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What the Financial Crisis Means for Spam, Psychics, Hosiery and More

January 06, 2009 | 45,722 views

finances, crisis, economy, obama, bailout, future

It’s hard to find anything which has not been affected by the current financial crisis. Here are some examples of what the recession means for specific things.

1. Spam

Business is booming for meat substitute Spam. Though Hormel’s share price has fallen with the overall market, Spam sales are soaring as the economic crisis leaves consumers strapped for cash. Spam was invented during the Great Depression and became a staple for Allied troops overseas in the 1940’s.

2. Marriage and Divorce

It appears that divorces may have slowed down since the financial crisis began. Despite most arguments being over financial issues, it may just be too expensive to pay the legal fees of a divorce and support two households. During the Great Depression, divorce rates dropped sharply, though they picked back up immediately thereafter.

3. Recycling

The plunge in commodity prices has taken a toll on recyclers -- the whole movement may come to a halt as oil and metal prices fall. Used newspaper, used cardboard, and scrap metal prices have also seen a drop, in part due to dwindling home construction and slower automobile production. In the UK entire city councils are abandoning their recycling efforts, as they are no longer economically feasible.

4. Psychics

Psychics, astrologers, palm readers and “professional advice-givers” say business is booming as clients come to them seeking financial guidance. Clients will typically pay $75 to $1000 for an hour’s worth of insight.

5. Holiday Parties

Companies are cutting back on their holiday galas. ABC News announced the cancellation of its annual celebration. American Express did the same, and cancelled 2009’s celebration as well. Party planners say that their corporate holiday party numbers will be off more than 10 percent this year compared to last.

6. Used Car Sales

The used car business is flourishing. Specifically, used car companies that offer buy-here/pay-here financing for lower credit individuals who have been locked out of traditional lending. But it may be a good time to buy new Car dealers are desperate to get rid of inventory and are offering invoice and below invoice prices. Look for dealers that have a lot of inventory, because they’ll likely offer the best deals.

7. Iceland Tourism

Once an economic success story, this small country is now bankrupt. Its three largest banks were oversized and highly leveraged, and seemed ready for collapse in early October. Iceland’s currency, the krona, is essentially valueless, and foreign trade has come to a halt. But tourism appears to be on the rise. Airfare search engines report a 400 percent increase in Iceland flight searches. A recent search of round-trip flights from New York found tickets at a record low of $471.

8. College Endowments

Since many college endowments are invested in alternative asset classes, which have lost value, they’re seeing unprecedented losses. Many college and university endowments are projected to have decreased by 30 percent this fiscal year. For Harvard, that may mean an $11 billion drop. That may mean a decrease in financial aid.

9. Lipstick & Hosiery Sales

The Lipstick Indicator is an economic theory proposed by Leonard Lauder, the chairman of Estée Lauder Companies. The theory states that a direct relation exists between rising sales in tubes of lipstick and a falling financial market; the worse the economy, the more women indulge in small purchases like $10 tubes of lipstick. There are conflicting reports as to whether Lauder’s theory is holding up this downturn. But hosiery sales rose 2.3 percent this year, with Spanx seeing a 77 percent increase in sales compared to last year.

10. NASCAR

Very few sports have been hit harder by the economic crisis than NASCAR. From ticket sales to souvenir sales to team sponsorship from large companies, racing is reeling. The average NASCAR team relies on corporate sponsors for 80 percent of its budget. And many of those corporate sponsors are facing high-profile hard times of their own. As a result, some NASCAR teams, including Chip Ganassi Racing and Dale Earnhardt Inc., have merged in an attempt to attract corporate sponsors.

11. Personal Maintenance

According to the International Health, Racquet and Sportsclub Association, gym memberships have been on the decline since 2007. And there’s no sign that these former gym rats are instead opting for cosmetic surgery -- 53 percent of plastic surgeons say business has slowed.

12. Sex and Sex Addiction

The financial crisis just might spark a baby boom. According to the Telegraph, sales of sex toys, pregnancy tests, maternity clothes, and baby equipment are soaring. But that’s not the only place sex may have increased. Jonathan Alpert, a Manhattan psychotherapist, has seen a big jump in the number of Wall Street workers who seek help for sex addictions. Apparently, the economic crisis has sparked “maladaptive coping mechanisms” among bankers, according to Jodi Conway, a sex addiction therapist in New Jersey.

 

Dr. Mercola's Comments:

Although I remain hopeful and have great respect for President-elect Obama, I firmly believe we have not glimpsed the bottom of the economic abyss yet, nor is the United States out of the woods.

Unfortunately, financial bubbles have become the norm rather than the occasional fluke, and we’re paying the price for greed run amok, with little or no appropriate regulatory oversight.

These financial bubbles are a shared speculative hallucination, followed by a crash, and then a depression. It’s important to realize that they are in fact manufactured -- by government, finance, and various industries. There’s nothing “natural” about them and the subsequent economic downturns in their wake.

The dot-com crash in the early years of 2000 should have been followed by decades of financial soul-searching. But lo and behold, even before the old bubble had fully deflated, the housing bubble began.

Unfortunately, the United States runs on this type of consumerism. Borrowing money to buy more stuff, including dwellings you couldn’t possibly afford even in a good year, has been the one thing that has kept this country going.

Making matters worse, virtually all “remedies” are still aimed at keeping this suicidal mentality going.  Hence, unless we radically change course, we are more or less doomed to experience many more booms and busts, for without them the U.S. economy disintegrates. 

The business cycle has been replaced with the bubble cycle. But sooner or later the natural order of things must be reestablished. You can’t keep spending more than you earn indefinitely. And as a country, the refusal to face this fundamental fact is the driving force behind the absolute destruction of the U.S. currency.

Despite the hurrahs and the backslapping taking place in the corridors of our government, all of the current bailouts and stimulus packages will eventually only make our problems worse. 

Because the truth is, the well of fictional wealth is drying up.

What’s Coming Next?

One in ten mortgage holders is now behind on their payments, more than ever before in history. But a second wave of Americans on the verge of defaulting on their home mortgage is approaching with alarming speed.

Delinquencies among prime loan holders has doubled in the past year alone. Banks are making it harder for people to refinance, especially for people with adjustable rate mortgages. Meanwhile home sales have stalled, and more people are losing jobs and are on the financial brink.

Some forecasters are predicting that we’ll begin to see an acceleration of the mortgage crisis in April of 2009, lasting through January of 2010. Hundreds of thousands of borrowers will be seeing their ARMs adjusting upward at that time, and many will fall delinquent.

Clearly, the economic crisis is far from over.

But there is yet another financial abyss looming, of far greater concern than our current woes.

A mind-boggling $1 quadrillion (1,000,000,000,000,000) is held globally in exotic financial instruments called derivatives. Derivatives are financial fictions; imaginary money created by leveraging real assets hundreds of times. 

And although the mainstream media is silent on this issue, the U.S. mortgage meltdown, which quickly rippled through the entire international economy structure, also threatens to set off a chain reaction that could burn its way through this fictional-money-bubble.

What happens then is anyone’s guess. But I don’t think anyone is fully prepared to deal with the ramifications of an international meltdown of that magnitude.

Hello, Your Life is STILL Waiting!

Now, as depressing as this all sounds, I firmly believe there is a silver lining waiting for all those who chose to wake up from the collective slumber.

This is a time of great challenges; hence it’s also a time for great transformation, if you face the facts squarely, and opt for constructive change rather than sticking your head in the sand, hoping for another illusion to come along and rescue you, no matter how temporarily.

Your best bet is to arm yourself with a toolkit for managing various types of stress, so that you can respond creatively to the changing times. If you learn how to do this now, imagine how much better off you’ll be later on!

For many, the time is ripe to review their relationship with money, and to reassess their value systems. It’s also a wonderful opportunity to reevaluate the way you live, in terms of how you nourish yourself – physically, mentally, emotionally, and spiritually.

A return to sustainable basics, in every respect of the word, and in every aspect of life, may be one of the greatest hidden gifts inherent in these tumultuous times.

1, 2, 3, Get Proactive!

No matter who you are, or how much money you have, financial stresses can strike at any time, and can deliver incapacitating blows if you’ve consistently refused to prepare. I’m willing to bet even some of the richest men in the world are losing a fair amount of sleep these days, as billionaires are now reduced to millionaires faster than ever.

Step one to regain some financial peace? Take back control over your personal finances and learn to live within your means.

Zen Habits has organized a list of all their best money articles as a resource for anyone trying to track finances, get out of debt, save money, or just set up a financial system that works for their own lives. A good starting point for getting out of debt is to read the 12-step guide for getting out of debt.

I have also compiled a list of sites that offer free online tools and services to help consumers save money and manage it wisely. Go to 9 Sites That Help With Everyday Budgeting.

Now, how do you deal with what some call “stinking thinking?” You know, those negative thoughts that keep creeping in, despite repeated efforts to keep them at bay?

Part of staying grounded is being in control of your thinking so that you can maintain a positive outlook, even in negative circumstances. A corollary to this is minimizing your fear. Once you step into fear, you are thinking about things you are afraid of.  Therefore, you are putting your intention on what you don't want, which draws more of that to you.

For example, being afraid of the economy does nothing but manifest more bad economy. This is clearly something you want to avoid!

There are tools that can help you to focus your mind on things you want more of in your life, so that you spend less time thinking about the negatives.

For the past year I have participated in a coaching program developed by Dan Sullivan that has been very useful to me. He has an audio page, available to anyone who wishes to use it, which provides several excellent 5-minute exercises that can help shift your perspective.

Gratitude for what you DO have is one of the best antidotes for feelings of lack. I encourage you to visit Dan’s audio page and try out his first exercise, which will help you connect with feelings of gratitude.

Exercises such as these serve to decrease fear, increase peace and calm, and benefit you in many ways, physical as well as mental. I have written many articles about the interconnectedness of mind and body. Stressing over your financial situation is a perfect example of when you must take care of your mind, in order to take care of your body.


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