If a Recession is Good, a Depression will be Great!

Just came across this older article about Seven Reasons to Welcome a Recession over at Yahoo Finance. I guess this article applies to those with recession-proof jobs. And to those that did not over indulge during the bubble. And those who were financially prudent but have decided that they will be spendthrifts now the the recession has started. (Note the Yeahs are sarcastic - it is not an agreement with the article.)

Those who bought homes looking to flip them for a quick profit and those who took out huge loans that they couldn't afford to pay will look at a recession with fear, but a recession should have little meaning for those who bought a home with the purpose of living in it for a long time.

Recessions are usually short-lived, and the housing market should recover long before most people are planning to sell their house.

For those who had been unable to afford a house because of soaring prices in the past few years, a recession is a golden opportunity. It brings housing prices down to more affordable levels. That means that many people who wanted to buy a house will be able to purchase one.

Recessions are also a good time to look for investment properties or vacation homes if either had been in consideration.

A recession gives anyone looking for quality housing a lot more bang for their buck than when the economy is flying high. Being able to purchase a quality house at an affordable price can greatly increase a person's net worth in the long run.

Yeah - with the recession house prices are back to affordable rates. Forget about the people who bought during the peak and the hundreds of thousands the average bubble investor lost. Investment properties - yeah foreclosures make those investments cheaper. Funny there is no caution to wait until we have reached the housing bottom and the tide is beginning to turn.

In the attempt to ward off a recession, the Federal Reserve has made interest rates extremely low, resulting in more affordable loans for those who are in the market to purchase a house.

While these rates may not be available throughout the entire recession if inflation continues to rise, the rates will be around as long as the Fed can use them to ease the recession. Taking advantage of these low rates along with lower housing prices can truly make housing a deal.

And you could save even more by using a teaser rate or an Option ARM. Yeah!

As the economy sours and people buy less and less, stores need to provide better deals and discounts to attract consumers to their doors. This can mean steep discounts through sales and promotions, as well as financing that allows consumers to pay no interest over long periods of time.

These deals are not limited to the retail stores. It also means that there are great deals in the second-hand markets, since there are more people trying to sell and fewer people looking to buy. If you are an investor in collectibles and know them well, you can often buy collectibles at steep discounts during a recession that can be turned into a healthy profit when the economy recovers. For those who have saved money waiting for good deals, a recession is a great time to find those deals.

Or your local stores go bankrupt and now you have to travel 25 miles each way with gas a $5.09/gallon. Good advice - be frugal during the bubble and a spendthrift during the recession. By all the collectibles and brick-a-brack you can find - it is cheaper now since people are selling them to buy their next meal. Yeah!

While everyone is taking their money out of the market, hard economic times can be a great time to pick up stocks on the cheap when you look at them as long-term investments. Consumer stocks for large, stable companies such as Proctor & Gamble that provide necessities such as soap and toilet paper will do well no matter what the economic conditions.

Recessions can be a great time to pick up undervalued stocks if you know what you're doing. That can greatly improve your net worth when the stock market recovers.

And just make sure you use a stable investment bank like Bear Sterns - whoops. Wonder if now is the time to invest in the local dollar stores.

During times of recession, most people don't think about traveling. For this exact reason, traveling can be a great deal when the economy is shaky. Lack of demand results in excess inventory, which forces hotels and other related travel industries to lower their prices. It also means a greater inventory to choose from and the ability to bargain for upgrades and other perks. That dream vacation that you have always wanted to take can be a lot more affordable during a recession, when travel related industries are begging for your business.

Don't worry that the flight you booked is only 1/4 booked - it won't be cancelled. And you can have the hotel all to yourselves. Yesterday there was an add for a special to Universal Studios Florida - right in time for peak-summer travel season. Yeah!

When things look like they are going to get a bit tougher, people begin to look at their personal finances a bit more closely and start to trim some of the fat. They look at ways that their money can be better spent and how they can get more for each dollar that they do spend. They pad their emergency fund a bit more and don't spend quite as freely as they do during times of rapid growth. This trimming of the fat is a good exercise that can help you see the important financial goals that you want to achieve and, by doing so, help you reach them more quickly.

So let me get the straight - streamline your finances, but invest in a house, buy up those collectibles, go on great vacations, buy up all those consumer products now that they have been discounted, and buy some of the stocks from large, stable companies. Live large but trim the waste.

If you have a good credit rating, you are in a position to get extra perks from your credit-card company. Credit-card companies see higher delinquency payment rates during a recession, and it becomes even more important for them to keep their best customers. That gives you extra leverage to ask favors from them, such as having your interest rates lowered and annual fees waived.

While most people will look at a recession with fear and uneasiness, it's important to also realize that it's an opportunity to get some great deals and improve your personal finances. Taking advantage will allow you to reap greater benefits from all those dollars you have saved.

This author would have loved the penny auctions during the Great Depression. Just wait until people start touting those deals.