Friday, October 10, 2008

Counter-recessionary intelligence

Recession Week continues here at Canadian Entrepreneur. Here are a few recent media items that may help you cope with what's going on.

1. The Globe Explains it All for You: For those who don't understand what exactly is going on in the financial markets and why it's hitting you where you live (which includes most of us), is running a regular series of articles answering common questions about the fiscal crisis.

Some of the questions are basic ("What is the TED spread?", "Should you lock in your mortgage?"), while some would have been unthinkable a month ago (e.g., "Who owns CMHC and can it go under?", and "Can a country actually go bankrupt?").

Follow the long, meandering meltdown here.

2. National Post had a good interview recently with Les Mandelbaum, owner of Umbra Ltd., a household knicknacks design company that's been globally successful - until recently. This spring, in response to rising costs, Umbra laid off 10% of its workforce and shut down a warehouse in Buffalo, NY.

But Mandelbaum remains confident that useful, well designed products will always find a market. He sees three criteria for products that will do well in a downturn: they must fulfill a function that previous products don't, they must look good, and they must be priced reasonably. "You get those three things working, it doesn't matter about the economy."

Read the whole story here.

3. To find out how small business is coping, Inc. Magazine asked some of its top "30 under 30" entrepreneurs about their experiences in the latest crisis. Here's a sample.

Q: How is the crisis affecting your business? "From consumers, while we haven't seen overall sales suffer too much, we have seen a drop-off in big purchases in the last week, quite remarkably."

Q: Has credit been harder to get? "Definitely. I still haven't been able to get anything but very basic credit, and I've recently seen requirements for loans and other growth capital increasing in scope and complexity. As for investment, the last month has been a rollercoaster with investors, but I'm also seeing the appetite for angel investments increasing as brick and mortar investments actually start to look safe compared to the stock markets. This is a good thing."

Lots of variations, lots of opinions. Check out the full story here.


alencoope said...

alencoope said...

This blog is really nice and informative. We are pleased to know this blog is really helping people and it’s our pleasure to post informative content on this useful blog created by webmaster.

Here’s our market view on American stock market for 13th October, 2008

You all know my opinion - we have the characteristics of at least "a" bottom. Look at the scoreboard - Dow and S&P 500 down 18% last week, in only a week. If that doesn't show irrational dumping the only other environment that probably would is an official end of the world pronouncement from on high.

The VIX Index (69.96) soared to a record high; bears at extreme high levels, bulls no where to be found; valuation levels the best since Black Monday, October 19, 1987. And back then you could buy AAA long term munis yielding 10% or better vs. around 4.75% today.

No one can call bottom in advance with confidence, but we can correctly report that the conditions for at least a bounce are in place, assuming we are not headed for a 1929 depression.

We are not, but don't take my word on this. Last Tuesday, Oct. 7, Gary Becker the 1992 Nobel economic laureate, professor of economics at the University of Chicago stated in the Wall Street Journal - "we're not headed for a depression."

He states, "World economic growth will recover once we are over the present severe difficulty." Also he states, "Although it is the most severe financial crisis since the Great Depression of the 1930's it is a far smaller crisis, especially in terms of the effects on output and employment." Team
Get 56 days free trial on our exclusive newsletter. Offer Limited.