US Treasury Secretary says that the Economy is still Struggling

Despite the news that the US economy is now on its way to recovery, Timothy Geithner warned that this year is still one of those difficult periods.

During a congressional hearing, Geithner said that the effect of the financial crunch may last for a long time. On a more positive side, the Treasury Secretary of America said that the government already recovered about half of the total amount that it used for the Troubled Asset Relief Program. So far, the investments o the TARP generated as much as 16 billion pounds or equivalent to 24 billion US dollars which can be another added revenue for everyone who pays taxes in the country.

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At the same time, Timothy Geithner also said that almost all Americans are currently looking for more employment and financial aid. Unfortunately, there are also millions of Americans that are still tormented by the damage caused by the past recession as well.

Nevertheless, Geithner said to the Congressional Oversight Panel that the current government of United States is already boosting the economy. The actions even cost them lesser than the amount that they expected. With the help of the TARP, the financial stability is being restored gradually. The good news is that they did not spend high cost for that.

Before the year 2008 ended, the Congress approved the bail out for the TARP. This cost them 700 billion US dollars. The TARP has been recognized as one of the main influences in giving the economy a boost. The invested made on the TARP actually grew during the Q3 to Q4 of 2009. It was indeed a great news especially after the country experienced a very long and daunting recession.

But despite these acclaims for the TARP, there are still criticisms since it has not met some targets particularly the increase in money for bank lending.

Recession-Proof Your Life to Survive the Economic Crisis

Every country experiences an economic recession. It is because this is a part of the economy flow. Right now, everybody is talking about it. Try to watch the news and there was never a day when you won’t hear something about the recession. For most people, the recession is scary and it affects all of us. One of the best ways to protect yourself from a recession is by investing in gold and silver. We have done our research and found a gold IRA company called Regal Assets that helps you rollover your current IRA or $401k into one that is backed by precious metals.

People affected by the recession can be classified into two. First are those who are scared yet doing nothing but to wish the recession away. Second are those people who are preparing, instead of panicking. If we belong to the second classification, then times when the country’s economy recedes wouldn’t be so frightening for us. But for those who are scared of the present economic situation, here are some of the tips on how to survive the recession.

1. Recession-proof your family budget.

This is one of the best yet simplest ways to avoid depression during recession. As the one in-charge of budgeting, all you need to do is to make money by spending less money. You can start this on your grocery budget. How? Plan your meals for the week and make a shopping list which should include the items you need and the amount you can consume. To control impulse purchases, make sure your stomach is full before grocery shopping. Make it habit to check your receipt before you leave the counter. These few tips can help you save few bucks on your grocery budget. You can use this extra money to pay for your bills.

2. Recession-proof your business

Those who are running a business must know the ways on how to survive the recession and this should be their priority. If you can’t keep your cash flowing and customers coming, you might not make it through this tough time. One way to recession-proof your business is to go global. Using your internet, make your site more professional-looking and target international market. All you need here is a good online presence and enough knowledge on internet marketing.

3. Recession-proof your income

Since you can’t recession-proof your day job, just recession-proof your income. No one will do this but you. If you think there’s this entrepreneur in you, then try to invest in a business opportunity you think will do well in your locality or online. Another thing you can do is to start looking for additional ways to make money. If you have time, get a part-time job or make money using the internet. Having insurance will ultimately save money in the long run. To avoid unexpected expenses one should always seek their options to find the best insurance out there. To find the best insurance to recession proof your income first you should read insurance reviews online to get all the needed info to decide what insurance carrier and terms to select.

These are just among the ways on how to survive the recession. Most importantly, do not make new debts while recession-proofing your budget, business, and income. Debts will hamper your ability to survive tough times. So might as well learn to spend less than what you earn.

U.S Economy to take a Plunge on another Recession?

There are now drafts being made on the G20 Toronto communiqué which aims to lower the deficits, hoping that a back-to-back recession would not happen.

Canada indeed became successful in recovering from the previous recession. However, one of the market watchers said that the recent recovery efforts will not be spoiled especially now that United States is likely to encounter another economic fall down.

According to the president of Hussman Investment Trust, with the signs and evidences that they see today, there is a big chance that the economy of United States will head to another financial challenge. This was the post made by John P. Hussman at the website of their firm which he called as the Recession Warning.

At the same time, John P. Hussman also mentioned that the big warning that another recession is coming is the decline in the ISM Purchasing Managers Index. If it becomes lower than 54, this can be a great indication that another financial crunch is coming soon. However, he also noted that during the 1988, the low growth rate experienced by the ECRI Weekly Leading Index was not in any way connected with any given recession.

To give his conclusion, John P. Hussman said in his post that his concerns regarding the potential problems in the financial market and in the economy of United States in general becomes higher as days goes by. His worries were even more affected because of the current state of the United States economy and its slow recovery from the past recession. With the obvious vulnerability of the economy, another economic recession may happen sooner or later. The current troubles such as the house and business foreclosures and high mortgage delinquency levels may contribute to the unemployment rate which may grow by as much as 12 percent.

How to Recess Your Expenses during the Crisis?

Every person can recess his expenses for 10-20% without any special damage for his “comfort zone”.

It does not mean you won’t be able to afford yourself something you need. It is more important to tune on saving money and just curb your bad habits.

Profit Online Research has published the results of their investigation “Changes in consumers’ behavior and motivation during the crisis”. They cleared out that primary directions of saving money are searching for trade centers and supermarkets where habitual products cost less and doing shopping more rarely. But this tendency did not impact purchasing products of essential necessity (such as eggs, bread, milk etc.).

Tobacco and Expenses

Having analyzed the most popular methods of saving money, we outlined the most advantageous of them.

Entering this new epoch of saving money a great many of smokers try to quit it. Smoking itself is rather expensive, but if you add constant professional teeth whitening, special toothpastes, perfume – you can easily see that expenses of a smoking person grow dramatically.

Meals

A lot of people note, that it is significant to save money on you lunch. Having meals in cafés or restaurants nearby is rather expensive and we would not advise you to save at the cost of your health buying cheaper food. What solution can be found? Eating home-made food. Cook at home and apart from economizing, you will get the guaranteed quality and freshness.

Crisis period has prevented a lot of families from buying convenience food and stimulated home cooking from raw alimentary products.

Pleasures and Discounts

There is a solution to save the money also for cinema amateurs. It is not a secret to anyone that day and morning performances cost much less than evening ones, plus there is more guarantee to find tickets. Why not trying this alternative?

If you are a constant client of some service, it results in being very convenient to get a subscription or season ticket. Sometimes it lets you save half price and even more. Discount cards are not only a good publicity passage for enterprises, but also a good possibility to save money for consumers. Why not trying to make a virtuous circle from your discount cards together with your friends and neighbors? Why don’t you repair your car with his discount card while your neighbor will buy a sweater with yours?

No Debts Accumulation.

Be attentive with your debts. If you don’t do it debts can grow like a snow-ball. Instead of watching your bills accumulate, try to pay them at their arrival. Otherwise there is a risk to expire several of them while waiting for one detained and pay penalty fees.

To obtain bigger control over your expenses experts advise writing everything down. This way you will see the obvious advantages of this method. There are also various accountant computer programs, where the machine itself will suggest you where you can save money and will give you ready day/month/year analysis.

You see there is always something to improve without any special sacrifices. In this New Epoch of Great Economizing one just has to be more careful in his actions.

Acting in the Period of Overall Recession

Crisis is a normal thing in the life of people. There is hardly one of us who can’t remember some situation that has thrown him from the measured and stable current of life into an uneasy and anxious situation. Anyway, critical circumstances require to revise the past positions and to develop a strategy in order to reach new goals.

Scientists distinguish two types of crises. The fist group is connected with the natural cycles of development of human’s personality and in general is very positive for every “homo sapiens”. But what is worth discussing more in this period of overall recessions is rapid external crisis. Against our wishes or intentions it can drug us into its destructive vortex. The larger scope it takes, the less strategic islands remain for survival.

But people can react differently to this stressful situation according to their emotional type, way of thinking, personal past experiences etc. So the ways out varies too.

Types of reaction

Generally speaking, we can point out that there are three main groups of people according to the reaction in a stressful situation.

The fist group consists of people who perceive any new situation like a new one. They just follow the main current, adapt to any new circumstances and catch any new chance easily. They are difficult to defeat in one particular situation, but they are usually less effective when a measured and goal-oriented motion is required.

People from the second group are much more though-out. They use only methods proved by time and analyze the situation from their past personal experience. They are very exigent and consecutive.

People from the last group are the most flexible. They can move according to the main current as well as develop their unique goal-oriented strategy. They challenge new situations still being conscious and prudent analyzing the risks.

The first group is the most effective and efficient when it is not bound by any special rules.

The second is absolutely necessary in stable and structured organizations and industries.

The third displays the maximum productivity when they are given some creative space and possibility to express their creative thoughts, reflections and opinions, having team’s support, which is able to restructure the strategy if required.

How Can I Use This Information?

  • a natural question that comes to your mind after reading our classification.
  • Reflect. Try to feel which group is yours and what type of professional activity can bring you maximum (or at least stable) profit.

    The most problematic, even if it can seem strange, is the last group, though having big professional potential, they still face difficulty in finding “their” working place. If you tend to this category, we would advice to look for among small but mobile young organizations, where your potential and wish to express personal ambition can be the target of interest. So if the information received at the interview seems to you to have sense and to be clear and reasonable, while the words “plan”, “profits”, “expenses” are said in the last turn, maybe, it is what you’ve been looking for.

    What to Become to Avoid Recession?

    The situation at the financial market is still unstable. During the crisis period millions of people have been recessed and some professions have become not required at all. We’ve tried to rate 10 of the most required and 10 of the least required professions.

    Non-required profession in the crisis period:

    Showmen. Most of big companies have refused to having big and expensive parties for their stuff, what had dramatic consequences for singers, humorists as they have lost a huge part of their orders. Producers stage less what impacts directly on the wages of actors.

    Realtors. Countries are frozen waiting the real estate market to collapse. Everyone tries to postpone selling or buying their houses and apartments. Furthermore, most of agencies try to reduce the staff and to employ people for percentage deals.

    Construction engineers. The biggest recess is pointed out in the building sphere. Companies have to freeze their objects, cancel the required vacancies and reduce the staff. One year ago the number of wanted construction engineers was triple to the present.

    Marketing directors. The number of unemployed specialists is 25% more than the vacant working places, while at the end of 2008 45% vacancies were not covered. Moreover, every week the number of unemployed specialists is growing while not so long ago companies used to have 2-3 marketing specialists.

    IT-specialists. Keeping system administrator or programmer starts to be too expensive for many companies. Now leaders try to arrange network on their own, while their secretaries modify sites and logotypes of the companies.

    Headhunters. Headhunting agencies start reducing their staff, while many HR-departments in big companies are abolished totally. To put it in a nutshell, all the job market plunged into recession following the financial crisis.

    PR specialists. While big companies in B.C. (before crisis) period paid a lot of attention to the image of organization, nowadays there is a total tendency of reducing publicity budgets and freezing communicative projects. So it is not the most abundant period for PR specialists, used to getting star salaries to slow down their pace.

    Bank clerks. Banks may have suffered most. The population draws its deposits, it becomes more and more difficult to get a credit, refinancing rate is higher and higher. Does it make sense having so many employees?

    Business-trainers. Together with the staff recessions the qualification of workers goes down too. Companies attend less to raising the level of the qualification of their workers. If it goes ahead like that, even education won’t be required as employees won’t be either.

    Waiters. Not so many people can afford to go to a restaurant just to have a meal .Everyone saves money. Waiter’s vacancies are reduced for 30%.

    Required professions:

    Specialists of debt collection. The quantity has increased by 40% relatively to the 2008. Financial crisis has dragged a huge amount of non-payments.

    Crisis managers. These specialists are able to determine the strategy of company’s reanimation. They are rare, and as the consequence they are well-paid. But a businessman will do everything possible not to let his enterprise die.

    Alcohol sellers. Generally speaking, retail sale never has crises. Especially for alcohol, as there is a good tradition to remove any stress by alcohol.

    Magicians/mediums. Sometimes crisis wins and nothing will help businessmen reanimate their business. Someone relies on his intuition, those who don’t appeal to those who can foresee their future.

    Accountant. Crisis forces to save money. The minimization of tax payment is getting more actual than ever. That’s why good specialists are required.

    Teacher. During this hard period a lot of us will think about changing their profession, what means getting proper education. Or at least spend time during unemployment period usefully.

    Internet manager. Publicity goes away from the printed methods and becomes more popular in the global net. Companies fire marketing specialists and invite coworkers for distant collaboration.

    Business estimator. After your business has collapsed, its ruins still can be useful for someone. In order to extract the maximum advantage from the bankrupt company, businessmen pay well to estimate the remains in a proper way.

    Legal experts. In the period of instability the legal information is more requested than ever.

    There are also other opportunities you can take advantage of like grants and federal loans. I have a friend who recently got a federal loan and funded a new business venture. He started his business in 2008 and now in 2010, he is doing better than ever. Never give up recession or not. There are always opportunities and ways to overcome recession and bad times and still make a good living.

    Business Consulters, Foreign Investments and Recession

    Sometimes companies want to draw foreign investments for their activity. How to reduce risks and feel safer? What do business consulters advise in such cases?

    The fists thing is to attract business consulters from the both sides. And it is important not only for foreign investments, but in every case of working with external investments, when investor can prepare a deal deriving only from him own interests and it is important to see it in time and cure the interests of the company.

    The presence of the consulters from the both sides lets to keep some certain balance of interests while preparing the deal and serves as safety net for possible errors. Also foreign consulters can be little competent in the economic realities of investing in your country and can base on their experience in internal investments.

    It is not such a rare thing when a foreign investor prepares package of documents that has declarations and conditions which don’t correspond to the actual legislation of the interested country or company’s statute.

    So we advise to ordain from the very beginning to clear that there must be consulters from the both sides. Their task will be to proclaim mutual agreements accordingly legal rights and interests.

    To avoid disputes or misunderstandings in the following: in the preliminary agreement form, size, terms and conditions of the investments must be stated, as well as membership and competence of the enterprise’s leadership after the enclosure of the investments; the order of solutions adoption in the process of investments enclose and after it; conditions of possible sale of the shares to third persons etc. as well as other conditions influencing rights and duties of their business owners.

    If the planned investments will be mutual, and the interested country also plans to enclosure some means, it has to be taken into consideration that “limited liability company” reserves the right of each member to leave the company wherever he wishes. So leaving the company with 60% shares the member will leave the enterprise with significant damage.

    Also it has to be noted that all the documents which are supposed to circulate on the territory of the interested country must be composed on its language. We advise to pay special attention to the place of examination of disputes and acting legislation. Sometimes it can happen that after some months or even years of participation in the foreign investor, some dispute can’t be regulated through negotiations and the interested country suddenly realizes that arbitral court is not its native but some “international commercial arbitrage”.

    The conclusion is obvious: when drawing foreign investments, one has to supply qualified competent specialists on its side. This way, specialists, having the necessary experience and knowledge, can develop and organize the investments model which will correspond to all the necessities and interests of involved parts in general and its client in particular. Being twice prudent and preparing a solid legislative base has never damaged to anyone.

    What is the difference between Recession and Depression

    Economists do remember an old joke that says: A recession is when your neighbor loses his job. And a depression is when you lose your job. What is the difference between the two terms: recession and depression? The distinction between them is not understood very well because there is no clear definition of both the terms and there is no universal agreement upon the scientists. Make a simple research: ask one hundred various economists to make a distinction between the terms depression and recession, you would get at least one hundred different answers. In our article we will try to recapitulate the terms and expound how they differentiate in such a way that almost all scientists would agree with.

    First of all we will tell you about the newspaper definition of recession. Its standard newspaper definition sounds like that “a recession is a decline in the Gross Domestic Product (GDP) for two or more consecutive quarters.” However, this definition is not approved by the majority of economists that can be explained by means of two major reasons. First of all, the newspaper formualtion does not take into account other economic changes such as alterations in the consumer confidence or in unemployment rate. Secondly, if to use quarterly data defining the recession, the newspaper definition of recession makes it difficult to emphasize the beginning and the end of a recession. As a result this approach will not detect the recession with the duration of ten months or even less.

    Then we will turn to the Business Cycle Dating Committee (BCDC) Definition of the recession. The BCDC at the National Bureau of Economic Research (NBER) firstly defines the quantity of business activity in the economy with the help of such aspects as industrial production, employment, wholesale-retail sales as well as real income. The committee gives the following definition of the recession: “the time when business activity has reached its peak and starts to fall until the time when business activity bottoms out.” When the business activity begins to go up again it is defined as an expansionary period. According to this definition, the duration of an average recession is about a year. It is also difficult to define the depression. Before the Great Depression started in 1930s, any softening of economy in any economic activity was called a depression. The notion recession was made up to evolved in this period in order to distinguish such periods as the 1930s from smaller economic slacks that happened in 1910 and 1913. It tends to give not difficult definition of a depression as a recession that continues longer and has a larger diminution in business activity. So what is the distinction between the recession and the depression?

    We can determine it only in a practical way looking at the alterations in the Gross Domestic Product. Usually a depression is any economic slowdown where real GDP falls by more than 10 percent. A recession is not so severe; an economic downturn in it is less. By this criterion, the last depression in the USA was during the period of May 1937 to June 1938, where real GDP declined up to 18.2 percent. If to use this method then the Great Depression of the 1930s can be defined as two individual incidents: an extremely rigid depression that occurred from August 1929 to March 1933 where real GDP dropped by almost 33 percent then was a period of recovery an later another less ascetic depression of 1937-38 happened. But one should note that the USA did not have a depression in the post-bellum period. But the worst recession for the last 60 years was from November 1973 to March 1975, when real GDP dropped by 4.9 percent.

    Mental Traumas and Job Recession

    In the present economic instability the cases of recession are not a surprise for anyone. Very often these traumatic situations can cause a shock and having hard time, when negative experience does not let to solve everyday actual problem with proper sobriety. But psychologists studied this problem long ago and if we are aware of what is happening we can get over the trauma easier.

    Phase 1. – Phase of uncertainty and shock. This usually happens when the job loss happened unexpectedly (because of staff recession, quarrel with leaders etc). What is more aggravating in this case is that being depressed and frightened, the person becomes even more exposed to illnesses and various unpleasant situations.

    Advice: Try to keep a philosophical state of mind. Even if this unpleasant situation has happened to you, try to keep equanimity and understand that situations of this kind do happen but life continues.

    Phase 2. – This phase is characterized by general subjective facilitation and psychological adaptation to the situation. The person starts perceiving the situations more clearly, starts enjoying free time, the fact that there is no need to bear traffic jams during rush hours and to get up early. Looking for a job at this phase results to be more efficient than in the previous one – self-esteem is restored and the necessary mental balance is reestablished.

    But sometimes stressful situation does not pass so easily and then the trauma goes on to its next phase.

    Phase 3. – The phase of general aggravating. If a person has remained unemployed for 6-7 months, his financial and social situation becomes worse. Especially destructive are constant misfortunes when the person finds out some vacancies and then fails to get them for one reason or another. The range of interests reduces as well as general activity, and the remaining energy for overcoming the situation becomes less and less.

    Phase 4. – Phase of helplessness and reconciliation with the present situation, which can be noticed even if there are no material problems (when the person gets dole or pension). The state of apathy grows with every day and the absence of minimum hope to find a job brings to the total loss of hope. Getting out of the habit to work intensively the person looks for excuses not to look for a new job, to come late for interviews etc. The sooner such destructive behavior is noticed – the better it is.

    Ways Out from the Vicious Circle

    Friends

    Very often people, getting into a difficult situation start avoiding those who can help them and become very reserved or ashamed of what happens to him. But emotional support from the side of your relatives, friends and acquaintances can become a real remedy.

    Social services

    Social services can render you psychological support as well as help to find some temporal job. Having a casual job due to the psychological studies reduces depression risk a lot. Minimal economical and mental stability prepares the base for a new job search.

    Mental Self-Control

    Try to stop rolling negative scenarios in your head. Be positive. Try to forget about your misfortunes and outline the advantages of your present situation. Think about possible solutions for the future progress.

    US GDP Definiton & Formula

    The gross domestic product (GDP) or gross domestic income (GDI) is one of the measures of national income and output for a given country’s economy. GDP is defined as the total market value of all final goods and services produced within the country in a given period of time (usually a calendar year). It is also considered the sum of a value added at every stage of production (the intermediate stages) of all final goods and services produced within a country in a given period of time, and it is given a money value.
    The most common approach to measuring and understanding GDP is the expenditure method:

    GDP = consumption + gross investment + government spending + (exports − imports), or, GDP = C + I + G + (X-M).