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TOPIC: Who are the winners in times of recession?

Who are the winners in times of recession? 4 years 2 weeks ago #2954

I had a discussion with friends yesterday waiting for our train from Shanghai back to Nanjing and we discussed who the winners are of a recession after viewing an article on the internet from the China daily about the China housing bubble, which is likely to burst in 2011 and which will make all people happy who are wanting to buy housing and who haven't been able to afford it and who leaves people with buildings for investment sit in the dry.
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Re: Who are the winners in times of recession? 4 years 2 weeks ago #2955

here is a small list:
pawnshops, raipairshops, fastfood chains (apparently they are doing really well in the U.S.), second hand shops ...
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Re: Who are the winners in times of recession? 4 years 2 weeks ago #2956

Shady employers will reap benefits also: with too many candidates and not enough jobs, shady employers can pay tiny wages, and they also get more flexibility to abuse their employees, who fear losing their job (no matter how shitty it is) in a tough job market.
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Re: Who are the winners in times of recession? 4 years 2 weeks ago #2964

In principle nearly every business that was not part of the industry that is now declining...yeah and lawyers
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Re: Who are the winners in times of recession? 4 years 2 weeks ago #2975

burrial companies ... not sure what they are called, but the companies that take care of the body when someone dies ...
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Re: Who are the winners in times of recession? 4 years 2 weeks ago #2978

Strangely enough, cosmetics companies are quite recession proof, apparantly since women compete harder for the few guys out there that still have a job.

Family Counseling, since financial troubles strain relationships

Education and Training, as many laid off people are looking for career changes

Lotteries, Alcohol and Tobacco are recessionproof as well, as people still look for some comfort, but can't afford expensive dinners or electronic gadgets. But a beer, a chocolate bar, or a pack of cigs are still affordable. Movies are also not so expensive, so ticket sales will remain strong.
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Last Edit: 4 years 2 weeks ago by Erik749.
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Re:Who are the winners in times of recession? 4 years 2 weeks ago #2985

Frantastic wrote:
I had a discussion with friends yesterday waiting for our train from Shanghai back to Nanjing and we discussed who the winners are of a recession after viewing an article on the internet from the China daily about the China housing bubble, which is likely to burst in 2011...

Another winner in lean times (possibly) are expatriates. Just the fact that I'm from a different country makes potential employers perceive me on a totally different level (salary, methods of communication, level of casualness, willingness to hear my ideas, etc) in China.

In lean times anything that can give you an edge is an asset, so I think expats living here during a 'recession' at least have the 'foreign' card to play...

In my own experience, when possible supporters are strong, they are less willing to partner. However, when I catch them during lean or chaotic times, they usually become much more open-minded. :)
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Re:Who are the winners in times of recession? 4 years 2 weeks ago #2988

In my opinion pawnbroking do not prosper dramatically during the recession. Even though banks are less willing to give loans and more people are short of money, these groups do not make up the most profitable part of pawnbrokers' business. On the other hand their major customers are wealthy spendthrifts who pawn their personal belongings rather than get a loan from his bank on commercial collateral, and the demimonde, the gamblers, the owners of resorts and nightclubs, persons of dubious professions who invest their excess cash in "ice" against the unfortunate days when they may need to raise money in a hurry.

In fact, there is an upside and a downside for nearly every industry during recession. Admittedly financial service related industries have been through a very hard time. However thanks to the cheap costs it is possible to make a profit for most firms. And at the same time it abounds with opportunities for value investors as well during the recession.
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Re: Who are the winners in times of recession? 4 years 2 weeks ago #2989

As with the burst of China housing bubble in 2011, I find the claim unconvincing since now there is no tendency of decline in demand and the government is not taking any effective measures to bring it down.
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Last Edit: 4 years 2 weeks ago by Jessica.
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Re: Who are the winners in times of recession? 4 years 2 weeks ago #2992

Jessica wrote:
As with the burst of China housing bubble in 2011, I find the claim unconvincing since now there is no tendency of decline in demand and the government is not taking any effective measures to bring it down.

That's one of the characteristics of a bubble, there is no decline in demand until the bubble busts. The problem is, the demand is largely speculative. On the suburbs of Nanjing as well, there are a lot of new projects with nice little villa's, and all of them are sold. However, no one is actually living there, they are bought because people think it is a good investment and prices will always go up.

Just look at the price compared to average income. Real estate prices are at a similar level here to what I would pay in Europe, where average pricelevel and income is much higher.

I have not a single doubt that prices are inflated, but the big question is what is going to happen, China is not a normal economy with the state having so much power.
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Last Edit: 4 years 2 weeks ago by Erik749.
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Re:Who are the winners in times of recession? 4 years 2 weeks ago #2995

@Frantastic
There is a law against burying dead ppl, so i don't think that would make a good business.

@Erik, please don't talk the Nanjing market into a recession. I bought my apartment last year and i don't want to see my hard earned 40% value increase just slip away :-).
House prices are indeed high. However, ppl here still have 3 generations living in one small apartment. The banks here will lend you only 70% of the house value (in comparison with for example 110% in the Netherlands), so there is an huge amount of real money in the market. And 800 million Chinese are lined up to join the party. So why so negative? These empty villa's have been empty for years, nothing new. Oh, and 88% of the Chinese mommies don't allow their daughter to marry a renting man. (And these girls actually listen).

So, to make a long story short: to become recession proof: buy a house.
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Re: Who are the winners in times of recession? 4 years 2 weeks ago #2996

I bought two apartments units here in Nanjing at the insistence of my other so-called better half with somewhat reluctance but these units were bought a year and 5 months ago respectively and we have made a wee sum of money. But that is not the issue.

My reading is this; the problem in China is that the Chinese government has a strong incentive to keep the party going given that the property sector is one of the biggest drivers of China
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Re:Who are the winners in times of recession? 4 years 2 weeks ago #3001

jaap wrote:
@Erik, please don't talk the Nanjing market into a recession. I bought my apartment last year and i don't want to see my hard earned 40% value increase just slip away :-).

well, you know what they say, buy low. I didnt buy last year so I have to wait for the bubble to collapse to buy me some nice real estate. But you said it yourself, a 40% increase to me a sure sign of an overheated market, and a correction seems inevitable. But this being China, who knows? I am sure in the long run -not taking into account political stability factors- property will be a good investment.
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Re: Who are the winners in times of recession? 4 years 2 weeks ago #3014

Erik749 wrote:
Jessica wrote:
As with the burst of China housing bubble in 2011, I find the claim unconvincing since now there is no tendency of decline in demand and the government is not taking any effective measures to bring it down.

That's one of the characteristics of a bubble, there is no decline in demand until the bubble busts. The problem is, the demand is largely speculative. On the suburbs of Nanjing as well, there are a lot of new projects with nice little villa's, and all of them are sold. However, no one is actually living there, they are bought because people think it is a good investment and prices will always go up.

Just look at the price compared to average income. Real estate prices are at a similar level here to what I would pay in Europe, where average pricelevel and income is much higher.

I have not a single doubt that prices are inflated, but the big question is what is going to happen, China is not a normal economy with the state having so much power.

What I mean is extrapolation. It is true that there is no decline in demand until the bubble bursts, but intrinsically the economic bubble is a phenomenon that if prices have risen at a certain rate in the past, they will continue to rise at the rate forever until to one point where investors feel that they are no longer well compensated for holding the risky assets. Then they will tend to demand higher rates of return on their investments. However nowadays I am not sure if there is any sign that indicates such burst of housing bubble in China.
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Re: Who are the winners in times of recession? 4 years 1 week ago #3200

Jessica wrote:
What I mean is extrapolation. It is true that there is no decline in demand until the bubble bursts, but intrinsically the economic bubble is a phenomenon that if prices have risen at a certain rate in the past, they will continue to rise at the rate forever until to one point where investors feel that they are no longer well compensated for holding the risky assets.

that's the keyword: confidence.

but getting off the topic of china's impending housing crisis. i see that winners in times of recession are those fortunate to be making their housing repayments through a fixed mortgage. the sharp increase in interest rates will not affect them, whilst those with tracker mortgages are left in a precarious situation as their salary remains static. usually its the more affluent among us who have such fixed mortgages. another example of the rich getting richer...?
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