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....

Curse of Sisyphus, Mrs.K Early Retirement and Lessons From Recession

I spoke about the reduction in workforce at my workplace here. The decision has been made and few people on our team were unfortunately on the wrong side of this process. One person on this list was Mrs.K who I was getting to know. I began to think about my own tryst with these kind of events and could only think of Sisyphus. I heard the myth of Sisyphus recently from a good friend of mine while having dinner at MIX.

The very short version of the Curse of Sisyphus goes like this. The story is based on a Greek mythological figure named Sisyphus. He goes about deceiving death and angers the Gods. The Gods curse him for eternity and the punishment was that he would have to push a rock up a mountain and the rock rolls down as soon as it reaches the top. Sisyphus has to go down and push the rock all over again and the cycle repeats. This story is told as a philosophical metaphor for the mechanical life of Human Beings on Earth.

The thoughts going through Sisyphus when the rock rolls down the hill are interpreted by different authors in different ways. Sisyphus must be filled with sorrow and dejected that he has to start all over again. He thinks about the different causes for the rock rolling down and what he can do the next time to prevent it from happening. He even gives up hope of ever trying to push the stone back up on seeing the rock roll down. He gets into denial phase sometimes. But like a mirage his thought process tells him 'I can do this one more time and this will be all over' to give the push a one more try. So he goes back to his routine. The only way out of this is an eventual realization that there is no way out for him and only death can relieve him. But he deceived death and hence he cannot die(This is close to Hindu reincarnation philosophy).

I think we are all replicas of Sisyphus each with a rock to push. The difference is that we are are set in a Matrix like setup where we all see a different mountain. The mountain keeps changing it's shape and size every time the rock rolls down the mountain. We engage in our own rat's race thinking can we push the rock faster than our neighbor, we can push the rocker higher than my friend etc. We have other factors like work and responsibilities shouting in our mind to keep pushing the rock higher and faster. This makes our life even more complex and no time to reach the eventual realization that Sisyphus reached.

I think the economic recession has created a mountain called layoffs and most of us go through this mountain. Mrs. K has her rock at the bottom of the mountain now. I spoke to her few days after she was informed of the company's decision. She was dejected at first, but then she said she was getting tired of the stress of competing in the field of software development. She accrued enough service with the company that she can get Retirement benefits like stipend and lifelong insurance. She is thinking of taking up a less stressful job like a clerical job of some sort. Before that she is going on a vacation to Brazil and Argentina. I was happy that she was taking a break away from all this. I hope that gives her enough time to rethink her life. I wished her good luck and took her out to lunch along with few colleagues at work.

But every event in life has to teach some lessons and this recent episode at work has reinforced some of the lessons that I have learned over time. A good friend of mine has done a good piece( Quick Note on Economic Downturn) about handling life at work during downturns. My lessons that I list below reiterate some of his views. I list my lessons. These are not meant to be preachy, but only as a guiding points for myself to revisit later.
1. Be Professional All The Time
Be nice to your colleagues. Treat them with respect and humility. I believe in Karma, bad behavior during good times get noticed and could be used against you. But saving your job alone should not be the motive, respect should exist for colleagues as they are just human beings trying to do their job and it is also called 'Professionalism'.
2. Show Genuine Interest In Your Colleagues. This will help in understanding their point of view and where they come from. Beware of the thin line between 'Privacy Invasion' and 'Showing Interest'. Some people do lip service to knowing people and can hardly remember the person's name the next time they meet you. Do not be that person. Remember the person's name and how it is pronounced.
3. Do Not Pick Fights.
This is very important especially during downturns. Do not go into heated arguments on certain conflicting points of view and pick easy fights. Everyone is stressed out and conflict with your colleague is the last thing you want. You will be noticed and could easily become a potential target for the headcount reduction.
4. Do Not Judge
Do not be judgmental about a person who lost his job. The person is down in moral and needs some support. A person could lose a job for reason's way beyond his control and skill set. He could be very smart person and very skilled. He is just unlucky by being in a bad company at a wrong time. The company he was working could be in bad state, the department he was working could have been closed. In many cases the employees skill set has very little to do with him losing job in times like now. If you can help the person find a job, do the needful help. It can build your good Karma.

5. Keep Updating Your Skill Set

This will help you give an edge over others and hopefully you will not be considered. Even if the axe grinds on you, the acquired skill set should help you in finding a new job quickly. Remember we can only be prepared, everything else is beyond one's control.
6. Have Avenues to De-Stress
Find something that helps you relax after work. It could be a hobby like reading books, listening to music, gardening, meditation, exercise etc. Anything that helps you to not think about what's going at work helps. A good support system at Home is very important. Talk to friends and family as to whats going on at work. They might not be able to help, but just taking about it helps relieve the tension.
7. Save for the Rainy Day
Saving money during downturns is much more important than during good times. Get into habit of setting aside some money monthly for the rainy day. Have at least a one year emergency fund in your bank. Getting into the habit of saving. Remember what this crisis is all about - Credit. Credit is not good. It might be good for some Institutional Investors but never for regular folks like you and me. Try being away from it if you can. If you can't avoid it(like buying a home) trying limiting it by doing your investigation. Ask around and do the prudent thing. Get the loan with lowest interest rate and highest affordable down payment.