Reasons To Smile During Recession Time

They say that “excess of anything is harmful” and that “whatever goes up must come down“. So, if you apply these wise sayings to the economic boom that the world witnessed for the past few years it would seem that the current economic recession is just a correction and would prove to be good for the economy in the long run. As per this article on TIME, the recession has taught many a U.S. company one important fact: the boom had larded corporate muscle with fat. Now, in working off the fat, businessmen are finding some of the benefits of adversity. These go far beyond merely trimming payrolls and such obvious economies as light, telephone and office-supply bills.

As per the Economist, “central banks must stop recessions from turning into deep depressions. But it may be wrong to prevent them altogether”. Wrong to prevent a recession? Why? Because recessions are a natural and necessary part of the business cycle. So you might as well consider yourself to be lucky to be alive in this era which has witnessed both the ends of a business cycle, super-boom and super-bust. While it’s very easy to be happy during boom times, let’s see how one can feel the same during recession times as well:

On The Business Front

1. Undervalued stocks and bonds: It’s a bad to time for the market and it’s possible stocks in general will go down more this year. So don’t panic but smile because times like these are perfect opportunities for long-term investors to pick some good values company by company.
2. Lower interest rates: It seems likely that if the Reserve Banks of many countries lower the federal funds target interest rate, opportunities are available for those with good credit ratings to borrow cash as needed.
3. Falling house prices: Well, at the moment, there are more people trying to sell homes then there are buyers. This inequity between supply and demand means that in order to sell houses, prices must fall.
4. A more down to earth US of A: America has been living way beyond its means for years: A recession will cut back revenues at all levels of government and cutbacks will encourage balanced budgeting.
5. A wake up call to short-time investors: A recession will wake up short-term investors playing the market. In bull markets traders ride the rising tide, gaining false confidence that they’re financial geniuses. Downturns bruise egos but encourage rational long-term strategies.
6. Correction in CEO Salaries: It is believed that CEO compensation today is about five hundred times the salaries of workers, compared with about 40 times a generation ago. The recession would help to correct this wide disparity.

On The Personal Front

1. Global warming will slow down or even stop: Since people would have less money than before they would drive and fly less thus bringing down the level of global warming.
2. World population will drop: Raising a child involves a lot of expenditure so couples would think harder before deciding to have a child. Thus may lead to temporary decline in World population.
3. People will finally lose weight and pay attention to their health: Since consumerism would decrease and people would pay more attention to their savings, they would eat healthier foods and take to various forms of exercise that don’t cost much, thus becoming healthier.
4. Roads will be less congested: With high unemployment and no money for vacations, roads will be clearer, with fewer traffic jams.
5. More educated population: During recession time, people tend to go to school. Maybe just community college, distance learning, or freebie classes, but people will learn all sorts of new stuff.
6. More time to invest in yourself: When the economy is down and the growth opportunities are less people invest a lot of time in themselves. As Six Apart CEO Chris Alden says “When you don’t know where else to invest, you invest in yourself.” . During recession time people blog more and try to learn stuff that they’ve been yearning to learn for a long time.

Sources: 8 Benefits to a Recession or Down Market, 17 reasons America needs a recession, Top 10 Benefits of Global Recession