Boomer Woman Blog: economic downturn

Showing posts with label economic downturn. Show all posts

23 July 2010

Recessing: Try India

And we learn from the young. Travels and Investigations has several topics but the central piece is the author's reason for living in India. With no job prospects in the U.S., the new college grad returned to the site of his semester abroad and found room and board provided for work as a translator and copyeditor. He lives on about $10 cash per week, less than his family would spend on him if he were still in the states, job-seeking.

Within my circle, I regularly point to The Sociologist's offspring, who made similar travels on next-to-zero dollars when jobs were not plentiful when they graduated college. A relative went to Americorps after a lay-off. And another relative is taking a leap of faith in leaving a frustrating job even if it means taking a so-called "lesser" position in the same field. These are the decisions of young people who look around, wonder if there's a better way to spend their day, and then strike out on a new adventure.

I wouldn't call the process opting-out (exactly) but it does require an understanding that the individual cannot control societal circumstances. We humans have a tendency to take responsibility for tough times. The lay-off is experienced as personal failure. The lack of job offers represents not being good enough. It doesn't take much observation to realize that the job market is more than just difficult, and that the individual job-seeker is not responsible for the mess. But when you're the unemployed one, it can be hard to get to that realization.

As the economic downturn has played out, more of the unemployed are getting the message. Trying harder won't produce a job. Every other job applicant is trying harder, too. That leads to other realizations and lots of depression, of course. But we can appreciate the young (and probably some old, too) taking advantage of their mobile opportunities. Not a bad way to spend the Great Recession.

© 2010 Mary Bold, PhD, CFLE. The content of this blog or related web sites created by Mary Bold (http://www.marybold.com/, http://www.boldproductions.com/, College Intern Blog) is not under any circumstances to be regarded as professional, legal, financial, or medical advice. Or education advice. Or marital advice. Or even a tip.

20 April 2009

Disappearing Brands in the Great Recession

We can/should distrust too many economic predictions especially seeing as how our own investment advisers didn't see the Great Recession coming. Still, when it comes to seeing a list of brands predicted to disappear, I'm drawn to it.

The current list comes from 24/7wallst.com and it covers 12 brands across several categories of goods. Auto, no surprise. Mid-scale clothing stores, um, little surprise. Airlines, well, logical but still a surprise probably because planes are so big and when we are in them we put our trust in them. It's then unbelievable to think something we put trust in (with our lives, after all) cannot stay in business. Purely psychological, of course.

The list is called Twelve Major Brands That Will Disappear.

© 2009 Mary Bold, PhD, CFLE. The content of this blog or related web sites created by Mary Bold (www.marybold.com, www.boldproductions.com, College Intern Blog) is not under any circumstances to be regarded as professional, legal, financial, or medical advice. Or education advice. Or marital advice. Or even a tip.

22 March 2009

Generational Views on "Be the Best Employee"

About every other cable news show includes a segment on how to weather the economic downturn. The advice is pretty standard: be the best employee in your company. Work harder, faster, and longer than everyone else. Make yourself layoff-proof.

I imagine most baby boomers react the same way I do. We know that layoffs are based on many things besides rankings. First, there's the impact your missing salary will have on the budget. Then, there's the economic outlook and how needed your position is in the short-, mid-, and long-term. Finally, there's the question of how dispensable your position is and how well-suited it may be to outsourcing. Notice we haven't yet begun to address how well you do your job.

Last month, I came to realize that a person of a different generation has a different reaction to the be the best employee segments. I was in a planning session that a Gen Y worker had asked to attend. He was volunteering to put in extra time at work to help with a project. I commented to him that he was really going the extra mile. He answered, "I want to keep my job."

I didn't contradict. I just said, "Good for you."

18 March 2009

The paper is closing, the sky is falling

Or not. Newspapers are closing and it's easy to fall into, what we call in the trade, decline theorist orientation. That's the impulse and habit to exclaim that the sky is falling, society is going to hell in a handbasket, or people just plain aren't behaving.

The other perspective is called normative-adaptive orientation, whereby we observe societal change and correctly identify how humans and their environments influence each other. The transitions that emerge from that interaction are sometimes awkward. The eventual results are almost always benign. (Notice how I'm not predicting, promoting, or defending "progress.")

This matter of newspapers closing is not so different from the American car industry. (The trend away from print has been obvious for years.) Time to change. But it's much easier to defend the noble pursuit of truth through journalism than the ignoble pursuit of an SUV with a 8-cylinder engine.

And so, last month in San Francisco, at dinner with 4 GenXers, I held my tongue as they tsk-tsk-ed the possibility of the closing of the Chronicle, which lost $50 million last year and may lose even more this year. Well, I used to live in California and I definitely understand the concept of losing the Chronicle. But an old (very old) part of me returns to the first day of Journalism 101 at Syracuse University in 1970. The professor said, "what's the purpose of the newspaper?" And the answers were all that you would expect, including that truth thing. And then the professor chuckled and said, "it's an old joke but it's real: the purpose of the newspaper is to sell the advertising."

Oh, yeah. It's a business. And when a business trend meets an economic downturn, you're going to see change. I appreciate that a reporter facing a lay-off doesn't care a whit about my normative-adapative orientation.

07 March 2009

COP on the job: TARP Transactions

If you've been hanging around the cable news shows, you've heard Elizabeth Warren on her COP job: oversight of the TARP dollars, which essentially means oversight of Treasury. About a month ago, she spoke to Congress as well as many interviewers about the value of the Treasury Department's acquisitions using federal money.

In a short 6-minute-19-second video, she captures the main points (rather, questions) that the Congressional Oversight Panel has about those acquisitions. Even though the video is focused on questions, not answers, I recommend it. Warren is a professor accustomed to teaching; the message is clear and understandable. Her hand gestures in the above screen capture happen to be part of the message: price Treasury paid for assets versus value of said assets.

04 March 2009

More Value at Your Fast Food Restaurant

Actually, this blog is more about retreat. We wondered how fast food restaurants could afford to discount food although we understood the purpose. Keep us in the fast food habit, even in tough economic times.

Sonic is keeping its Happy Hour but, at least in my neighborhood, retreating on some other promotions. Of interest, the notice of the change begins with Sorry for the inconvenience, but due to rising food cost, our happy hour, and the addition of the new dollar menu, we are no longer accepting....

Kentucky Fried Chicken found reason to join the dollar menu crowd but with a bit of self-protection. The Ultimate Value Menu features 10 items that begin at 99¢. That causes a let-down for the value meal seeker. Enough so that a friend actually called me to report this menu as not worth the drive-through.

And the retreat that made the news in my town (yes, the news) was a local Quizno's that stopped honoring the free sub intended to be part of the Million Subs Giveaway. This would be akin to Denny's give-away last month of the Original Grand Slam Breakfast during an 8-hour period. The Denny's promotion was a marketing success: the restaurant made Google's top 40 searches list and Twitter's top spots at #1 and #7.

The lessons might be: set your give-aways for a limited time that all your stores can tolerate, sell something for less than a dollar and don't try to lead the customer to slightly higher prices on the same promotional menu, and offer only dollar items that you can maintain for a long while. If the purpose is to maintain the loyal base, hunker down with your customers for the duration.

Actually, I wouldn't mind a Recovery Menu. Maybe tie it to the market. But not yet.

03 March 2009

View from 22D, and E, and F

View from my seats, plural because I had three seats on my flight, for the second time in five days. The seating behind me was even more sparse but also darker and it didn't photograph so well.

From Dallas to San Francisco, I was on a Tuesday evening flight at 7:30pm. I considered the wide open seating a delightful gift from the skies.

From San Francisco to Dallas, I expected some empty seats because that's sometimes what a Saturday afternoon flight affords. But I was still surprised at the number of empties.

Both directions, first class was full. I usually prefer first class. Not this week. But that's my selfish comment about having elbow room on a plane. From the perspective of the national economy, I'm not really rooting for elbow room.

26 February 2009

Recession Busters! Marketing!

The "recession" is making its way onto sale signs.

This one is called Recession Busters!

The sign is for discounted t-shirts.

The location in Terminal C, DFW Airport.

During my observation over an hour's time, no customers entered the shop. Overall, the airport crowd was light. And on my flight, I had 3 seats to myself.

11 February 2009

Tech Sector Lay-offs

Lay-offs in the technology sector are tracked graphically at TechCrunch Layoff Tracker.

TechCrunch (the sponsoring web site) describes itself as "obsessively profiling" new Internet products. (So, profiling the tech sector is not its usual fare.) I enjoyed reading through the Archives, especially the 2005 entries exploring a new proposition called Web 2.0 with considerable attention to the new vocabulary developing around it.

10 February 2009

On hold: recovery.gov

We're on hold. Click http://recovery.gov and set a bookmark in your browser. Eventually a bill will pass and you'll want to look in on this promised transparent view of how the stimulus package is put to work.

In the meantime, refer to Robert Reich's blog (February 9 entry) for his explanation as to why we're on hold.

02 February 2009

Finding Humor in the Mini Depression

Rick Moranis' Dialing for Derivatives op-ed column in The NY Times (yesterday) is a great way to start the week. I promise.

LOLFed - Troubled Asset Ridicule Program is harder to read but highly reflective of a mood for laughing out loud (LOL), for which it is named. I don't read beyond the text on the photographs, frankly.

The Onion. An acquired taste, this onion-y view of life can skewer any topic, which can bring much laughter. But if you've been touched by suicide, for example, you may not care for The Onion's mock reporting on the suicide note that came in the form of a 48-slide PowerPoint presentation. (I guess my favorite part of the story is, Copywriter Gita Pruriyaran said the presentation "had room for improvement.") My son introduced me to The Onion when he was a teenager and I saw it as insight into his adolescent development. I have since come to admire the satire.

Learning to love The Onion reminds me of my adaptation to David Letterman. As a young woman, I cringed at what I considered his meanness and mocking. And then I grew more cynical and Letterman grew more circumspect. Or I just got used to him.

30 January 2009

Downsizing and the Dirty Dozen

Last weekend I flew out to California for a one-day conference just to sit in the audience (as opposed to serving as a presenter, which will be my reason for flying to California for a one-day conference next month).

I'll comment another day about what possessed me go to L.A. for 48 hours. Today, I want to relate one aspect of the conference day: the presence of 3 b-school speakers. Who would have known that university business schools are into positive psychology?

Kit Cameron of the U of Michigan was one of those speakers and he related some of his older research, suddenly pertinent to the current Mini Depression. Cameron and colleagues used to study downsizing companies, especially those caught by unexpected shrinking markets. The current round of lay-offs in the U.S. qualifies for Cameron's description.

Shorthand version: most downsizing companies don't go about the process in ways constructive or respectful. Negative attributes emerge, what Cameron called the "dirty dozen."

1 - Centralization
2 - Crisis mentality
3 - Loss of innovativeness
4 - Resistance to change
5 - Decreasing morale
6 - Politicized special interest groups
7 - Non-prioritized cutbacks
8 - Loss of trust
9 - Increasing conflict
10 - Restricted communication
11 - Lack of teamwork
12 - Lack of leadership

Companies that take the time to counteract these tendencies can instead involve as many stakeholders as possible in strategizing how to downsize. Those companies can produce a better outcome, if not for all the work force, at least for some.

The stats from the Cameron studies are not encouraging: 80% of downsizing companies deteriorate. The much smaller group of 20% come out of the process stronger and eventually profitable again.

Cameron still cites the dirty dozen but takes a different approach to the study of business today, relying on POS, or Positive Organizational Scholarship. And that's the name of the research Center for POS at the Ross School of Business, U of Michigan.

29 January 2009

Names Matter, even for economic downturns

What we call a circumstance frames our response to it. Yes?

Robert Reich uses the term Mini Depression in his blog.

A website opines on styles of economists with this long blog name: Great Recession because it's not a depression. yet.

The lower-case approach is deep recession or economic downturn. Those are terms I have used pretty consistently but am ready to abandon. They do not reflect the toll on the people who are losing their jobs and their sense of security for health and wealth.

I don't care for the Great Recession because it sounds too clever. I want an authentic name, fully aware that the best descriptor may emerge a few years from now.

Bloomberg.com reports that the White House doesn't want to risk what may emerge as The Descriptor. The media types have run focus groups to find out what vocabulary will attract support from the populace. What's being touted for now? Recovery instead of recession. Investment instead of infrastructure.

22 January 2009

Where to Learn about the Bad Bank Proposal

I cannot think any of us has time to read a blog of the president's day, every day. But the fact that one was compiled yesterday says a lot about the Internet, the country's interest in the new administration, and our desire for news.

For more concrete information, the White House web site is a starting point. The Briefing Room is starting to fill with Executive Orders and Proclamations. The first ones address transparency and ethics. (Always a good start.)

But we're still waiting for the strategies—the subjects of the closed meetings at the White House this week. To fill in the blanks with expert commentary, Robert Reich's blog provides. My recommendation, turn to Reich for the best explanation of the Bad Bank proposal. You'll want to scroll back to his January 18 blog to capture it all.

05 January 2009

Economic Indicator: the Mailbox

I was certain that I received less mail in the months of November and December. Short of counting pieces, which would be counterproductive to the enjoyment of spending less time sorting mail, I just made a mental note to check it out after the holidays.

I was right. Mail was down. Fewer catalogs—that was the first observation. And fewer credit card offers—it took a while to realize that one.

Year-end news reports made clear that credit card companies were changing their practices. Some people saw their credit limits lowered. Some saw their rates go up. And a smaller number of consumers saw the next painful result: lowered credit scores.

If you aren't carrying a balance, you just take in those news stories. Hmmm. Yep. Tough times ahead for anyone living on their credit cards. Likely to get worse as more people face layoffs. Hmmm. Yep.

So, the direct impact doesn't reach you until you notice you're receiving fewer credit card offers in your mailbox. What's wrong with that impact? That should be good news, right?

No. There is no good news in the current economic downturn. A decrease in junk mail, unfortunately, is bad news.

Credit card companies (including the ones turning into bank-holding companies in order to apply for federal bail-outs) are expecting increased charge-offs in 2009. That's not a word we're accustomed to hearing because a charge-off is an expected part of the credit card business. It's the amont of bad debt that a company writes off every year. If you were a credit card company (or any business relying on humans making monetary payments) you would expect to see several percentage points a year labeled as charge-off, loss, etc.

But you probably wouldn't be prepared for a double-digit percentage. And that's a possibility in the near future. Current charge-offs are around 5.5%, which sounds OK compared to the 7.9% level in 2001. The problem is that the average for the past 10 years was 5%, so high charge-offs in 2001 were countered by much lower charge-offs in other years. And other economic indicators (layoffs, foreclosures) are much more dramatic now than in 2001.

We can hope that the dire predictions for 10% charge-offs are wrong. Not so much because we care for the credit card companies' profits as because we know what that double-digit percentage would represent in terms of consumers' need to use their cards for staples, not luxuries.

From the movies: If you are old enough to remember Kramer vs Kramer (1979), you can correct me if I have mis-remembered the protagonist's use of a department store credit card to buy food for supper. I'm thinking of Dustin Hoffman's character. The cocktail-party-style foodstuffs provided sustenance for the man and his son when cash was short. (If you remember all this, you are also old enough to remember the first time your local grocery store accepted credit cards. And then your movie theatre. And then your fast-food drive-through.)

© 2008 Mary Bold, PhD, CFLE. The content of this blog or related web sites created by Mary Bold (www.marybold.com, www.boldproductions.com, College Intern Blog) is not under any circumstances to be regarded as professional, legal, financial, or medical advice. Or education advice. Or marital advice. Or even a tip.

03 January 2009

Rumors of Stores Closing: Not All True

There's a nice sense of relief when rumors of economic ruin can be denied—thanks to Snopes.com's "Store Closings" report. In Snope.com's words, email reports on chain store woes were a "mixture of accurate, inaccurate, and outdated information."

For fastest reading (and most accurate information), scroll to about the half-way point on the web page. That's where the accurate reporting on chain stores begins. (Snopes.com investigates rumors and reports on their accuracy as well as explains the how and the why behind the rumors' spreading in the first place.)

We'll probably have more such misinformation to sift through in 2009. I am struck by how much of the information was based on partial fact (yes, Pep Boys did make store closings) but mainly suffered from outdated data. So, the claim that Pep Boys would close all stores by December 2008 was a wild exageration of what really happened. The chain closed 31 underperforming outlets at the end of 2007. And the important missing context? Those 31 represented a fraction of the chain's 600 stores.

No guarantees for Pep Boys or any other chain as the recession deepens—and maybe it takes a year to get the whole story—but it's nice to see the rumors proven wrong.

04 December 2008

Our Egalitarian Society & the Economic Down-turn

No, I'm not going to propose that we are all equal in our circumstances caused by the economic down-turn (AKA recession). But our egalitarian society is at play in responsibility for certain next choices.

In the olden days (I am certain this was as short as a decade ago), we were assured that financial advisers could guide us well and that we were not expected to be able to analyze markets, project long-term needs, and so forth. So, regardless of whether you took that to mean you should follow advice to invest in stocks, buy bonds, or buy an annuity, you probably nodded agreeably to other (sure) things: your employer's retirement plan and the offer of a long-term care insurance policy.

Well, times have changed.

This week, a Wall Street Journal article* reported on a change in Conseco's long-term care insurance policies that may increase premiums for the customers and even reduce their benefits in the future. The change is intended to "cast off" a losing proposition for the company as the policies are transferred to an independent trust that will handle claims as it can based on $175 million current capital. The 140,000 policy holders may or may not be well served—only time will tell. But the fact that new policies haven't been sold since 2003 suggests that Conseco predicted bad times ahead for long-term care policies.

Here's my point on our egalitarian society: the WSJ article advises that new buyers should "take particular care in picking out a financially stable insurer."

A recent conversation with a friend in Colorado underscores the power of that advisory: "Our financial guy says we need to decide about keeping Jeffrey's retirement account with the company or cashing out now. He said we have to think about whether the company will be around in 8 years to pay out the money. I told him I thought he was supposed to know. And he said, no, it's up to us to make that assessment."

Well, as I said, times have changed. Experts aren't even claiming their expert status anymore, or at least they don't want to shoulder the responsibility of analysis. And in an egalitarian society, after all, we are all equally able to make the analysis. There's the rub. It just may be that we really are equally able.

* McQueen, M. P., (2008, December 3). "Insurer Casts Off Long-Term-Care Policies," Wall Street Journal.

29 November 2008

Online Shopping in the Economic Downturn

I went to the mall for Black Friday and picked up a couple of gifts but decided to do the rest of my shopping online. That's not so unusual (for me or for the country). News stories about Black Friday and the economy in general are concluding that (a) even with economy slowing, Americans are optimistic and want to keep the holiday as normal as possible, (b) they need/want to save money this season, and (c) they are turning to online outlets to accomplish it.

My usual starting points for online shopping are:
Shopzilla.com
Overstock.com
Half.com

Typically, I follow the links to stores from Shopzilla and rely on the "ratings" of the store provided at the Shopzilla site. For technology purchases, I always include a comparison with thenerds.net (even if that store doesn't pop up in a Shopzilla search).

And then there are the couponing sites. I have joined and quit two, learning that I am not dedicated enough to work the links. But I do check the coupon sites listed below for the leading coupons and codes for products I'm researching.

A dedicated online couponer is on these sites regularly, as a member and even as a contributor to some of them. You have to figure out the trade-off of time investment and cost savings. The additional crucial factor is the number of purchases you are making regularly. When I shopped for a household of four, I used paper coupons for groceries. As a baby boomer now shopping as little as possible, I literally do not have as many purchases to make.

YAHOO! DEALS is a shopping site with tabs for Coupons, Storewide Sales, and Weekly Ads. The site is easy to read, and especially easy to spot expiration dates. The Coupons page has an important feature in upper right-hand corner: ability to sort the coupons by Latest, Most Popular, and Expiring Soon.

Dealcatcher also presents a streamlined page for easy scanning. The Coupons tab includes links at top for Popular, New, and Expiring Coupons. I found the link for List Stores a helpful one. The site also offers deal alerts by email and RSS feed but I haven't used those.

Probably one of the most-often linked sites is Retailmenot. The web site offers a weekly email newsletter plus a Firefox extension for your browser that posts alerts about new coupons. Again, too much connection for me! But I do like the user comments on the coupon codes.

24 November 2008

Green Cheese in the Economic Downturn

Green collar jobs are promised and that means relief for unemployed Americans, with the usual delays between intention and implementation. For a short and informal analysis of the green (eco-friendly) aspects of the bailout, see Jon Pophma's Green Pork: The Kind We Like (from October 2008). Obama has indicated a commitment to job creation that goes beyond what campaigns thought would be needed just a few months ago—and with emphasis on green.

Who can go after those jobs? The folks who will be available a year or two from now, of course. But an important consideration will be the willingness of the unemployed to join those industries, giving up strong affinity with the industries they have left. Most baby boomers have formed an identity with career or company, and that's what makes lay-offs so traumatic and re-employment sometimes delayed. It's too easy to say, "If they want a job, they'll adjust."

I like Spencer Johnson's explanation of change models. His 1998 book Who Moved My Cheese? was popular for years (and is still available) and doesn't dismiss out of hand the difficulty some people have accepting change. The book's characters (mice) respond to change (cheese that has been moved by forces beyond mouse control) in ways that are suspiciously human (ranging from denial to resistance to acceptance).

For the unemployed who can overcome resistance to changing industries, there may be a green Christmas...in a year or two.

Who Moved My Cheese?: An Amazing Way to Deal with Change in Your Work and in Your Life

22 November 2008

Market Rally Aside... Aisles are Empty

News of a market rally was welcome yesterday but in early evening I had this stark view of a super store. I was there to pick up solar Christmas lights. About three couples my age were there picking up similarly small packages. It was a sober reminder that a little Wall Street news is just... a little news.

On a brighter note, my bookstore was bustling. I located two copies of The House at Sugar Beach and enjoyed huge savings thanks to coupons that landed in my email Inbox the day before. The clerk commented, "You have them, too! I've been getting these all day."

Now, here's my own testimony: these were the first emailed coupons I have ever printed out and taken to a store. That says a lot about baby boomers' reaction to the current economic climate, and also a little something about how retailers can stimulate sales in the near future.