, vacationing in St. Bart’s, shopping just because we felt like it… (You were doing that, right?)
Good signs: The macros are up, from the DJIA (in March we were talking Dow 5,000!) to strong earnings from Google and Apple to a strong showing from the almighty GDP, and even housing data is on the move (well, sales at least, although foreclosures continue their nightmarish rise). Is this change we can believe in?…