A recession is when the Gross Domestic Product of a nation declines for two or more quarters. It is when the total value of goods and services of a country stop growing for six months or more.
Posts Tagged ‘recession’
A Recession is…
Wednesday, June 10th, 2009Don’t Give Up, Give Better…
Friday, May 29th, 2009This article explores different strategies for giving in a changing economic climate.
- With the wrath of the recession widespread, most people are cutting spending wherever possible, charitable giving being a popular place to start.
- But charities are in need right now more than most and more than ever.
- Instead of cutting charitable giving altogether, some people are reassessing which charities are most in need (prioritizing, for instance, food banks over art galleries) and directing whatever they can afford to those organizations.
Facts & Figures
- Donors have two basic theories of giving: (1) direct service to individuals and (2) change through advocacy and public education.
- During tough economic times, there is a shift from advocacy and public education to direct service because its effects are tangible and measurable.
- Three techniques for giving in tough times are: (1) conversion (let the charity spend part of the pledge to an endowment immediately), (2) deferral (spread the donation out over time), and (3) triage (weed out charities no longer seen as effective).
Best Quote
“When things go down, no matter how much you have, you think you are poorer and therefore your tendency is to withdraw completely. The problem is that this is the time when you can do the most good, when you really need to give.” – Joe Briggs, retired legal-publishing executive and philanthropist
First New York, Now New Delhi…
Friday, May 29th, 2009The economic recession’s reach is apparently universal – it seems nowhere will escape the clutches of the economic downturn.
- It seemed that India’s booming economy would be one of the few lucky survivors of the global economic meltdown. But now it looks as though what happened to the rest of the world is beginning to happen in India.
- Most of the boom of the last 5 years was a result of investment – and since foreign investment has declined with the global economy, so has a good chunk of India’s growth. A report from the IMF says this reliance on foreign investment has made India’s economy particularly vulnerable.
- Since cheap foreign loans are harder to come by, Indians are now forced to borrow from Indian banks. Unfortunately, the same tightening of credit that happened in America is happening among India’s domestic lenders.
Facts & Figures
- At the end of 2008, the Indian economy’s rate of growth was at its lowest in 5 years: 5.3%.
- In 2008, 38% of the Indian GDP was accounted for by investment. At one time, more than a third of these investors were foreign, but last year foreign investment fell to its lowest level in two years.
- The Indian stock market dropped by 58% last year, though much of that loss has been recovered in the early part of 2009.
Best Quote
“If India wants to go back to the 8 to 9 percent growth rate, private investment and low cost of capital is essential.” – Jahangir Aziz, Chief Economist for India at JPMorgan Chase
Will The Recession Ruin The 2010 World Cup… For Adidas?
Friday, May 15th, 2009The recession is truly changing the playing field. Even events that consistently boost sales for companies are failing to beat the recession.
- Big sportswear companies typically see an increase in sales when huge events like the World Cup come along, but this year Adidas (ADDDF) is struggling more than usual.
- Even after a rough first quarter, the company is optimistic about the boost they’ll receive from the 2010 World Cup in addition to a recent management overhaul and widespread layoffs.
- However, excessive supply of product along with rising unemployment and the continuing recession throughout Europe may negate any earnings increases the World Cup brings.
Facts & Figures
- Adidas (a German company) reported a 52% sales increase in the wake of the 2006 World Cup.
- In the first quarter of 2009, Adidas’ reported income dropped a staggering 97.2%.
- European retail markets account for approximately half of Adidas’ total sales.
Best Quote
“In Western and Central Europe we will continue to face some tough times.” – Ingbert Faust, Analyst for Equinet
What Do You Do When Your Computer Starts To Die?
Monday, May 4th, 2009How spending habits and the way we view appliances are affected by the changing economy…
- Many people are trying to save money and are getting appliances repaired instead of automatically purchasing a replacement.
- Both car and computer repair shops have seen a huge spike in demand for their services.
- Consumers are taking better care of their cars and other household items in order to save money.
Facts & Figures
- Computer repair business’ revenue is 30% higher than a year ago.
- Consumers are extending the lives of their vehicles to nearly 10 years on average, from eight just two years ago.
Best Quote
“I had a lot of customers who had an imaginary threshold. They’d say, ‘I won’t fix it, I’ll unload it.’ Those customers are rethinking that threshold and saying, ‘Maybe I’d better take better care of my car.’” – John McWilliams, Service Manager at Autobahn Motor Works of Bethesda, MD
Economic Downturn Leads To Unexpected Career Choices
Thursday, April 30th, 2009One man’s career turn-around in the face of economic decline shows us how finance and philanthropy intersect and how a trying situation might lead down a fulfilling path.
- After a successful career at Bear Stearns, Kip Schaefer left the private sector and now works for the National Philanthropic Trust.
- His masters degree from NYU’s fundraising program, combined with his finance background and outgoing personality, made him the top candidate for the National Philanthropic Trust’s opening for director of institutional business development.
- He relied on passion and gut feelings to guide his decision-making when he ended up with two promising job offers.
Facts & Figures
- In the last decade, the number of nonprofit groups has increased nearly 40%, to 1.4 million organizations.
- $306 billion was raised in 2007 by nonprofit organizations.
- Thirty programs around the country offer master’s degrees in nonprofit study.
Best Quote
“Align your intuitive spirit with your career goals.” – Kip Schaefer
Gas Is Going To Cost You No Matter What The Rest Of The Economy Is Doing
Saturday, April 25th, 2009This story explores how, thanks to a small group of powerful individuals, oil prices will remain high despite changes in demand.
- Though oil prices initially dropped when the global economy began to falter, they have recovered and stayed more or less stable – even as demand for oil continues to drop.
- This doesn’t really make sense economically – according to the law of supply and demand, prices should be plummeting as unemployment around the world grows and oil consumption slows.
- But as other markets remain volatile, investors are seeking the relative safety of oil. Oil production is tightly controlled by OPEC, which can keep prices stable by limiting supply when demand decreases, and vice versa.
Facts & Figures
- In July of 2008, the price of oil rose as high as $140 per barrel. By December, the price had dropped to $33 a barrel. Today, the price fluctuates somewhere between $40 and $50 a barrel.
- Demand for oil is expected to drop 2.8% this year – to 83.4 million barrels per day.
- Oil inventories are at their highest level since 1990, but members of OPEC have cut production of new oil by approximately 3.5 million barrels a day.
Best Quote
“This is a measure of just how abruptly the world economy has fallen in recent months, and how dire and uncertain its future prospects have become. De-globalization may already have begun.” – from a report published this month by PFC Energy, a consulting firm
What’s The Worst-Case Scenario For The Financial Crisis?
Saturday, April 25th, 2009It could just start with “Sale” signs at your favorite stores. Unfortunately, Spain is getting a glimpse…
- Several European nations – most notably Spain – are facing deflation in the wake of the global financial crisis.
- As consumer demand continues to drop, Spanish merchants are cutting prices, salaries, and employees just to keep afloat.
- Because Spain’s currency (the Euro) is now governed by the European Union, there is very little the Spanish government can do to control potential deflation (such as slash interest rates or devalue the national currency).
Facts & Figures
- Spain’s unemployment rate is currently 15.5% and could reach 20% in the near future. Among workers under 25, the rate rises to 31.8%. In comparison, the unemployment rate in the US is under 9%.
- La Casa de la Caridad (Valencia’s main soup kitchen) expects to serve 12,000 meals to needy residents in April – three times as many as last year.
- Since last year, wholesale prices in Japan dropped 2.2% and 8% in Germany; in the U.S., the Consumer Price Index dropped for the first time since 1955.
Best Quote
“Alarm bells are going off. Economies can recover from deceleration, but it’s harder to recover from a deflationary situation. This could be a catastrophe for the Spanish economy.” – Lorenzo Amor, President of the Association of Autonomous Workers