“Are we in a Recession?” – It this the right question?

Hmm….I don’t think Main Street is asking that question anymore. How about this - what measures do we have to take during Recession? – Is this the correct question? – YES!!!!

By now my readers got the answer on whether we are in a recession or not, Definition of Recession – “Some economists and journalists define a recession as two consecutive quarters (three-month financial periods in the year) in which the gross domestic product (GDP) decreases.” (Source – Internet), but I believe recession definition is much more beyond than looking at GDP numbers that is calculated every 3-months. We might be already in a recession, but our “economists” cannot confirm right now because GDP numbers are not in yet. Let’s look at current market – Increase in unemployment (Oct, 2006: 4.4%, now Oct, 2008: 6.5%. Source – “U.S Department of Labor”), Consumer Price Index is negative (Oct, 2005: 0.2%, now Oct, 2008: -0.1%. Source – “U.S Department of Labor”), Auto sales are down, Housing industry is down, Oil demand is low, Big Companies are disappearing – looking at this disappointing and heart breaking numbers, its time to redefine Recession.

I came-up with a list of recommendations that can help us to survive during this tough period.

Cut down your expenses – Buy things that you need the most and avoid unnecessary expenses.
Cash is God – Always keep liquid cash in hand; make sure you have sufficient cash to survive for next 8-12months without a job.
Bank accounts – I “strongly” recommend to close your accounts in banks that are not protected by FDIC (Federal Deposit Insurance Corporation). FDIC provides/protects consumer account deposits that are less than or equal to $100,000, anything more than that amount is not insured. Move your extra savings into another FDIC insured bank so that in case your bank is out of business you are still protected.
Credit Card Payments – Don’t pay your credit cards in full amounts; make sure you have enough cash in your hands all the time. And also, avoid late payments.
Online shopping –Online shopping provides a good relief during this holiday season. Its offers a wide variety of products, competitive price and free shipping options.
Gift Cards – Almost every retailer offer Gift Cards, but many are closing down or at the verge of collapse. Before that happens please use these gift cards completely.

As the old joke goes: "When your neighbor loses his job, it is called an economic slowdown. When you lose your job, it is a recession. But when an economist loses his job, it becomes a depression. Economists who ignore the recent rise in unemployment deserve to lose their jobs." Good Luck and Play Safe!