Recession is over? Is it really?

[TC2]

I keep hearing people on TV saying recession is likely over. Is it really?

What's you take on that? Do you see opportunities?

As far as I can see in Gilbert, Chandler, Mesa, Tempe and Scottsdale AZ, I think it's far from over, but I do see opportunities out there.

Just saw the news about jobless rate increasing in 5 states on CNN.
Unemployment: 5 states see jobless rate climb above 12% - Sep. 18, 2009

In the past few months, I have attended networking with many local business owners, commercial property management companies and developers. 90% of them give me the impression that recession is far from over.

Many local businesses in my home town are closing. Empty commercial properties are everywhere. Many are not even finished. Some are up for auction. People simply don't buy things that they don't really need and start watching their own health. Many fast food restaurants, ice cream shops and cigar shops are closed.

I do see some businesses going stronger and become diversified.
1. I see landscaper distributing flyers on residential area.
2. I see auto repair shop offering car wash
3. I see more named brand franchise businesses offering low start up cost opportunities
4. I see more winery shop opening and offer space for local meetup
5. I see more businesses join local chamber of commerce
6. I see local printing shop expanding their space to take on T-Shirt and gift printing
7. I see more people eating at Chinese Dim Sun restaurants (not sure why)
8. I see more people learning secondary language
9. I see people starting export business (Ex. export used bra to third world countries - Very interesting)
10. I see local TV station, Radio station and newspaper companies offering
local oriented advertisement
11. I see more solar penal on the roof.
12. Some Nails spa and hair salon are busier

Obviously, there are many opportunities out there for us to grab. Do you see any recession proof business opportunity?

 

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[NoMoneyDown]

From what I heard, consumer spending has jumped, so many are claiming that is a sign of recovery. I'm a little leary of basing such a huge answer on something like that, though. If anything, with unemployment still high, a rise in consumer spending would have me MORE worried.

 

[Pinnacle]

Recession over.

Once the bubble is re-inflated, then maybe the recession will end. It sucks to be responsible.

 

[biophase]

Not sure if its over, but sales are definitely up in the past month in my stores.

 

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[hakrjak]

Not only is it not over, but it started back in around 2001, and nobody is admitting it. My salary is now 60% of what I was making in 2002... 90% of the people I worked with in 2002 are now laid off from the company.

Recession over? Are you kidding me?

- Hakrjak

 

[Forza]

I read somewhere that the US economy will appear to be going ok, then hyperflation will kick in.

 

[PaulRobert]

No the recession is NOT over. Just because consumer spending has risen doesn't mean we can all go "Yay, all our problems are over!" Consumer spending rose because stores had crazy sales so they sold more. Cash for clunkers also boosted sales in the auto industry. The only way I would declare this recession over and done with, is when millions of people that lost their jobs get them back, the value of the dollar rises, and more houses are bought by qualified buyers. And all the "Buy gold from us!" commercials on T.V. Notice how I did not mention that the Dow gets back to more than 11,000 points. Most people want the market to go back to that 14,000 level, but what they forgot was that 14,000 point level was caused by the housing bubble,the mortgage crisis, and stocks being overvalued for what they were really worth. We still have months to go and with the way the "big boys" are handling this situation, it's going to be long uncertain months. Just my .02

 

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[hatterasguy]

I wouldn't say its over but things are certianly starting to get a bit better.

Man some of you guys are starting to sound like a broken record. Stop listening to Peter Schiff he has been predicting the end of the world for years. If you predict snow every day eventualy your going to be right. It will make you depressed. The world is not ending, the US isn't going anywhere, and the markets are not falling apart.

 

[ramy98]

I am a card carrying member of "We havent seen anything yet" club.

 

[hatterasguy]

I beleive things are getting better.

 

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[imcmillionaire]

The recession is a state of mind people. Its only in the minds of those who chose to feel lack in this life of abundance. Be grateful for what you have within your realities as of this moment and countless more blessing will beseech your existence.

 

[Runum]

Disagree. Tell the 20% of unemployed and underemployed people in this country that it's just a state of mind. What JScott said is true and each cycle will result in a lower income and standard of living for the working people with jobs. I am taking care of myself as are others here. The challenge lies, for us, that these are our customers. If they make less money then they have less to spend. I'm not being parinoid or negative. I am looking at facts and trends.

 

[Runum]

Jason, sometimes you can say more with less. Thanks for your restraint.:cheers:

 

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[HCBailly]

I’m not even close to an economic expert, so maybe take what I have to say with a grain of salt. I think the people that are saying that the recession is over are basing it on two things:

1) The rate at which damage is being done has significantly slowed down. I would measure that by the rate at which jobs are being lost, but you could also measure that by consumer spending or other economic indicators. From what I’ve heard, every past recession has ultimately turned around for a significant period of time after seeing the same decline in the rate of damage.

2) People want to hear that the recession is over. Under normal conditions, hearing about someone else’s bad news makes most people feel better about their own condition. However, things have been so bad for so long, hearing more bad news is making them feel fearful to spend.

That said, the jobs are still gone. People cannot spend money if they have no income and no credit. Also, people are savings more than ever. Why? Part of it is fear of losing their job.

More than that, I would say that people are saving because of the massive evaporation of wealth. Most people based their wealth on their stock portfolio and home equity. That money is gone and it’s not coming back anytime soon. Even if the jobs started coming back, I’d say it’s going to be a long time before people have recouped the loss of their wealth.

In any case, even when things do improve, the underlying reasons for the collapse of the economy have not been resolved, or even addressed. I don’t want to get political here, but there’s way more to why the economy collapsed than a bunch of greedy bankers, investors, and CEOs. Until those issues are dealt with, there will be another bubble, another burst, and so on and so forth. Since we all know those issues are not going to be challenged, all we can do is ride the bubble, then manage the burst as best we can.

In any case, I consider my carpet cleaning business to be a pretty good indicator of how the economy is doing. Since being in business in 2007, I’ve only had two months under budget: January/February 2009. Since then, I’ve met my budget every month, though I haven’t made any significant profits either. I’d say things have stabilized, but the effects of the recession are far far from over.

 

[PaulRobert]

Another interesting article-

Experts: Consumers Should Stay on the Sidelines - FOXBusiness.com

My favorite line “The key takeaway on the retail spending number is the old rule, which is: One month does not make a trend.â€

 

[MJ DeMarco]

The recession isn't over ... I can only laugh when I hear those reports because the data they're using is just another form of funny accounting ... the same funny accounting that brought us every boom and bust in the last 15 years.

The recession is the new normal and to escape the "new normal" the pundits and experts have to convince you that its over so you'll go out and spend and borrow.

Those same people told you that the housing boom had legs left when in fact the legs were gone. Those some people told you that the March 2000 tech pull back was an anomaly and Dow 20,000 was a certainty. Those same people told you that unemployment won't move above 8% and now its at 10 and in some places 12.

How long are people going to follow the prognostications of "those people" when those people don't have a vested interest in the truth?

A plastic surgeon is going to tell me I need work. A personal trainer is going to tell me I need to shape up. A maid is going to tell me I need my house cleaned. A chiropractor is going to tell me my back needs an adjustment. They will tell you what supports their bottomline.

 

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[Runum]

The recession is a state of mind people. Its only in the minds of those who chose to feel lack in this life of abundance. Be grateful for what you have within your realities as of this moment and countless more blessing will beseech your existence.

imcmillionaire I do understand where you are coming from though. For us, we have to maintain focus. When all this crap started hitting the fan most people's first instinct is to run around like chicken little. This was discussed at length last fall. We all understand bad stuff is happening but the difference on this forum is that we do look for opportunities to turn the negatives into positives. We are all trying to keep our focus on the right things. However, one cannot simply ignore nor minimize how this downturn has impacted families that rely only on their paychecks from their jobs.:cheers:

 

[hatterasguy]

Meh all I know is that in my little area of the world property prices are starting to firm up a bit. The market is starting to return to a more normal market and people are starting to make money again.

 

[hatterasguy]

The recession is a state of mind people. Its only in the minds of those who chose to feel lack in this life of abundance. Be grateful for what you have within your realities as of this moment and countless more blessing will beseech your existence.

I don't know... if I lost my job and I had a mortgage, a car payment, and 3 kids counting on me...I think thats a bit more than a state of mind. Kids can't eat state of mind, nor will the bank accept that as legal tender to cover the mortgage.

 

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[hakrjak]

Most of things getting better is a complete facade... Some people have mentioned how things got better in 2003....

The only thing that got better in 2003 is that the bleeding stopped.... We never recouped the salaries we were making in 2001-2002, and we never recouped the job creation that was happening during that period of time.

Things are not getting better now... the only thing that is happening is the bleeding is starting to slow down a bit... People are still earning way less, if they even have jobs at this point.... There is no huge growth industry to take the place of battered Technology or Finance, or Real Estate.

To those who think things are getting better --- What is the next "big thing" that is taking off right now??

Cheers,

- Hakrjak

 

[maximus20895]

Better is a vague term here. Even if the "bleeding" is slowing down that is "better" in some peoples minds.

I do agree w/ the other comments, but I also agree that it's starting to make a turn for the "better".

 

[Kung Fu Steve]

I'm beginning to think that the economy is violently pushing people into being entrepreneurs (such as has been most of the history of the world). The idea of a "job" just isn't coming to fruition like people thought. But now it's so ingrained into people's minds that we must have jobs around.

People need to get back to working. Unfortunately the days of sitting behind a desk on face book on someone else's dime is coming to a quick and brutal end.

 

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[ramy98]

Central Banks all around the world are adding liquidity to the markets.. Through all these stimulus bills/ bailouts... It shouldnt be surprising to see these actions showing positive effects... They are short term effects.. Just like giving someone with aids a few pills; sure the pills will work for a while but eventually the patient isnt going to make it... And thats where we are at... I just dont see how "quantitative easing" will help anyone.... Its just going to make the problem worse... Just my opinion....

 

[GlobalWealth]

Just because Bernanke gets on TV and says the economy is improving doesn't make it so. If I get on TV and tell everyone Toyota is giving away free cars, I doubt you would get a dealer to give you one. Bernanke is doing his job. He was appointed by the Obama administration and they need the economy to get better to secure public and opinion and votes in 2012. Sure, things may be getting slightly less bad but look at the facts.

Corporate profits are down significantly. The only companies with improved profits are the ones that have significantly cut expenses like payroll and the companies that are on govt life support. Housing may be up, but why is it up? For one, housing sales always increase in the summer and two, housing prices are 30%+ down which is fueling sales. Add that to more governemnt spending with the $8000 tax credit and there was no other option but for housing sales to increase. Cash for clunkers was the sole driver of retail sales improvment over the last quarter and that was also fueled by government funds (taxes). All that did was take auto sales away from the next 4 quarters. Instead of letting the market stabilize, the govt stepped in and screwed up the market price of cars. Now auto makers are scrambling to manufacture new cars, but the sales are going to be significantly down and inventories will be up. Unemployment is a tricky number too. We are sitting at about 10% as reported, but reported numbers aren't the true numbers. This only measures the number of people actively seeking jobs but not employed. You must first be in the work force, over 18 and not retired. You must be seeking work and/or filing and receiving unemployment. If you have exhausted unemployment benefits, you are no longer part of that measured number. How many people do you think have exhausted benefits and are no longer seeking work? There are about 300m people in the US and only about half are considered in the workforce. The consensus is that about 15% are truly unemployed so that leaves about 22m people unemployed. With the unemployment where it is, retail sales are falling and going to get worse which means commercial real estate is in serious trouble too.

Now all of that sounds like gloom and doom, and to some extent it is. Personally I think the US is on a path that it is not able to correct. But when there is turmoil, there is opportunity. Someone posted something on here about a surge of entrepreneurship. This is the salvation of our country. I think with the tax rate we currently pay and the impending increase of taxation, there will be a significant black market much like in Russia in the '90s and early '00's. Is that right? Wrong? I'm not one to judge that, but I feel it is going to happen. Productive people will always find ways to get ahead. I think the current economic crisis is going to show the cream rising to the top. There will also be huge opportunity in many sectors of the economy. Entrepreneurs will be the ones who take advantage of the opportunities because we are the ones that can see opportunity where others see roadblocks.

Just keep your eyes and ears open and take advantage where you see the chance. Entrepreneurs are the future.

 

[camski]

What most people forget is what a recession is truly defined as. It is defined as a decline in GDP for two or more consecutive quarters. So if we finally have a quarter of non declining GDP (propped up by massive govt programs ie cash for clunkers, first time homebuyer rebates)you could in essence say that the recession is over. Now I admittedly dont know what the technical term would be for an economy that rises one quarter and then resumes decline. My personal opinion is that the hard tiems are long from over and that this brief feeling of improvement is more smoke, mirrors and major deficit spending than any real improvement.

 

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[theBiz]

How could it be over, the president is putting us in more and more debt everyday, even if things go back up you are not going to keep the profits of your labor, someone has to pay back that debt, its going to be the people making money. Everyone should know, even if things are getting better it will never really be a fix, it is going to get better, really bad again then things will get fixed after that. EVERYTHING has cycles. Economies once rising, eventually have to fall, you have a big spike, you will have a big decline. As far as unemployment, until that gets alot better i would not be buying rare sports cars, because no one is safe, if no one has a job, no one can prosper in business or investments. People look at economics too complicated, just use common sense, look at our position, how could things get better right now?

As far as cash for clunkers, what a joke. Why would you give our U.S. dollars to overseas companies, he should have gave intensive to buy only U.S made cars, but yet will stimulated overseas car makers...yeah real smart. North Korea is pissed, we just pissed of China with importing their tires, who of coarse are allies, government is now taxing smog on US manufacturing companies, trying to nationalize health care.... were all in trouble.
The world is getting too complicated, there is a big change going on right now, and its not for the better of the future.

 

[MJ DeMarco]

Bernanke is doing his job. He was appointed by the Obama administration and they need the economy to get better to secure public and opinion and votes in 2012.

Uhh ... while I agree with parts of your take, Ben Bernake was appointed by Bush, not Obama. You might have confused him with Geithner, the Treasury Secretary.

Central Banks all around the world are adding liquidity to the markets.. Through all these stimulus bills/ bailouts... It shouldnt be surprising to see these actions showing positive effects... They are short term effects.. Just like giving someone with aids a few pills; sure the pills will work for a while but eventually the patient isnt going to make it... And thats where we are at... I just dont see how "quantitative easing" will help anyone.... Its just going to make the problem worse... Just my opinion....

Ahh yes, funny accounting.

 

[crystite]

Ok I guess one of the first things to bear in mind when using this forum, is to copy your posts before posting. I just wrote up something, hit submit and got a no response page. So went back hoping my text would still be there to resend, but it wasn't.

Anyway, I was saying that I follow Peter Schiff and Harry S Dent. Both expect things to get much worse. Dent posted an updated recently to his book, The Great Depression Ahead, where he expects that this is the time to get out of stocks, as things will go downhill from here. He anticipated the depression should be realise sometime between the end of this year and sometime next year. In his book, he had expected it would be by the end of this year. He also predicted the current seeming turn around.

Crystite

 

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[GlobalWealth]

Uhh ... while I agree with parts of your take, Ben Bernake was appointed by Bush, not Obama. You might have confused him with Geithner, the Treasury Secretary.

I am certainly not pro-Bush and you are correct. I was actually thinking about his recent re-appointment however.

 

[PaulRobert]

And I have another article to contribute. This time it goes with the same scenario as last year, stocks are overvalued.

Rosenberg Says Stocks Overvalued After Six-Month Rise (Update1) - Bloomberg.com