Additional casualties and signs of economic recession: laid off bloggers and your favorite web sites for sale.
Do you see what’s in store for you next year? Well, I’ve peeked at my crystal ball and can see the same thing you’re all seeing, an ugly 2009 as the economy continues to contract. Still no relief in sight (or maybe just a little, with Obama stepping in with a pep talk, an action plan) and the promise that each of us will receive a coveted stimulus check in the form of a tax cut.
Still, the tremors reverberate in the blogosphere.
More and more bloggers are reporting that they’ve been laid off, or are afraid that they will be. Some of the ones I know:
- Trent Lapinski’s Blog: Dear Barak Obama, I’m 22 I Just Got Laid Off, and I Can’t Afford College – Please Help (ugh! This was hard to read.)
- Amateur Asset Allocator: I Was Laid Off Yesterday
- Finance Your Life: Job Security: I Am Safe….Right?
- Shaun’s Real Estate Adventures: This is Why I Want Passive Income
- The Smart Passive Income Blog: Nevermind. I Just Got Laid Off
Judging by the dates on these posts, changes have been coming fast and quick! I’ve also mentioned that TechCrunch has this layoff tracker while Gawker (the online media name that bloggers look up to 😉 ) is selling off The Consumerist, and Valleywag (what!? one less Silicon Valley blog?) and trimming its staff. You can see how the online world has been taking its hits.
The trends have been reflecting reality for a while now, so when are they announcing that we’re officially in the dog house?
I’ve also talked about how we’re coping with the recession in Silicon Valley, but whatever else I’ve got to say about this can fill a book. Anyway, it’s been the subject of deep conversation between me and my close friends and family these past few weeks.
More Signs of Economic Recession Where I Live
Just to see how widespread the financial pain is, I’ve polled the people I know for their stories and concerns — here are just a few:
- A couple of people I know have been laid off in the last two weeks. These are people who work at smaller companies that are now embarking on cost cutting measures. With the VC spigot closing off, startups that aren’t solvent will be forced to cut back heavily or close down completely. Startups are living on borrowed time. These events are reminiscent of massive layoffs in Silicon Valley in 2000 during the tech bust, so it’s not new to me. I should get used to this happening every 5 to 8 years, I guess.
- Friends of mine who are consultants are experiencing delays in payments. Uh oh. They’ve done the work, but there’s some worry they’ll end up on a long list of creditors waiting to get paid.
- Too close to home! I never thought it would happen, but someone I know pretty well actually is in the process of losing their house. The story is complicated — he was a victim of a drawn out scam that got exposed by the housing downturn. And I’ve heard rumors of acquaintances going on short sales on expensive homes they purchased only a few years ago (and which I had the pleasure of visiting during house-warming parties galore way back when).
- I heard about how there are scores of luxury cars just sitting on Long Beach right now, with no takers. I got this story from a guy who’s well insulated from the crisis because he’s sitting on a huge pile of cash (he’s very conservative with his savings). Yet, he’s concerned about the effect of currency exchange on his international business.
- Some of us self-employed folks are seriously thinking of joining the many out there who’re already chasing what few jobs are around. I read that Cisco’s job listings have dropped by 93% in one week, from many thousands of openings to a trickle of a few hundred.
- I miss “happy” news. Could this be capitulation? Or close?
Break Open Your Emergency Funds
For many whose lives have been viciously upturned by the forces of the economy, it sure feels that this recession isn’t “normal”. But the reality is that this is probably what a “true” recession feels like. The waves of an economic downturn are much like dealing with the effects of an impending tornado. The tornado spares some while it devastates others. You just pray it doesn’t hit your household when it comes, although you can expect it to do a number on your landscape.
This has become a time of emergency for many. Our situation clearly emphasizes the importance of having enough insurance to cover ourselves when such a “disaster” hits — and when I mean insurance, I am referring to emergency funds and enough liquidity to tide you over during the storm. Does this mean we should have at least 1 years’ worth of expenses in cash? Maybe so, especially since nasty recessions can last that long! If you’ve got unemployment benefits covering you for 6 to 9 months plus a one year stash of cash, you could get through this nail-biting ride.
So let’s hunker down in the basement and see if we can ignore the angry winds out there for now. I’m doing it by starting the ball rolling on some portfolio rebalancing efforts (gah!) and selling off investment losers.
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