My Recession Signal

Way back in April of 2009 I posted a piece about the economic conditions at that time and how I came up with my own signal. I wanted to revisit that signal and see if it is giving any indications of the current time. Here below you can see the same image I took at that time.

April 2009

As we can see, the cold container was packed with all sorts of items. I revisited our signal in September 2009. You can see that from the image below.

September 2009

As you can see things appeared to have improved but not by much. So I decided that it was too preposterous to call an end of recession at that time.So three-four months later I took the picture again. Here is the image of the same refrigerator.

January 2010
Voila!! Santa Claus must have rained in a lot of gifts during 2009 holiday season time. Looks like people are spending more outside on food. So here it is, our recession indicator is showing that the Recession is over.

But as anyone can tell, this is not an exact science. It only indicates the situation at my work place, because the uncertainty that we(my colleagues and myself at work) went through in mid 2009(there were some layoffs and re-org) is over and people at my work place are more comfortable. We are seeing more relaxed spending habits when it comes to eating lunch. There is no way I can say the same situation exists across the city, leave alone across the country. Also I did not record the time when I took the pictures. It is important because, the image can tell a different story based on when it was taken, like post-lunch and pre-lunch. Pre-lunch can tell we are in recession and post-lunch can tell we are out of recession and all this signal switch in just one day and few hours.

So far I have based my views on visual observations. For an index to have any meaningful value, these observations have to be quantified. Quantification of this signal to make up an index opens a slew of problems. Like what and how do you quantify? Do you take the number of items? This has many problems like one day the items can mostly be beverages and the number of items will be lot more than a day when lunch bags are more. Should we consider the volume occupied? It poses a very huge problem of measuring the volume of items occupied. The best measure is to find how many people are bringing their lunch to work from home. But this involves conducting a survey of the people working. On and on we can go with the shortcomings!

If the above mentioned trivial shortcomings of making the index a scientific quantifiable value are cleared, this signal does have some wings. Just like Case-Shiller Home Price Index became popular during the recent/current recession, similarly my own index based on my recessional signal will become popular. I will get to be on TV and write books about it. hmmm....

My holiday season resolution - so easy a cave man can do it.

Holiday season is the worst time of the year for me. No, I am not a cynic, scrooge like person who hates holidays and the merriment that goes around in the society. But it is that part of year where I indulge myself in freeloading myself with junk. The fact that these junkies are right there in front of you and that they are free only makes it that much easier. If they are not in the work kitchen, they appear in the form of the multiple holiday lunch/dinner invitations you get to attend as part of work and social invitations. I don't mind an occasional indulgence, but these multiple indulgence opportunities are packed so close to one another within a short period of time of about six to seven weeks, that I end up causing increased burden on my scale. This burden on my scale causes guilt that takes the next six, seven months or even longer life style changes to lose those pounds off. I managed to lose those pounds off so far but they have long term repercussions, like increase in cholesterol etc and slowing metabolism with age only increases the difficulty of losing them.

This holiday season I decided to stay away from junk food. But junk food is a very generic term. I have become a fan of checklists recently. The checklist bug bit me via Atul Gawande's article in New Yorker titled well - The Checklist. So I made a checklist of items to make my resolution concrete and this list is as follows.
1. Cookies
2. Brownies
3. Fudges
4. Donuts
5. Muffins
6. Chocolates
7. Cakes
8. Candies
9. Dressings on Salads
10.Pop Corn

For a sweet toothed weak willed human like me, the list appeared like I was David going against Goliath. Having made up my mind I carried the list safely in my pocket where ever I went lest I forget what was on the list that I was to not eat. Mind you that this list was only meant for work and social gatherings, and not for food at home though I gave strict instructions to my wife to not bake any cakes or pies during this period. While I had defined the list so clearly, the other parameter that needed definition was the duration itself. The period was to start from 11/23/2009 to 1/10/2010. The begin date is a Monday on the week of the Thanksgiving holiday and the end date is my own arbitrary date as when the holidays goodies will stop showing up at work by the fairy from the sugar land. That's a total of 49 days and I was confident I could hold my resolve.

I prepared myself for the battle that was to come with Goliath(s).
Week One: Goliath did not show up. I win this round.
Week Two: Looks like Goliath is hiding. He is coming anytime soon. May be next week. Two down and Five to go.
Week Three: Time of reckoning. The event was a department lunch. There were many of the items on the list that I made up earlier, but in far fewer forms compared to last year. I stayed away from all the distractions that appeared on the lunch table. A colleague of mine came over to talk to me and said that she made the lemon seven-up cake that I liked. During a previous team lunch, I had really liked the cake. If I like something I go overboard with the compliments. So she said she thought about making some cookies, but remembered how much I and others had liked the Lemon Seven-Up cake and decided to bake the cake instead. Now I could say no. I took a piece of the delicious cake, partly due to my weakness for this cake and partly due to my desire to be nice.
Week Four: After my broken resolve during Week Four, I decided to change the rules a little bit. I took the baseball analogy 'Three strikes and you are out' - I allowed myself three infringements during this period. I had already committed an infringement during Week four and I have two more left. But surprisingly nothing else showed up during this week. There were no more lunch events at work and no goodies from vendors either. Last year I had about four lunch invitations that I attended by the end of the holiday season. This year so far just one.
Week Five: Nothing this week. Just two more to go now.
Week Six: After five weeks long unnecessary wait, there appeared in the kitchen a tiny green tin box with even tinier butter cookies. Since I had given myself three infringements and knowing by now that there are only two weeks to go, I treated myself to two cookies. I later found out that those were home made cookies by another colleague of mine. They were tasty and were loaded with butter. This led to a bet during a conversation with another colleague who was also trying to stay from junk to lose weight. I said that two of them together will not be more than 80 calories, and my colleague argued that they were would be about 180 calories as they were butter cookies. We went scientific over it. We found that the paper plate weighed 0.15 ounce and the plate with 4 cookies weighed 1.14 oz, so the net weight of cookies came to around 0.96 oz. My Fitness Pal tells me that 1 oz of butter cookies is 132 calories. So that's 132 calories for 4 cookies and simple math tells that's 66 calories for 2 cookies. Now I am clearly delusional over holiday season sugar deprivation.
Week Seven: Week seven has just begun and I am sure it will be another downer with no fight in sight. With one more infringement allowed, I am quite confident that I can sail through this week with having to use my third life line.

It is clear that the economy has a direct relation on reduced holiday spending by companies and individuals. Though the stock market has been showing signs of improvement for some time, companies more so than individuals are holding on their purse strings tight. It is about time I revisit my recession indicator. Hopefully 2010 will be better off and will give me a better fight that 2009. So far my scale has not moved far to the right and I am happy about it. If things go well, I might carry this resolution into the next holiday season.

Happy New Year to you all.

Sign Of Times

Times have changed definitely in the last year or so. I have been reading a lot of stories on how the current crisis has affected people's behavior and how businesses are struggling. Below are some links to news that show the signs of our current times.

A 99cent store goes bust by a 98cent store across the street. More Here.
Increase in Vasectomies as couples find it difficult to raise kids. More here.
Couples putting off their divorces to stave off tough times. More here.
Counties charging fees to respond to accidents to cover shrinking budgets. More here.
Driving Tickets on the rise as municipalities try to raise revenue. More here.
Increase in adults moving in with parents/relatives on loss of jobs/homes. More here.
Doctors see increase in patients seeking help with anxiety and stress. More here.

The above are news clipping from here and there. On a personal level, the sign that times have changed can be seen in the picture below. A old saying says 'A picture is worth a thousand words'.



This is the picture of the refrigerator at my work that I took recently. I wish I had taken a picture of it a year ago. This would have conveyed the story I am trying to make. If few six, seven digit earning analysts could predict that the house prices can go down causing this bubble, how could I predict that there was a story in my work refrigerator. For lack of a picture, I will resort to words(in less than thousand words).

Nothing has changed, my location is same and the refrigerator at work is the same old one. But just a year or year and half ago, half of the refrigerator would be empty. There were very few people that were bringing food from home. Nowadays, almost everyone I know around me are bringing home made food or left overs for lunch.

Lunch is not the only thing that is occupying the space. Breakfast too is being brought from home. The fridge is being stacked with all kinds of 1/2 gallon milk cartons - non fat, low fat. 2%, whole, Soy-milk, over the moon(milk that tastes like whole milk but is low fat milk). My colleagues are bringing breakfast from home or buying them at a retailer like Trader Joe's, Whole foods etc in bulk, instead of on a daily basis at the cafeteria or at any retailer on their way to work(Dunkin Donuts, Wawa and Starbucks or roadside vendor close to work were most popular).

I am not sure if this change to more prudent living is here to stay. I believe, it is not from a conscious thought process that frugal living is good for them. it has to do with the insecurity brought over by the bad economy. There are wild speculations that this recession has created a new paradigm, a change in the way people look at their way of living and how they spend money. Some of these analysts are worried that the economy will see a lot more savings, thereby causing the recession to recover slower.

I am not sure about that latter part. But savings need to be increased a lot more to have a stable, secure households to which they can fall back on in times of crisis. The current model of consumer spending driven economy has produced more recessions at a alarming increasing frequency. Back in 2000 they used to tell that economy goes in cycle and a recession comes once ever decade or so. The period between the current and previous recession is only 4 years. This increased frequency of uncertainty is definitely not a good sign.