Stock in pawnbrokers is increasing as the recession continues. Image: Pink Moose/Flickr/CC BY

As the recession continues, stock is rising in industries that profit from hard times. Pawn brokers, payday lenders, debt collectors and discount stores are more profitable than ever. Brokers are recommending buying stock in these sorts of companies rather than traditionally higher-end investments.

Recession continues as employment falls

The unemployment rate rose to 9.2 percent in June, making many stocks plummet. The number of people living below the poverty line has risen to one in seven, the highest since 1994. Consumer spending has dropped for two months in a row. Times are hard, and nobody knows if or when they will get better.

Profiting from hard times

Some industries profit from bad times. Stocks for many pawnbrokers, payday lenders, discount stores and debt collectors are on the rise. And while that may raise ethical issues for some, stock brokers are recommending buying stocks from many of these companies.

David Rosenberg, an economist at the money management firm Gluskin Sheff, said, “People are broke. They’re all chasing value. It’s a seismic shift in mindset.”

Pawnbrokers and payday lenders on the rise

John Coffey Jr., an analyst with Sterne, issued a report in June urging stock buyers to seek out Ezcorp (EZWP), a firm that owns pawn shops and makes payday loans. The stock has gone up an average of 48 percent for the last five years. Coffey argued that the stocks were worth more than than their cost by a third and would most certainly go up. Within a few hours, the stock rose by 7 percent and is now worth double what it was a year ago.

Payday lenders are increasingly becoming a good investment. Advance America Cash Advance Centers (AEA),  has seen the price of its stock double in the last year. Cash America International Inc. (CSH) is up 64 percent from a year ago.

Debt collectors also making a profit

The same holds true for many other companies that thrive on financial hardship. The profits for San Diego based debt collector Encore Capital Group (ECPG) are up 59 percent from last year. This is despite the fact that the company has faced class action lawsuits in many states concerning its debt collection practices.

Some experts disagree

Some experts believe that investing in these kinds of companies is not as safe as it may seem. They say the stocks are as likely to fall as to rise. Should the economy recover and fewer people become financially stressed, stock for these companies will drop drastically. And if the economy should continue to slip, even those companies will find less traffic.

Sources

Huffington Post
Cox

Encore Capital Group

Another casualty of the growth recession. (Photo Credit: CC BY/khteWisconsin/Flickr)

Think it’s time to celebrate economic recovery? Don’t get cocky, suggests Investor’s Business Daily. In this job-starved economy, we’re already living a kind of double-dip recession that economists call a growth recession.

What’s a growth recession?

When economic growth is so low that it creates net unemployment, that’s growth recession. Growth recession can also suggest underachievement, or below-potential growth in such areas as job creation. Job contraction typically means that a country’s real gross domestic product is expanding, but too slowly.

Numbers in a tailspin

Here are just a few of the signs that a growth recession is here, writes Investor’s Business Daily:

• ADP Payroll Services found that 38,000 private-sector jobs were created in May 2011. That’s 100,000 short of the minimum goal economists had marked for economic growth.
• Employment consultant company Challenger, Gray & Christmas noted that 37,135 jobs were cut in May, a 2 percent increase from the previous month.
• U.S. housing prices fell 4.2 percent in the first quarter.
• The Mortgage Bankers Association’s mortgage application index fell 4 percent in May’s final week.
• The Institute for Supply Management’s factory activity index – an indicator of U.S. manufacturing health – dropped from 60.4 in April to 53.5 in May, the lowest score on the index since September 2009.

Re-enter the recession

U.S. gross domestic product growth was reported at 2.7 percent in May, which most economists believe is insufficient to create private sector jobs and beat back unemployment. Match this uninspiring growth with continued frantic borrowing by the U.S. government ($1.5 trillion estimated for 2011), and avoiding a prolonged double-dip recession seems impossible.

According to Michael Pento, senior economist at Euro Pacific Capital, the U.S. is following the wrong formula for economic health.

“Genuine government stimulus comes from low taxes, stable prices, reduced regulation and low debt,” said Pento. “Our economic policymakers have scrupulously avoided such remedies.”

Summer 2011 will bring economic déjà vu , says The Indypendent. The Federal Reserve is backpedaling; spending cuts and tax increases on the city and state level are in progress, and federal spending is pointing downward. Combine everything, and the U.S. will likely face not just a growth recession, but a full-blown return to depression.

Growth recession at teatime

Sources

Growth recession Wiki

The Indypendent

Investor’s Business Daily

Recession curbs teen shopping habits. Image: Paul Keller/Flickr/CC BY

The recession is now being felt even in the youngest demographic of consumers. Teen spending is on the decline, according to the just-released 2011 Teens & Money Survey from Charles Schwab & Co.

Once big spenders feel the pinch

Traditionally, teens ignore economic trends and spend impulsively no matter the pinch on the purse strings at home. However, teen spending is down 14 percent this spring. The impact is significant. As a group, teens spend an average of $125 billion in the U.S. each year.

No budge on home entertainment

Teen spending has dropped in nearly all the markets which they traditionally impact the most: apparel, beauty products and entertainment activities like restaurants, concerts and movies. The only place teens seemed unwilling to cut corners is in home entertainment. Music, DVD and video games rose from 7 percent to 8 percent of teen spending.

A greater awareness

According to the Schwab study, 90 percent of teenagers surveyed said they were affected by the recession. Schwab concludes that they have a heightened awareness of financial issues than they did four years ago. Most said they were more appreciative of the things they have and are less likely to spend impulsively.

The ‘Recession Generation’

Carrie Schwab-Pomerantz, senior vice president of Schwab Community Services, said: “It seems clear that the great recession has changed the mindset of teens. It has given these ‘Recession Generation’ youth(s) a deeper appreciation for what they have and how hard their parents work. This may be the silver lining to the economic downturn.”

Financial education begins at home

“To help quench their thirst for material goods, teens appear to have opened up to the idea that learning about money management is a potential solution to the problem,” said Bryan Sommer, founder of Kids Money Management.

The majority of the teens surveyed cited their parents as their main educators on money matters. Eighty-two percent of surveyed teens say their parents have taught them the basics of financial management.  And 77 percent go so far as to call their parents great financial role models.

Unemployment a factor

Unemployment accounts for some of this trend in teen spending. The teen unemployment rate, at 22 percent, is the lowest it has been in 10 years.

Sources

Newser
Commoncensus
Daily Finance

Every small business owner can employ these tips for surviving the recession doldrums. (Photo Credit: CC BY/Don O'Brien/Flickr)

For many small businesses, layoffs, hiring freezes and elimination of services have been business as usual during the recession. Survival during tight economics times can be difficult, but with some time-tested strategies in place, small business owners can still capitalize. From Smart Biz and About.com Entrepreneurs, here are some small business tips for surviving a recession.

Focus on the strength of your business

When business begins to hit a lull, too many small businesses go into panic mode and try to be all things to all people in order to maintain a customer base. Rather than leaping into new ventures and releasing new products, focus on your strength in order to maintain market share. You carved out your niche by doing what you do best, and a recession is not the time to change that stance.

Think outside the box to find new markets

Thinking outside the box in your search for new places to do business enables you to market your core product to a previously untapped customer base. Even though a small business may have limited cash flow and expenditure allowances, spending a little bit more in order to provide service to an unexplored market niche can be a very worthwhile investment.

Understand your best customer

Even if you know which niche market you want to target, you have to know your specific audience. This is the only way to know what customers need and how your small business can meet those needs better than the competition. As Smart Biz suggests, it could be reduced prices, bundled packages or more one-on-one work with clients. Know what clients want, adapt to their needs and provide strong customers service. Customer loyalty is sure to follow.

Stand out in the crowd

In order to gain an advantage over the competition, it doesn’t pay to merely copy what they’re doing. Through observation, market research and a great deal of determination, small business owners can discover what in-demand services and products are not otherwise available. Whether it’s an innovative pricing model, customized services or a product that meets customer demand with greater efficiency, don’t be afraid to stand out from the competition.

Hire outstanding talent

It’s been said many time: a company is only as good as the people it employs. Thus, it makes sense to screen potential employees, not only for experience and skill set but for the right personality fit.

Help customers make money

A great way to help build customer loyalty is to empower customers to make money of their own. The boom of online social networking has opened up a world of moneymaking opportunities. For some small businesses, affiliate network programs enable businesses to keep customers in the loop while customers receive a percentage of affiliate sales.

Sources

About.com – Entrepreneurs

Smart Biz

How to figure profit and loss

Clock watchers of the world, unite! But don't give up your job unless you're prepared. (Photo Credit: CC BY-SA/GRC ImageNet)

The reality for many when it comes to being gainfully employed during the recession is that one should be thankful to have a job at all. However, a recent employee satisfaction survey by national job placement firm Manpower indicates that employees are ready to look the gift horse square in the mouth. A whopping 84 percent of those surveyed will search for a new job come 2011.

Employee satisfaction survey shows huge difference from last year

When Manpower conducted the same employee satisfaction survey at the end of 2009, a much smaller number of respondents openly admitted to gearing up for a job hunt: 60 percent. This only takes into account people who are already consistently employed. It should be a given that those out of work will keep looking, but frustration has lurked around every corner for many of these employment seekers.

The “quits” rate as calculated by the U.S. Department of Labor is still at an all-time low, which likely indicates that a worker’s ability to change jobs could currently be classified as “severely challenged.”

Longing and disappointment

Paul Bernard, a veteran executive coach and career management adviser, told CNN Money that long-term employees who have suffered through years of frozen compensation have become disenchanted with their jobs. The necessity to earn a paycheck is there, but the emotional investment in one’s place of employment becomes more difficult as the work employees are asked to do – and paid no more for than they were a year or two before – begins to matter less with each passing day.

The level of employee dissatisfaction expressed in the Manpower survey should be taken as “a wake-up call to management,” said Manpower division COO Douglas Matthews. This has to do with dissatisfied workers and general discontent, rather than standard projections of employee turnover.

Failures of expectation

One respondent named Lauren told CNN Money that the job she was able to get out of college is in an environment where “I’m not learning anything and am not challenged by any of my work. … It just makes me feel like I’m wasting my time.”

Sources

CNN Money

‘Freakonomics’ author on the failure of employee incentives

Eating out is a major convenience cost. (Photo Credit: CC BY/Christian Cable/Flickr)

Instant gratification may feel good, but the truth is that the cost of convenience is killing budgets everywhere. Whether it’s a matter of “keeping up with the Joneses” or partaking in smaller daily indulgences, impulse spending can challenge the best budgets, particularly during a recession. With a little help from Wise Bread, here are five smart spending tips that will help you tame the runaway cost of convenience.

Cut back on cleaning services

If you have the means to support small cleaning businesses in your community, then by all means keep the wheels of the economy spinning. However, maid services are definitely a luxury for most people. Do it yourself and save. You’ll even get some exercise in the process.

Cut back the cell phone bill

Mobile devices are ubiquitous these days, but for most people who don’t rely upon them for business, they are yet another cost of convenience. Land lines are cheaper, and cheap VOIP telephone services are available for people with a computer and broadband connection.

Cut back television

Thousands of channels and still nothing to watch tends to classify cable and satellite programming for many people. Not only do TV addicts think they need the variety, but some will have multiple televisions within the same household, so ingrained is the passive habit. Read a book. Use the radio or Internet for news. Go outside and exercise. These options are cheaper than television and better for you.

Cut back on your ride

Having reliable transportation is necessary for school, work and other obligations, and in well-designed cities, public transportation serves the public need. However, most U.S. cities do not have adequate public transportation systems, so having a car is helpful. For those who need a car, buy based upon need, rather than signing up for all the bells and whistles. Paying for more car than you need is a prime example of the great cost of convenience. Try riding a bicycle instead.

Cut back on eating out

Cooking is an essential life skill that many Americans, unfortunately, never learn. Simple meals are not difficult, and as MSN Moneycentral reports, U.S. families with children tend to spend $300 per month or more eating out each month. With some planning, eating out can be cut to a minimum and save recession-starved families a few thousand dollars per year.

Sources

MSN Moneycentral

Wise Bread

What might be coming if police budget cuts continue to gain traction. (Photo Credit: ThinkStock)

When police budget cuts and layoffs make responding to fraud, burglary and theft calls impossible, some cities count on an infusion of quick cash to turn the tide. However, as USA Today reports, police agencies on the other side of the tracks are resorting to unconventional measures to fill vacancies. Paid and volunteer civilian police jobs are cheaper to support and becoming increasingly common.

Civilian police jobs: not so well-paid, not so experienced

Thanks to the recession, civilian police jobs are taking Monday morning quarterbacks and turning them into crime-scene investigators, photographers and evidence gatherers, writes USA Today. Charges of undermining the professionalism of those who walk the thin blue line have peppered the offices of the National Association of Police Organizations (NAPO), said Executive Director Bill Johnson. Even within the profession, there is controversy over some civilian police jobs that ignore standard pay and benefits negotiated for true police officers.

“The economy ought not to be pushing this,” said Johnson to USA Today. “You want the real deal when you call 911.”

Budget cuts and civilian police

In cities big and small, police budget cuts have made civilian law enforcement necessary. In San Francisco, for instance, 16 civilians were recently hired to investigate burglary and property crime through a $1 million program that would have cost significantly more if unionized police personnel had been retained to do the same jobs. Assistant Police Chief Thomas Shawyer told USA Today that the program saved the city $40,000 per person in training, gear and benefits. The police department in Mesa, Ariz., saved about $15,000 per person in salary by using eight civilian investigators starting in 2009. The civilian replacements whose charge was to investigate property crimes and fraud had previously worked in customer service at Costco, Barnes & Noble and Southwest Airlines.

Where it gets scary is Durham, N.C. Inexperienced civilian operatives are required to canvass neighborhoods following murders and other violent crimes. It puts needed eyes on the street to make up for officers lost due to police layoffs, but as Johnson puts it, “At that point of contact, we want a full-fledged police officer dealing with the public.”

Sources

USA Today

Johnny, get your gun

The Great Recession ended in June 2009, a government panel said, but economic growth is too weak to reduce the unemployment rate. Image: CC Ed Yourdon/Flickr

Recession is a technical term that technically doesn’t apply to what the U.S. is currently going through. Economic misery as a real-life condition persists, but a government panel announced Monday that the recession officially ended in June 2009. The economic downturn started in December 2007 and lasted for 18 months — the longest slide since World War II. The economy’s prolonged freefall had earned it the title of “Great Recession” long before it was officially declared over. The panel said that even though the economy resumed growth, it is far from returning to normal capacity. Meanwhile, the Federal Reserve is seeking to avoid a “growth recession” in which economic expansion is too slow to stem rising unemployment.

Recession runner up to Depression

The longest recession since the Great Depression ended when the economy resumed growth last summer, according to the National Bureau of Economic Research. The Los Angeles Times reports that a relapse, or double-dip, would be a new recession. The 18-month Great Recession is the official runner up to the 43-month Great Depression that lasted from 1929 to 1933. The most recent economic collapse eclipsed 16-month recessions in 1973-75 and 1981-82. More than 8 million people lost their jobs, and the labor market could take years to recover. The NBER said the most damaging factor in this recession was rapid productivity growth, which deleted jobs as output was marginally sustained.

Recession ended on paper, but not on the street

The NBER warned last spring that what appears to be an expansion could be a blip in a long-term contraction. The Washington Post reports that the NEBR defines a recession as “a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real gross domestic product (GDP), real income, employment, industrial production, and wholesale-retail sales.” According to the panel, GDP and industrial production bottomed out in June 2009. Employment, however, did not begin expanding until December 2009. The NEBR said that by declaring a specific date for the end of the recession it was not saying that economic conditions have been favorable since then.

Anatomy of a growth recession

While the economy is expanding, it has been too weak to lower the unemployment rate; this is called a growth recession. Bloomberg reports that economic growth slowed in 2010 to a 1.6 percent annual rate in the second quarter from 3.7 percent in the first quarter. A 5 percent rate of growth in the fourth quarter of 2009 raised hopes that economic recovery was gathering steam. An unemployment rate stuck at 9.5 percent and above is stifling the consumer spending the economy needs to grow. Fed chairman Ben Bernake said the agency has the tools to aid the economy. With interest rates near zero, some think the next step for the Fed is to buy more Treasuries, or government debt. Others believe severe unemployment is the result of Americans lacking the skills to fill available jobs — a problem monetary policies can’t fix.

Michelle Obama may be smiling here, but Carla Bruni-Sarkozy claims Obama told her in confidence that being the first lady is hell. (Photo Credit: CC BY/Chuck Kennedy/Wikimedia Commons)

Being a world leader is a high-pressure job, no doubt. President Obama discovered this when he stepped into the United States’ economic minefield, and he has the gray hair to prove it. That same pressure of misstep weighs heavily upon the shoulders of First Lady Michelle Obama, too. According to the London Daily Mail, a new biography about French First Lady Carla Bruni-Sarkozy says Michelle Obama told her in confidence that being first lady is hell. Specifically, the Michelle Obama/hell statement in the Bruni biography is as follows: “Don’t ask! It’s hell! I can’t stand it!”

Michelle Obama, Bruni and the hell of conflict

Media sources hint that the relationship between Michelle Obama and Carla Bruni-Sarkozy – while cordial in front of cameras – is strained when the flashbulbs fade. Rumors are that the pair attempts to outdo each other in terms of clothing and public image, although such a contentious relationship has not been confirmed. And it never will be if the U.S. and French administrations have anything to say about it. Such scandal will be saved for the pages of the biography “Carla and the Ambitious” and a recent unauthorized biography penned by Besma Lahouri. Lahouri’s allegations regarding Bruni-Sarkozy’s rock-star lifestyle before her marriage to French President Nicolas Sarkozy sit alongside the supposed proclamation Bruni-Sarkozy once uttered that Michelle Obama is “the only one able to challenge (her) for world’s sexiest and most glamorous first lady.”

The first lady is so very far away

Despite media campaigns that attempt to connect the first ladies of the United States and France with the concerns of the common people, the very nature of the job creates layers of separation between world leaders and the public. Michelle Obama encourages children to exercise daily in a recent television campaign, but the reality is that average children will never be able to go out and play with Sasha and Malia, regardless of how friendly and inviting Mrs. Obama comes across. The same holds true for Carla Bruni-Sarkozy and the French people, although there are some differences. While Michelle Obama comes from a background of law and higher education, Bruni-Sarkozy was a high-fashion model. She’s also a professional singer who has allegedly been connected via the bedroom to numerous titans of rock ‘n’ roll. Bruni-Sarkozy is (allegedly) quoted in the Lahouri biography as saying “On top of that, you expect me to be subtle? I am a femme fatale, my dear.”

Perhaps Michelle Obama’s right. It’s hell to be a first lady.

Sources:

London Daily Mail

Mo Rocca 180° exposes shocking Michelle Obama scandal

As so-called "jobs Americans won't do" are important to the U.S. economy, there are actually Americans willing to do the work. (Photo Credit: CC BY-SA/Hillary Hartley/Flickr)

The recession continues to leave many Americans grasping for cash, wherever they may find it. They’re even reaching for those so-called “jobs Americans won’t do,” reports the Wall Street Journal. Day labor, once considered to be the almost-exclusive domain of undocumented workers, is now on the rise among  former white-collar employees, male and female. Reports indicate crowds of aspiring day laborers waiting on street corners for jobs are increasingly non-Latino.

From auto, skilled construction and finance to day labor

When survival is at stake for oneself and one’s family, per diem day labor work becomes necessary. Certain towns in California where undocumented workers customarily come north looking for day labor jobs are witnessing the odd appearance of illegal immigrants protesting that Americans are taking away their jobs — and thus their cash now. Considering that construction jobs have mostly gone stagnant, day laborers are scrambling for jobs such as moving and landscaping, which pay less because fewer hours are required. The competition has become fierce, as skilled, educated American workers are vying for the low-paying jobs undocumented workers previously owned.

Center for Immigration Studies: Dispelling the illusion

A recent study by the Center for Immigration Studies (CIS) indicates that the concept of “jobs Americans won’t do” is a popular illusion. Available data points to the falsehood of this idea; Census Bureau data collected from 2005 to 2007 indicate that even before the recession, “there were only a tiny number of majority-immigrant occupations.” And for jobs thought to be predominantly performed by undocumented workers – such as housekeeping, maintenance, construction site labor and janitorial – Census data shows that the majority of employees are American-born. The CIS study sampled 4.4 million individuals, approximately 560,000 of which were immigrants. Even taking into account undocumented workers who fly under the radar, the sample size remains significant.

Depressed wages, meet the depressed economy

Jon Dougherty, author of the book “Illegals: The Imminent Threat Posed by Our Unsecured U.S.-Mexico Border,” points to what may very well be the economic shift that helped create the “jobs Americans won’t do” illusion. The exodus of “poor, uneducated laborers from south of the border has already worked to depress American wages,” particularly in areas with high rates of illegal immigration. As undocumented workers are often willing to accept less money to do the same work as American laborers, contractors choose to pay less. Americans – particularly those with families – can’t afford to work for $8 per hour if they were previously making just enough to cover expenses at $15 per hour. The cost of living in America makes the pay cut nearly impossible to swallow. Many undocumented day laborers can retreat back across the border at the end of a day’s work and survive – if not comfortably – on wages they typically cannot earn in their native country.

Sources:

Center for Immigration Studies
Newsmax.com
Wall Street Journal

Undocumented workers protesting Americans taking their day labor jobs

Even rich people are feeling the pinch during this recession. Coins are slipping through their fingers like sands in the hourglass. (Photo Credit: ThinkStock)

Spending has stimulated the recent recessionary economy, and rich people have largely been the ones doing the spending. But now the New York Times reports that even the big spenders have roped in their purchases. The Federal Reserve has acknowledged that America’s economic recovery has slowed. If conditions worsen, experts believe that another stimulus may be necessary.

If rich people spend, jobs are created

Demand for goods and services creates the need for additional jobs, and spending – particularly that of the top 5 percent of U.S. income earners – indicates demand. That top 5 percent, which includes those earning $210,000 or more annually, accounts for “one-third of consumer outlays, including spending on goods and services, interest payments on consumer debt and cash gifts,” according to Moody’s. As 60 percent of America’s economic fortunes depend upon consumer spending, that one-third is of super-sized significance. Gallup found that those earning $90,000 or more – their “upper income” classification – spent $145 per day in May 2010. That was up 33 percent more than  May 2009. Unfortunately, the numbers for June 2010 were significantly lower, reports the Times. Rich people spent a mere $119 per day. Were they leaning upon bank loans more than was their custom?

Luxury businesses on the rocks

Early in 2010, luxury business showed strong numbers. As summer set in, reservations at hotels like the Four Seasons and Ritz Carlton fell. Sales at luxury retailers like Neiman Marcus and Saks Fifth Avenue slowed at about the same time. Rich people are spending less and buying less Real Estate in Manhattan and the Hamptons. Sure, those who aren’t rich are forced to be more frugal and use the occasional fast loan, but if rich people stop spending, it’s panic time.

Going where the Dow takes you

Considering their greater level of personal financial investment, rich people look at different indicators than the average person when it comes to evaluating the financial weather. The Dow Jones is a benchmark that means more to those who are extensively invested. When the numbers finally climbed back above 10,000 after being mired in the 7,000s months before, they psychological affect was palpable. Spending rose in all avenues, including car sales. Luxury vehicle dealers did well, but of late, some luxury auto dealers have enacted layoffs of 15 percent of more of sales staff. Even for those rich people who can still afford to spend, the psychological impact of looking like a glutton while the majority of the country pinches its pennies keeps them from spending more, according to studies by the Institute for Policy Studies in Washington.

What is the sign of economic apocalypse?

It could be that “apocalypse” casts too dark a pall, but consider this. Linda Stasiak, a high-end skin care product saleswoman, has found that the one single item that has experienced the top sales increase is the $15.95 tube wringer. It’s designed to squeeze each and every drop out of a tube – because today, even rich people are feeling the squeeze. Fast loans for tube squeezers, anyone?

Sources:

New York Times

Has the recession changed our perception of wealth?

Many business victims of the Ireland recession resemble this boarded-up UK pub (Photo: Geograph)

It was just a year ago that Ireland was in recession and losing a job every five minutes. Now the Wall Street Journal reports that the nation has officially exited the recession, based upon export-driven domestic product growth of 2.7 percent for Q1 2010. However, Ireland’s road to economic recovery remains long. One of the hardest-hit euro zone countries in the recent global recession, Ireland’s GDP had fallen by more than 14 percent entering 2010. As the New York Times indicates, a tremendous deficit and 13 percent unemployment have prompted Irish Prime Minister Brian Cowen to warn that there’s no easy way out of the economic quagmire.

Ireland and the recession: Investor confidence required

Ireland and its recession have continued largely because the country is paying much more on its benchmark bonds than more economically healthy euro zone countries, says the Times. This has given investors pause and has not reduced guaranteed loan borrowing, making it all the more difficult for Dublin to take care of business. Ireland’s primary goal is to restore investor confidence through deficit reduction, but higher taxes, lower salaries for public workers and the fallout of the burst housing bubble – including an uptick in the origination of low cost loans – have made it difficult for Ireland’s population to wait patiently.

Hanging their hat on exports

Ireland attracted companies like Intel, Microsoft, Facebook and LinkedIn to address previous recessionary woes, but this time, the Irish government is depending upon an export revival, according to the Times. Wage and energy cost decreases – as well as a falling euro – have “improved competitiveness,” writes the Times, but that may not create enough jobs. In fact, wage cuts have driven young workers away. They want instant money, not the promise of a better Ireland in 10 to 15 years, when experts predict future infrastructure spending will resume.

Prime Minister Cowen gritting teeth over 2012 elections

The long, hard road to economic recovery via tough deficit reduction may be the only way that Ireland will escape recession. However, politics are often a “What have you done for me lately?” arena. Prime Minister Cowen, despite his promise that he will not cut public salaries further in Ireland’s next budget, is on the ropes after the haymaker of public opinion. Irish voters may have had enough.

Sources:

Wall Street Journal

New York Times

Related Video:

(Photo: ThinkStock)

Taking care of your money is vital during a recession, so don’t be taken by the top 10 secrets of effective liars, no matter where said liars roam. If you missed items 1-4 of the top 10 secrets of effective liars, CLICK HERE.

More of the top 10 secrets of effective liars

5. Good liars keep track of details

One of the top 10 secrets of effective liars is that lying on a large scale is essentially a full-time job. A good liar must be consistent with all clients, which is easier said than done. If you’re approached with an offer that seems too good to be true, try to find out what previous clients have to say about the program or opportunity. If the potential con is resistant to the idea and tries to speed you along, steer clear of what he’s selling.

6. Good liars are focused

Specifically, they focus on making the process of lying pleasant rather than repulsive. Deception is a game the best liars enjoy, which masks many of the tell-tale facial micro signals. As you continue to question the potential con on a key point of the presentation, watch their facial expressions. If they appear relieved when you change the subject, this could be a sign that things aren’t as they appear. Don’t sign anything committing your money!

7. Good liars don’t fidget

This refers to the micro signs – breaking eye contact, touching the nose, shifting in the seat or appearing otherwise nervous – and the best liars work hard to filter out such noise in their delivery. Try turning up the pressure with your questions by gradually varying the speed and volume of your voice. It may help you catch the potential con off balance.

8. Good liars also turn up the pressure

If the potential con attempts to strong-arm you into signing an agreement that seems to promise more than it can deliver, you should be wary. Using techniques that pray overtly upon emotion and desire is a classic path used by manipulators. If you feel abnormally excited by the potential con’s presentation, question whether you should be signing on.

9. Good liars will counterattack

If you question the honesty or sincerity of potential cons and they counterattack in an overly aggressive manner, it could be a tactic designed to drive you away from the hidden truth. Each time you go on the offensive against them, they must marshal their energies to maintain the lie.

10. Good liars are good at bargaining

Anything liars can do to soften the blow against them – or perhaps even deflect blame – is psychological bargaining. Smooth talking is intended to reduce anger and get the mark’s emotions under control. Liars who can do this with ease are truly dangerous. They’ll minimize their potential losses, so do your best to minimize yours.

Related Video:

(Photo: ThinkStock)

Don’t be taken for a ride! We are living through a recession that was built by people who make a practice of using deception for personal gain. What happened at Goldman Sachs is a classic example. Convincing investors, under false pretenses, that a portfolio of mortgage investments would be profitable made the company a lot of money, at least until the SEC caught on. The housing collapse left too many people in a position of borrowing money to avoid financial ruin.  In the aftermath of so much waste, it is apparent that developing strategies for being able to spot the lying cheats of Wall Street is crucial. Perhaps if investors kept in mind the top 10 secrets of effective liars, they’d be able to spot them more readily.

Top 10 secrets liars don’t want you to know

You don’t want to be taken for a ride; that much is clear. Thanks to Psychology Today, you can spot the top 10 secrets of effective liars and make your own determination as to whether to trust that investment adviser or get-rich-quick schemer knocking at your door.

1. Good liars aren’t pathological. They wait until the key moment to insert falsehood. Thus, much of the information in an investment spiel could be factual, but perhaps a key element or the ultimate promise in the pitch skews the truth. Find the key points that would impact you financially and question the presenter thoroughly on those points in an attempt to expose cracks in the façade.
2. Good liars practice the lie often before delivery. This is why asking observant questions and phrasing your questions in non-standard ways could be more effective at breaking cheats from their rehearsed presentations.
3. Good liars use half-truths. Trickery once more, as a statement that is backed up even to a small degree by fact is much more palatable than an overzealous or outlandish claim. Again, you should question everything, or at least the parts where sky-high rates of return are promised to you. The more questions the liar is made to answer, the less likely he is to be successful.
4. Good liars know their targets. According to Carolyn Saarni, co-editor of the book “Lying and Deception in Everyday Life,” the best liars will attempt to empathize with the mark in order to put them at ease. The mark’s guard subsequently drops. Thus, when it comes to dealing with financial advisers who may be less than reputable, get right down to business rather than giving the potential con the time to size you up first. If it means rushing him through his presentation, all the better, because you’ll be disrupting his polished, pre-rehearsed game. If the potential con can’t get a clear picture of your thought process, they’re much less likely to hit upon your sympathies.

CLICK HERE to see numbers 5-10 of the top 10 secrets of liars who may be trying to steal your investment dollars during this recession!

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Large firms filing bankruptcy

This is the largest bankruptcy filing of multibillion-dollar public companies in history, according to Bankruptcydata.com. According to Brian Hamilton, founder of Sageworks, “Corporate revenue is down in the United States and when topline revenue is down, there’s less money to spread through expenses.”

Because of the large number of financial crashes, bankruptcy courts are having a difficult time managing. Barbara Lynn, chair of the bankruptcy committee of the US, suggested Congress make changes in judgeships. She is requesting that Congress authorizes 13 permanent bankruptcy judges and 22 temporary judges to handle the overwhelming caseload.

How Americans are responding

Long-term lodging company Extended Stay Inc., Six Flags Amusement Inc. and GM Corp are just three of the huge corporations that are setting the stage for businesses and individuals. With struggles that are insurmountable being felt on the corporate level, many consumers are interpreting this as extending their individual struggles. Lynn Miller, analyst at Price Waterhouse, stated, “We are seeing people experimenting with more spending, but when large corporations fall, they immediately regress back to their thrifty ways…people want to test the waters, but the economic OK to do so just isn’t there yet.”

Consumer Anne Davies of Middleton, Pennsylvania said, “When GM went, we immediately reassessed our spending. Although we haven’t lost jobs or homes, we still felt that if it could happen to GM, it could happen to us…we started watching our mortgage loans, personal loans and finances that much more closely.” Davies’ sentiment is shared with the general American public, as they try to manage the recession’s aftermath.

Try to mitigate their losses

Many of the large corporations that are currently financially falling are trying to mitigate their losses. GM cut huge amounts of dealerships prior to filing bankruptcy. Six Flags amusement theme parks had heavy advertising in place, coupled with deep discounts, to bring in people, despite their huge debt. At the beginning of this year, Anne Cunningham, spokesperson for Six Flags, said, “We want to bring people in…our priority is to maintain our good name and customer service focus, regardless of where we end up in a few months.”

Many consumers are taking the same view, wanting to mitigate their losses as they watch the post-recessionary period play itself out. They are using strict budgeting and tactful decision-making to handle bills, debt, and savings. The bottom line is that no one knows exactly what state the economy will be in once the recession completely passes. With major crashes in the lending and housing industries, almost no one will walk away unaffected on some level.

Economic slowdown

Although some pundits were hopeful that the recession was bottoming out, the reality is that there are still large signs that the nation has a way to go before it’s in the clear. The consistent fall of billion-dollar corporations is a large sign that more aftershocks are going to be felt by the economy. Consumers have to take proactive steps to watch their personal loans, mortgage loans, savings and retirement accounts. No one knows when the recession’s aftermath will truly be over, and consumers need to be prepared.

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The Consumer Financial Protection Bureau

Experts who believe in the virtues of the Consumer Financial Protection Bureau are excited to finally realize an organization that is directed towards protecting the consumer. They believe that one of the main contributors to the recession was predatory mortgages and deceptive lending practices. The bureau will push towards bringing a transparency to all loan products and unity among them so consumers can truly comparison shop. Part of the goal is to empower people to make wise decisions with their money and limit their own risk accordingly.

Detractors voice their opinions

As with any new idea, there are detractors who believe the bureau isn’t seeing the big picture. The crux of finding a solution to a problem is to understand why it happened in the first place. Experts say that there were two reasons why homeowners fell into problems:

1. The homeowner took on debt that they reasonably should have never taken on, or
2. The homeowner was doing well but got caught up in other external issues like layoffs, firings and market declines in general.

Without holding consumers responsible for their actions, it is difficult to change things around. Opponents of the new bureau’s purpose believe that accountability—both individual and as a society—need to be fostered to make any viable changes and improvements in the market.

Tips on how to take responsibility for finances

Consumers need to take responsibility for their past mistakes. Experts agree that reflecting on the past and making good decisions in the future is what is going to turn their situations around quicker. One of the biggest suggestions for consumers is to live within their means when it comes to their monthly budgets. According to a survey done by FINRA Investor Education Foundation, about half of Americans today have trouble keeping up with their monthly bills. Part of the problem is that they overspend and continuously stretch their limited income.

Another tip for consumers is to never carry a revolving balance on credit cards. The FINRA study showed that 51% of Americans have a balance they carry from one month to the next. About 29% are still only making the minimum payment on their cards and 23% have taken on a late fee more than twice in the last six months. This is one of the most costly mistakes consumers can make. Over time, taking on late fees and high interest charges can eat away at savings, paychecks, and investments.

Looking positively to the future

When it comes to managing financially in the future, consumers need to be aware of steps they need to take to protect themselves. Though there is a new Consumer Financial Protection Bureau coming into the mix, the responsibility of personal finances lies squarely with the individual. Wise decisions and careful planning are the only true things that will eliminate problems and create financially sound consumers in the future.

FedEx has announced that its fiscal third-quarter profits more than doubled from a year ago, the first year-over-year profit increase in five quarters. Revenues increased by 7 percent to $8.70 billion, and the company posted earnings of $239 million, or 76 cents per share, compared to $97 million, or 31 cents per share, in the previous third quarter. Revenues and earnings for the quarter exceeded Wall Street expectations of $8.37 billion and 72 cents per share.

Caution is still in order

The Memphis, Tennessee-based shipping company is considered an economic bellwether because of the variety of products it ships, and its positive fiscal report is being roundly applauded as an indicator of a broadening economic recovery. In an Associated Press report, however, CEO Fred Smith stated that the company’s recent economic growth is primarily the result of improvements in the manufacturing sector and cautioned that the depressed housing market could continue to pose problems.

GDP is expected to rise

Plummeting real estate values affect economic conditions across the board, from shipping companies to retail outlets to lenders specializing in installment loans for people with bad credit and similar types of payroll loans.  Despite current housing market conditions, however, Smith expects a 3 percent increase in gross domestic product for 2010, which is in line with the predictions of economists.

Businesses are shipping more

Smith said the improved FedEx earnings resulted primarily from higher shipping volumes in its international express and ground units. Average daily shipping volume at FedEx Ground grew 5 percent, largely because more packages were shipped between businesses. Increased shipping by businesses is considered a positive sign for the economy as a whole. The improved earnings are also attributed to higher package weight, which is considered another positive economic sign.

FedEx has reinstated benefits

In the depth of the recession, FedEx announced sweeping cost reductions, including the suspension of 401(k) matches, executive pay cuts of 10 percent and a 20 percent cut of Smith’s own pay. Hourly wage reductions and layoffs eventually followed, all of which contributed to the third-quarter revenue increases. According to Forbes.com, the company has now reinstated merit-based pay increases and 401K matching programs, which are expected to negatively affect earnings growth in the fourth quarter.

Freight shippers continue to lose money

FedEx posted losses for the company’s freight unit in the third fiscal quarter, as fuel costs continue to hamper freight trade. Similarly, UPS, the world’s largest shipping company, reported last month that its fourth-quarter earnings nearly tripled, yet its freight business continued to lose money.

Banks and credit-card companies typically charge off debts once they’re 180 days past due, and the Federal Reserve does not separate charge-offs from debt payments when reporting national credit-card debt-reduction figures. According to a CardHub.com study analyzed by MoneyNews, lenders charged off a record-breaking $83.27 billion of credit-card debt last year, which accounts for the lion’s share of the $93.2 billion drop in card balances.

Debt reduction due mainly to lender charge-offs

According to government reports, as of January 2010, credit-card balances have been declining for 16 straight months. But according to the CardHub.com study, the first quarter of 2009 was the only time during that 16-month period when consumers actually paid down card balances. In that quarter, consumers paid down card balances by $46.9 billion, and lenders charged off an additional $17.59 billion. After the first quarter of 2009, national card balances either increased or remained steady.

Credit-card debt is down, but not paid down

The CardHub.com study suggests that consumers have not, after all, been paying down credit-card debt, and the record-breaking lender charge-offs for last year evidence the financial pressure faced by many Americans. Credit-card debt charge-offs were a record-high of 10.1% in the third quarter of 2009. The rate was somewhat lower in the last quarter, but the situation is expected to become worse. According to MoneyNews, Moody’s Investor Service predicts that the charge-off rate will reach 12% in 2010. By way of comparison, in the fourth quarter of 2006, a year before the current economic downturn began, the charge-off rate was a mere 4%.

Which is not surprising

It should come as no surprise that unemployed and underemployed Americans are still financially stressed and leaning on credit cards and emergency cash loans. Increased charge-offs by lenders is just one more ripple in the ever-expanding ripple effect of the recession.

Saving habits have changed

Studies are showing that the economic downturn changed consumers’ savings habits. The hefty unemployment rate and the lack of credit options worked together to create a difficult situation for consumers. Adding to that problem were the mortgage issues and the suspension of corporate 401k matches. Combined, all these things caused Americans to have to tap into savings and that move left them with diminished nest eggs for the future.

The result of a decline in savings

The decline in savings is set to make some serious changes in the future of Americans. First of all, without a nest egg squared away, many people are already accepting the need to postpone retirement. No longer are workers looking to exit the workforce in their mid-60s. In today’s world, they are looking for a much longer work-life that extends well into their 70s. A growing number of Americans say they will continue in the workforce for as long as they are able.

What seems to be changing as the years go by is less Americans are focusing on saving and more are focusing on getting by. Experts attribute the change in focus to the credit lending crash of the recession. Prior to the recession, many people relied on credit for emergency bills and monthly expenses. Lenders extended unwarranted credit to sub-prime borrowers and handed out millions in funds to consumers who had little ability to realistically repay the money. When the recession began, lenders quickly shifted their priorities to mitigate loss, rather than extend more credit. That mitigation meant increasing interest rates to unmanageable levels, cutting limits and tacking on fees. Lenders were focused on maximizing their income due to the huge number of defaulted loans. Increasing the cost of credit only caused more consumers to fall into trouble.

Consumers focus on debt

Saving cash now is a priority, but many Americans are just getting back on their feet financially after suffering huge losses as a result of the recession. Surveys are showing that most money is still going to paying down debt. Consumers see the problems debt can create and are suffering through heightened interest rates. They understand the cost of credit and are trying to get rid of it as quickly as possible.

Retirement in the future

Experts say that retirement savings, including Social Security benefits and pensions, should add up to 80% of pre-retirement income. They tell customers that making that 80% goal is not difficult. In general, most consumers can meet the goal with a strict rule to save 7-10% of their monthly payday cash now. Though budgets are stretched, most Americans can reasonably find the money to save. Most savings goals for retirement can be reached if people understand how to manage time and budgeting.

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Ravenswood, West Virginia suffers a blow

Ravenswood, West Virginia was a city whose main industry was manufacturing. The state mass produced various commodities for the world and employed thousands in its one big factory. When the recession began, so did layoffs. They continued until the plant officially shut down in the beginning of 2009 and now residents are wondering if recovery will every happen. Unfortunately, Ravenswood residents are not unlike millions across the country who sat by helplessly watching their city fall to the harrowing economic times of the past 18 months. The question they have though is: Will their city be able to recover, or is it now relegated to remain a ghost town?

The many lagging cities

Throughout the US there are a wide range of cities that are taking a wait-and-see attitude towards recovery. Here are some of the hardest hit cities: (http://www.usatoday.com/news/nation/2010-03-01-townhangingon_N.htm)

• Madawaska, Maine. Last month the city’s workers agreed to an 8.5% cut in their wages in an effort to keep the paper mill alive. The mill employs over 1,000 people of the city’s population of 4,000. The cut, though necessary, is not good news for the city and many people believe that the worst is yet to come.
• Glenwood, Washington. This is a small city with a population of just over 500. The city’s forest products industry is taking a staggering hit due to flat lumber prices and increasing land costs. Recovery is almost impossible according to analysts because of the city’s over-reliance on just one industry.
• Georgetown, South Carolina. This is a larger city than the other two. But, with a population of just over 9,000, it still is not impervious to the problems of a lagging economy. The city’s steel mill closed last year and caused the unemployment rate to skyrocket. With few alternative options, the population is at a loss when it comes to finding jobs without relocating.

The crux of the issue

Though a lag in pay can thwart anyone’s motivation, the real problem for workers in areas hit hardest by the recession is an uncertainty. When a city’s main industry is stifled so ubiquitously, it’s hard for the population to regroup or find any hope in a future turnaround. For example, Ravenswood’s residents knew the closing of its main factory was coming for months. Some jumped ship early-on, while others remained hopeful. Once the plant closed, that hope was all but gone. Now people are seriously considering relocating because most likely the jobs the plant provided will never return.

Analysts check in on the problem

Many analysts are studying the new post-recessionary condition carefully and reporting back with little optimism. Mostly the issue is that the country has never had the same pressures as it does now. In past years, if a farmer lost his or her land to fire or drought, he could pick up and move relatively easily to another location. A steel mill worker who was laid off due to a plant closing could move to a new city for a job. In today’s market, that is no longer a possibility for hundreds of thousands of workers. States that rely heavily on manufacturing are all having problems with recovery and workers are hard-pressed to find employment. Experts expect workers to have to do a complete 180-degree turnaround, career-wise, and only those who manage to do so will survive. Those that don’t may remain in financial turmoil for many years to come.