NEW YORK -- I've seen better New Years. The Nervous Nineties have essentially opened for business. Some parts of the country have already been overwhelmed by recession. Those not yet knocked over know how a standing domino feels.
Make no mistake about it, the early Nineties will be tough. Growth is slowing worldwide. In the United States, a lot of business, consumer and government debt has to be shoveled away. Still, in the midst of war fears and job fears, opportunities exist.
* Housing. Bad news for sellers is good news for buyers. For the first time in a decade, the rate of home-ownership among young people is edging up. Adjusted for inflation, young families can buy median-priced starter houses for 4 percent less than in 1979, and they are increasingly doing so.
* New mortgages. Loans are readily available for anyone with a job, a good credit rating and not too much debt. The first-year rate on adjustable mortgages has dropped to an average of 7.8 percent, according to HSH Associates in Butler, N.J. Fixed-rate 30-year loans are averaging 9.8 percent, down half a point from the summer.
Many lenders, however, are requiring higher down payments, or higher interest rates on low-down-payment loans. The Bank Rate Monitor reports that in California, first-year rates on adjustable mortgages with 10 percent down payments have been rising recently to 9-9.9 percent.
* Old mortgages. If you hold an adjustable mortgage tied to six-month or one-year Treasury bills and a rate change is due, your monthly payment might decline. Adjustable loans linked to a lender's average cost of funds, however, might remain unchanged for a while longer. Cost-of-funds indexes change more slowly than Treasury rates. If your mortgage rate adjusted this summer to around 11 percent, you might want to refinance into a cheaper fixed-rate loan.
* Jobs. In recessions, all eyes turn to the jobless. But most people stay at work. When your income holds up during a recession, you have a rare opportunity to acquire goods at bargain prices. That means you should be in the shops over the next few months, not out of them, because so many prices are being marked down.
But it is psychologically difficult to spend money when you can't tell for sure whether your job is safe. White-collar workers could -- arrive at work tomorrow and discover that their function has been dropped or their department pruned. The white-collar PTC workers most at risk are in early middle age -- say, early 40s -- with salaries in the $40,000 to $50,000 range and no likelihood of promotion. They have "topped out" in their current jobs.
Formerly, workers topped out toward their late 40s or early 50s. They'd have stayed on the job until retirement, getting small or no raises every year. But the baby-boomer generation is topping out at a younger age. There are simply too many of them compared with the few slots at or near the top.
Companies don't want to carry such workers until retirement, so they're organizing them out and replacing them with people earning $25,000 to $30,000. That's another story of the Nineties: forced career changes for boomers, coupled with more opportunities (once this recession passes) for the younger generation coming up.
* Investments. There is no better time to buy stock-owning mutual funds than during recessions, when prices are down. Make regular investments every month, through your company savings plan or by having your mutual fund make automatic monthly withdrawals from your bank account. Maybe stock prices will go lower, but from an investor's point of view, that should make them even more attractive.
I know that many of you won't buy. You'll drive 50 miles to a factory outlet to get a coat at a half-price sale, but when Wall Street puts stocks on sale, you shy away. You'd rather wait and pay double the price.
You're making a mistake. Ten years from now, today's prices will look astoundingly cheap.