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It’s hard to find something not impacted by our current financial crisis. Here are 12 examples of what the recession means for specific things, from Spam to sex addiction.
1. Spam
It looks like meat, it tastes like meat, but it’s a far cheaper substitute for meat. It’s Spam! And it’s booming. Though Hormel’s share price has fallen with the overall market, Spam sales are soaring as the economic crisis leaves consumers strapped for cash. Interestingly enough, Spam, the “crazy tasty” mix of ham, pork, sugar, salt, potato starch and a sodium nitrite, was invented during the Great Depression and became a staple for Allied troops overseas in the 1940s.
2. Marriage and Divorce
Breaking up is hard to do, especially in this economy. While it may be too early to know the impact of the crisis on divorce rates, it appears divorces may have slowed down since the financial crisis began. That’s because 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. In fact, 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. In fact, 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, partially due to dwindling home construction and slower automobile production. Some recyclers are closing their doors, and in the UK entire city councils are abandoning their recycling efforts, as they are no longer economically feasible.
4. Psychics
“There is no rhyme or reason to the way the market is trading,” says a personal trader. “When conditions are this volatile, consulting a psychic can be as good a strategy as any other.” 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
Just as you suspected, companies are cutting back on their holiday galas. ABC News announced the cancellation of its annual celebration. American Express did the same and then some – announcing the cancellation of 2009’s celebration as well.
But what about the caterers? 56% of party planners say that their corporate holiday party numbers will be off more than 10% this year compared to last. They’re scrambling to come up with innovative, more somber types of gatherings like luncheons, pot-lucks, and receptions rather than galas, caviar, and glam.
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 if used isn’t your thing, it may still be a decent time to buy new. That’s because even steady growth car makers like Honda and Toyota have seen 24% and 32% declines, respectively. 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
Looking for a good holiday or spring trip? Look to Iceland!
Once an economic success story, this small country is now, well, bankrupt. If you were attune to Fannie and Freddie and the big Wall Street break-up, you may have missed Iceland’s fall. 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. Luckily, the IMF and its Nordic neighbors have stepped in, lending $2.1 billion and $2.5 billion respectively to help the country recover.
But tourism appears to be on the rise. Airfare search engines report a 400% 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
Ivy League schools aren’t immune to the financial crisis. 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% this fiscal year. For Harvard, that may mean an $11 billion drop.
That may mean a decrease in financial aid – especially because lenders can no longer sell their securitized loans in the secondary market to get new money to offer new student loans. Despite Congress’ Ensuring Continued Access to Student Loans Act of 2008, which authorizes the Education Department to buy federal student loans from education lenders for the 2008-09 and 2009-10 school years, there’s a chance financial aid may fall short.
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. Perhaps hosiery sales will supplant lipstick as the indicator of choice. Overall hosiery sales rose 2.3% this year, with Spanx seeing a 77% 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. That’s because an average NASCAR team relies on corporate sponsors for 80% of its budget. That’s four times the percentage of an NFL franchise’s budget. And many of those corporate sponsors, including the Big Three – GM spent $578M in sports advertising in 2007, including NASCAR – 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. There’s no sign that these former gymrats are instead opting for cosmetic surgery – 53% of plastic surgeons of the American Society for Aesthetic Plastic Surgery say business has slowed.
12. Sex & Sex Addiction
Will the financial crisis spark a baby boom? It just might. 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 the sex addictions. Apparently, the economic crisis has sparked “maladaptive coping mechanisms” among bankers, according to Jodi Conway, a sex addiction therapist in New Jersey.
Read more of what Diana learned today here.
Now through Sunday only, all our t-shirts are $14.90! Visit the mental_floss store, finish your holiday shopping and use the code “holidayteeparty” during checkout.
Comments (21)
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I have personal experience with several of these. I recently gave up my gym membership and bought a used treadmill. My company holiday party, which last year was at a really nice restaurant, will be held from 2-4pm next Tuesday in conference room B. Don’t think I’ve bought an unusual amount of either lipstick or hosiery (or sex toys), though.
posted by Cassie on 12-12-2008 at 6:01 pm
My wife the OB/GYN has seen a sharp increase in pregnancies due next year. Seems that people are opting for more cheap stay-at-home fun. But it’s only cheap for a little while….
posted by Don on 12-12-2008 at 6:06 pm
I wholeheartedly believe that the lipstick effect is valid. (Not only do I buy more lipstick and small accessories when I’m broke, I also do it when I’ve gotten fat. It’s fashion that always fits) Id’s just like to ask Leonard one thing : since when in the last 20 or so years has Lauder sold lipstick for ten bucks?
posted by AllisonW on 12-12-2008 at 6:23 pm
My sister owns a small video store. She said now she gets about 5 people each day who come in unsolicited trying to sell her their old DVDs. I don’t think her business is doing so hot as it is, so she can’t turn their well-worn copies of American History X and Philadelphia into bailout cash.
posted by eugene on 12-12-2008 at 6:25 pm
“As a result, some NASCAR teams, including Chip Ganassi Racing and Dale Earnhardt Inc., have merged in an attempt to attract corporate sponsors.”
Ha, seriously? Is the new company now Chip & Dale? Perhaps they can dub themselves the Rescue Rangers.
Come on, I CAN NOT be the only one that instantly thought that when reading that sentence.
posted by Lee on 12-12-2008 at 7:11 pm
Spanxx and hosiery sales are up because people are fat and the fashions lean toward tights and hose again. I don’t think those two apply.
posted by Karen on 12-12-2008 at 7:13 pm
Yeah, our holiday party was not cancelled(in fact it was held at the same country club–no joke–as last year)but everything was scaled back, instead of steak and servers, there was a buffet, and there were no gambling tables this year, and raffle prizes were not as great. The party pretty much tanked and everyone got drunk to seemingly tune out their depression or get out of their funk(drama everywhere that night–at least three separate drunken brawls or near brawls–yah). As for personal maintenance, yeah I try to look well, but am not buying any new clothes (though I have noticed the ladies are fixing themselves up more lately–maybe some makeup brings their spirits up? who knows). I am only spending on things I absolutely need such as a car(used one or maybe a new compact car), and desktop(I know expensive but got deals after black friday, which I hadn’t seen in a while or ever) since the one I bought back in 2000 is pretty much dead and I rely on office applications and the net. As for the baby boom I can attest as many of my friends are “coming down” pregnant or are due in a few weeks.
posted by Danny on 12-12-2008 at 9:37 pm
There was a deal for $399 round trip to Iceland from NY and Boston. I should have booked! It’s gone way up again. :(
posted by Lauren on 12-13-2008 at 2:52 pm
We had our company party last night. It was pretty crazy, with open bar and gambleing all night. They had cash prizes to give out as well. But then again, business is growing becasue cable is one of the cheapest forms of entertainment out there, so who knows.
posted by Cassandra on 12-14-2008 at 8:14 am
I work in a library, and I’ve noticed over the last year that we have gotten crazy-busy. More people coming for free books, movies, and computers. Too bad the economy sucks, because now we have to layoff staff, so we’ll have less people to help.
posted by Lina on 12-14-2008 at 8:59 am
pork and ham are the same thing and spam is not a meat substitute since it IS meat.
posted by kat on 12-14-2008 at 3:23 pm
Hosiery is probably doing so well because of two reasons. Cosmetic surgery is far to expensive for someone trying to scale back, and spanxx is the next best thing. Also people who are depressed (due to economic reasons) are not eating as healthy (as it is more costly then junk food) and can’t afford to buy new clothing or go to the gym. I’ve always loathed Nascar, it is a complete waste of gas and money, so I don’t mind if that business tanks.
posted by Holly on 12-14-2008 at 4:01 pm
I read this after the wanderlust article–dang it! Now I wanna go to Iceland!!!
I do agree about the lipstick factor. I have recently converted to Berts Bees instead of chapstick to keep my winter lips smooth. It’s all about having a tiny bit of luxury in your life to make it not suck so bad :)
posted by KerriH on 12-14-2008 at 10:00 pm
I have discovered since the credit crisis people are advertising alot their goods to sell secnd-hand.
posted by pat on 12-15-2008 at 6:25 am
Businesses will strugle more as lenders call in debt and restrict criteria.
posted by pat on 12-15-2008 at 6:32 am
SPAM has more ingredients than meat in it. This makes it NOT meat. Also known as a meat substitute. It just happens to have a few meats on the long list of INGREDIENTS, lol. (Which include sugar and potatoes.) Disgusting!
posted by Spam Ain't Meat! on 12-15-2008 at 3:34 pm
We just got an email from the CEO of the Fortune 500 company I work for that no corporate employees will be getting merit increases (raises) for 2009. Thankfully we were just boutgh out at the end of last year, and the new ownership signed an agreement not to alter our bonuses for at least 3 years.
posted by Neal on 12-15-2008 at 4:36 pm
Maybe hosiery purchases are going up as more people are out of work and interviewing. i know i bought a couple pair for that express purpose this year.
posted by Sara on 12-22-2008 at 6:03 pm
This is what I call the true “trickle down theory.” When one industry goes bust, it’s hard for it not to effect others around it. Fortunately for me, companies still see the necessaty of a professionally done website. I Won’t have to eat Spam…at least not yet!
posted by Scott Mahler on 12-22-2008 at 7:05 pm
The Fed decreasing interest rates to nearly zero should be extremely alarming to everyone, since it points out one major problem: the Fed is running out of options and tools to combat today’s economic crisis. The worst that could happen is that this recession cold last beyond 2010. Decreasing interest rates will have short-term solutions, but we need long-term, solid decisions to guarantee long-term stability, growth and sustainability.
We have bailed out the Wall Street, the Detroit Big 3 and most probably we won’t stop here. How much longer can we keep bailing out the failed companies? And the most important – can we afford to?
The coming year seems full of hope. Economic recovery and ending recession will be painful across many nations, since this financial crisis had direct or indirect effect on many countries. Hope recovery will be more speedy and we’ll be able to get rid of economic mess by the beginning of 2010.
posted by Davd Dzidzikasvili on 12-31-2008 at 4:23 pm
The Fed decreasing interest rates to nearly zero should be extremely alarming to everyone, since it points out one major problem: the Fed is running out of options and tools to combat today’s economic crisis. The worst that could happen is that this recession cold last beyond 2010. Decreasing interest rates will have short-term solutions, but we need long-term, solid decisions to guarantee long-term stability, growth and sustainability.
We have bailed out the Wall Street, the Detroit Big 3 and most probably we won’t stop here. How much longer can we keep bailing out the failed companies? And the most important – can we afford to?
The coming year seems full of hope. Economic recovery and ending recession will be painful across many nations, since this financial crisis had direct or indirect effect on many countries. Hope recovery will be more speedy and we’ll be able to get rid of economic mess by the beginning of 2010.
posted by Davd Dzidzikashvili on 12-31-2008 at 4:24 pm