The World is Yours

Everything is cheap. Today's recession and lack of demand have resulted in declining price levels that may be exploited for long-term financial gain and immediate pleasure. Beyond capital markets, prices for luxury goods, travel, and real estate have all plunged precipitously. Savvy players and consumers have emerged as big kids in the candy store-exploiting the carnage to stockpile assets and memories. The rich will only get richer, as today's bets materialize into large gains amidst tomorrow's inevitable boom times. The commercial turnaround question is not a matter of if, but when. Of course, you must have money to play The Game.

The World is Yours: Everything is Cheap

In recession, the Dow Jones Industrial Average collapsed from a peak of 14164 to 6763 in early 2009. Financials, such as, Washington Mutual, Bear Stearns, Lehman Brothers, and Fannie Mae, were at the focal point of the credit crisis and either transformed dramatically beyond recognition, or faded into oblivion. The credit crisis was associated with systematic risk, or financial system failure. Beyond banking, investors dumped shares of all major industries, as if Great Depression for the economy was inevitable. Panic was the order of the day.

In response, government officials reacted with extraordinary measures. The Federal Reserve Board set a target rate for its overnight lending at 0%. Meanwhile, the White House and treasury leaders coordinated bailout plans by infusing hundreds of billions of dollars into the marketplace. Further, Washington purchased equity stakes within major corporations to foster stability amidst the turmoil. These transactions effectively put stocks back on the mend toward the 11000 mark.

Despite the recovery, stocks still represent good value. Share prices and corporate earnings will recover as the U.S. economy improves. Of course, the very same group of financial stocks that led the decline has emerged to spark the current advance. Ironically, the once beleaguered Citigroup, AIG, and JP Morgan, may now be described as story stocks.

All items are going for cheap-allowing you to live it up, if you choose to do so. Hugo Boss and Canali designer suits are selling for discounts at major department stores. Meanwhile, roundtrip airfare is available between Chicago O'Hare and Mexican resort towns for $200. Seize the day.

The World is Yours: Do You Have a Real Job?

You must pay to seize the day, and Americans are more likely to spend money with the regular income that stable jobs provide. I would advise against heavy consumer spending-without job security and adequate cash reserves. According to the Bureau of Labor Statistics, the U.S. unemployment rate remains stubbornly above 10%. Statistics, however, do lie. Large swaths of our society are underemployed, and one missed paycheck away from complete disaster and destitute homelessness. Do you have a real job-if you are living from check-to-check? Do you have a real job and financial security-if you would be bankrupt by major illness?

This is the dichotomy of economic recession. Everything is cheap and ours for the taking, but nobody has any money.

The World is Yours, Sources:

Bureau of Labor Statistics, U.S. Economy at a Glance, http://www.bls.gov/eag/eag.us.htm

Federal Reserve Board, Purposes and Functions, http://www.federalreserve.gov/pf/pf.htm

FDIC, Scenarios for the Next U.S. Recession, http://www.fdic.gov/bank/analytical/fyi/2006/032306fyi.html