MyMeeku's Blog

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It’s Friday Again : The Rise and Fall of Reccession (Part 1)

Is it economic recession, some areas felt it strong and some may not have an impact , in fact a great opportunity for those trying to pick up real estate in the US or rather is for the world for those with cash. Cash is King now. One can see the effect of recession taking its toll in the US with unemployment soaring and people are losing their job and unable to pay the mortgages. Property are at its lowest with news of US property at 25% of what it was 2 years back, undervalued. Is it at the bottom as opportunist awaits to start buying up the property.  To some , now is the best time to do investment. Start buying and collecting and wait for the boom. But the question is what is your holding power?

As for the Asian counter parts.  i believe the recession in the 90 have sink it’s mark on a lot of Asian , many lost their jobs , had to sell everything they own, I remember incident to the level of  senior executive who had to sell sandwiches to feed the family in Thailand, and even a weekly market “Garage Sale” in open car parks. Asian felt it hard then. This have made them more prepared this round. Once there was a sniff of economic recession coming, all ships were diverted to cost down, with worst case projection, and from the past learning, have kept a lot of rainy days savings to ride through.  So for bargain hunters in Asia, it is not that great impact as one see as the US impact.  An example the landed property are still holding strong, in fact with the interest coming at a incredible low in Asia ( example in M’sia : Base Lending Rate – 2.4 % ). I am actually looking for a landed property or condo to call home but to find I am in competition with property investor. As in any supply and demand rule, the price of property in Malaysia is holding. And having the bitter lesson of the 90ties recession, Asian have the holding power, with these 2 factors , properties in Asia is holding in prices. Bummer for me though.

With human survival instinct, I have observed that during these times of recession that we have new and emerging ways of cash generation. It could have been it was dormant in the economic good times but now it becomes an avenue for  those who lost their job to be self employed or for those who can take voluntary separation packages and be self employed to generate cash to continue the desired life style. To mentioned a few is, unique way of internet marketing, emerging MLM , the amount of folks signing up to learn about financial tool for trading ( Forex, CFD, Options, Stocks, Bonds, commodities) and some even trying to hybrid the Internet Marketing with MLM products for leads. What is sell-able now is Independence. With Robert Kiyosaki words ringing ” If you want to be rich , you need to own a business” as motivation and push factor.  Could be a fear factor for company loosing good employees even to those not targeted to leave but they left out of insecurity.

As for company perspective, how does the company react to this economy? Well we can take it head on and take advantage or cut the fats and ride through the storm focusing on the core business. Take the mobile phone as an example of continuing the refresh rate on their products. Every few months we see new models rolling out. Wouldn’t a traditional method is to lessen the  investment in New Products which incurs  complexity in High Line Item Manufacturing management in relative to mass production of less line item for factory line utilization and optimization thus impacting the operation cost. But in contrary , they take on head on approach, rolling out new models and feature as they recognized the need to change even though in economic tough times tapping the remaining oasis in the desert to emerge the leader when economic recover. To those who retreat the market and change may turn out obsolete in the end.  But to my suprise the buyer still there, yes sales may slow down but the sales are still out there. There are techy die hards that must have the latest and greatest.  Maybe we should give these Companies that is embarking on this strategy the credit of economic recovery as the are stimulating the market isn’t it? For the remaining are hoping that the reserve will ride them through, reducing Staff and compensation working 120% for 80% salary in some cases. But the good news is we are seeing some sign of recovery. In the electronic sector we see volume returning for 2 quarters straight. The first quarter the market was skeptical as doubted if it was true sign of recovery or was it self made by companies having to conservative forecast than normal depleting the Hubs faster, thus creating a vacuum where in actual fact the volume did not go down , just in accuracy of the forecast of worst scenario.  But the Second quarter gave a boost of confidence in the recovery; a light at the end of the tunnel.

July 24, 2009 Posted by | Uncategorized | , , , , | Leave a comment