Payday loans help people from all walks of life to absorb the budget shocks that emergencies can create. Yet even short-term scenarios like these become increasingly difficult to swallow during a deep recession. This raises a question that’s on the minds of many Americans: “When is this going to end?”
To find an expert’s opinion on the matter, Jennifer Schonberger of The Motley Fool recently interviewed Liz Ann Sonders, chief investment strategist with Charles Schwab. According to Sonders, we’re more than halfway there.
And the worst part is now
Sonders’ best guess is that
Sometime in the third quarter of 2009, we’ll get the official word that it’s over — now keep in mind, given that it took the NBER [National Bureau of Economic Research] a year to tell us we were in one. The normal span of time between when recessions have ended historically, and when they’re declared in the end, has been 15 months. So if I’m right about the third quarter of 2009, we’ll probably get the word on that some time in 2010.
But right now America is at the bottom of the pit. Corporate inventories are going up because nobody is buying. Consumers are saving for a perpetual rainy day, but even then they’ll look to cash advance loans for added help. Unpurchased inventory stockpiles has caused an artificial inflation of the gross domestic product, making appear better than was expected.
What must still happen?
Fallout from that, Sonders feels, will cause first quarter 2009 readings to be dismal. Then the news will “become progressively less sad.” Since there has been relative calm following a volatile fourth quarter 2008 – largely because President Obama’s economic stimulus is about to go into effect – credit markets are beginning to become more fluid again.
Despite continued volatility in 2009, Sonders sees the stock market rising. But if that rise is to be meaningful, the $9.2 trillion in cash “sitting in nothing but short-term, safe investments like Treasuries, bank and savings accounts and money market funds” must move. It must flow. Since depressed asset prices are low, Sonders says that for some, it is time to buy.
However, she advises that all should assess how much risk their willing to tolerate. “If you’re now way under an asset band of, let’s say equities, and your circumstances haven’t changed, and your time horizon hasn’t changed, then absolutely you should be thinking of putting some money back in.” However, if a consumer already has significant money in stocks, an explosion of increased investment is discouraged.
Payday loans: your bridge to recession’s end?
While they are not a long-term solution to larger financial issues, payday loans can certainly be the right tool at the right time for your budget. Just the boost you need? Perhaps. During this recession and beyond, it always pays to shop around. If you need emergency cash fast and crave convenience and discretion, payday loans may be what you seek.
Related articles
- Rally Attempt Ends, NBER Makes It Official (chrisco.wordpress.com)
- The Deepest Downturns (usnews.com)
- R-word sends markets into dive (thestar.com)
Sometimes when things become a little tough, we do things without too much thought. Usually because we want to put the tough thing behind us and move on. This can result in jumping in on payday loans and regretting it later. Payday loans aren’t all that evil as long as you know what you’re getting into and you take some time thinking about actually doing it and how you’ll later terminate the loan.
I hope they will have a better handle on how the money will be spent. The last time it was ised to line the pockets of so many ceo’s etc, what a mess.
I sure hope she’s right, because the sooner we can get this business over with the better for everyone. The sooner we can get more people working again, the better off the economy will get, just as long as sufficient changes are brought about to ensure that what happened won’t be happening again.
Good news is always welcome.