It seems that choppy trading will continue for few more weeks. Yesterday, Dow went up by 203 points after positive report from Cisco. In an earnings conference call on Wednesday, Cisco CEO John Chambers said a recovery “is well underway” and added that economic improvements were “gaining momentum” world-wide. He predicted Cisco’s year-over-year revenue would grow in the current quarter after a year of declines.

Today, Labor department said that U.S. unemployment rose by more than expected in October to hit its highest level in more than 26 years and employers cut more jobs than forecast. The unemployment rate, calculated using a survey of households as opposed to companies, rose by 0.4 percentage point to 10.2%. Economists’ expectation was 9.9%. Dow is down by 61 points few minutes after the market open. Traders are going to take profits they made yesterday just to make sure they don’t hold any positions over the weekend. As always, trade wisely!

Lakshman Achuthan is a smart guy. He is the managing director of Economic Cycle Research Institute (ECRI). His job is to predict recessions and economic cycle. He thinks that there is no downturn in economy anytime soon. See his interview here. I agree with him because I am an optimistic person! I know, I know, optimism alone is not going to make me profits. However, it’s nice to see someone, an expert in predicting recessions, is optimistic about economy recovery.

Today, we got the mixture of good news and bad news. Whenever someone asks me “do you want to hear good news first, bad news first?”, I always opt to hear bad news first. The reason is that I get rid of the bad news first and take the good news to compensate for weird feeling associated with bad news.

Here is the bad news. Actually couple of them.

Bad News #1. Economy Fell off a Cliff

Mr. Buffett delivered the bad news “Economy fell off a cliff”. Most of us already feel it. But, when we hear the confirmation from people like Warren Buffett, it doesn’t sound good. He also cautioned that unemployment rate may still climb up. More about this here.

Bad News #2. Stock Market could go much lower

Mr. Roubini delivered his gloomy prediction in RGE Monitor.

Bad News #3: Social Unrest?

Barton M. Biggs, managing partner at Traxis Partners (hedge fund), said he thinks it’s “50-50” as to whether the economy begins to recover over the next year or “whether we are going into a depression and a deflation,” which could conceivably be as painful as the 1930s. “If we’re going into the 1930s,” he said, “it’ll be survivalism, and we’ll have very substantial social unrest.”

Now, for some good news…

Good News #1: Some Companies are hiring

It’s a fact that crisis presents huge opportunities for some industries. Healthcare Industry is one of them. AP reports that even some banks are hiring in technology arena. More on this here.

Good News #2: Peter Lynch’s Optimism

Peter Lynch, Fidelity’s legendary stock-picker, said “I can’t tell you anything about where the market will be in the next six months or 12 months or two years. But at some point in the future, I think you’ll look back and see that we’ve gotten through this and that stocks turned out to be the best bet.” More on this here.

So… how do you feel? Optimistic or Pessimistic?

Will the worst recession morph into another great depression? What are the odds of our economy slipping into depression? Harvard professor Robert Barro puts the probability of current recession slipping into depression at 20%.

If you are a “glass half-full” kind of optimistic person, you will be happy that there is a 80% probability we won’t face the depression. If you are worried about 20% probability, you may not be alone!

More on this story is in Wall Street Journal.

Recession must be really bad. Even Playboy is having trouble generating revenue. Playboy Enterprises Inc. posted a fourth-quarter net loss of $146 million, compared with a loss of $1.1 million a year earlier. Revenue fell 19% to $70 million.

Revenue in the publishing group fell 11% from a year earlier to $22 million. The number of copies sold on the newsstand fell 23% in the second half of 2008 compared with a year earlier, according to the Audit Bureau of Circulations. The disclosure came as Playboy posted a steep fourth-quarter loss after a $157 million charge, which mostly reflected the falling value of its television assets. The chart below shows the stock price of Playboy Enterprises in the last one year.

Are we in another great depression in terms of unemployment? If unemployment rate is calculated in the way it was done in 1930s, the current unemployment rate is closer to 16.5% rather than 10% forecasted by economists. During the great depression of 1930s, the unemployment rate was hovering around 25%.

Reuters article says that comparing today’s situation with that of 1930s is not far fetched. There is another twist to the calculation of unemployment rate. Unemployment stats don’t take discouraged workers, the workers that lost the hope of getting job and stopped looking for a job, into account while calculating unemployment rate. Thus, the real unemployment rate may be more than 16.5%.

Losing the job is horrible, especially in this economic environment. Some of the unemployed are taking any job they can get. That’s the smart thing to do in the recession.

Michael Antidormi worked as VP in Goldman Sachs making $160,000 a year. He was laid off in February 2008. Now, he is working as representative for disabled veterans’ outreach program making $36,000 a year.

Jason Eldridge worked as personal banker for Chase bank making $40,000 a year. Now, he is a cook making $8 per hour.

Jarrod Posner worked as mortgage lender making $110,000. Now he is the enrollment counselor in University of phoenix making $33,000 per year.

There are lot more similar stories like this in CNN Money. Life is difficult at this point of time even when you are employed. You don’t know when the pink slips are going to show up in your division. Being unemployed makes things lot more complicated ruining the career and family. It’s better to get some job.

There is one downside to accepting any job. If your new job is completely unrelated to your old job, you will face some challenges to get the job similar to your old job when the economy turns around. If a terminated research analyst in Merrill Lynch starts working for Target at $8 an hour for 6+ months, it’s very difficult for him to get back to investment banking. Although every employer in 2010 would understand the difficulties of 2008-2009 job market, they would prefer someone who is always in touch with his specialty.

Related Link: Recession racks up more layoffs | Five legal ways to work from home

It has been more than two months since I wrote “It’s gloomy out there“. It’s getting gloomier. Every passing week brings more bad news. Big-name companies, that are generally thought as safe for employment, are also laying off big time.

Last week Microsoft announced termination of 5,000 employees, Intel announced the elimination of 6,000 jobs and United Airlines said it would get rid of 1,000 jobs. More than 40,000 employees received the pink slips today. Unemployment is hovering around 7%, it ‘s estimated to reach 10%.

In a survey by the National Association for Business Economics, 39% of companies plan to reduce payrolls over the next six months, while 17% plan to increase employment. Only the services sector continues to create jobs. Survey respondents continued to grow more pessimistic about the macroeconomic outlook.

Related Links: Job killing recession | Unemployment rate surged to 7.2% | Five legal ways to work from home

First, Merry Christmas to all our readers!

If you look around, you will hear news about unemployment and layoffs all over the place. When we turn on TV everyone is talking about thousands of layoffs. All newspapers write about how people are struggling to survive with unemployment at its high.

Is there any job available at all? Is everyone just eating wood for the breakfast?! There are hundreds of thousands of jobs lost all over this country. Still, some jobs are available in industries that are recession proof.

Health care, Insurance, Legal, Education and Security industries are still hiring. If you are qualified to join any of these industries then go for it even if you need to relocate. Wall Street Journal reports that even companies like SRI International plan to add 100 new positions next year. Companies like Merck and Novartis also plan to hire more people next year.

It’s time to polish your resume and send it to the employers that are seriously looking for people to hire.

It’s official now. The 15 countries that use the euro are officially in a recession, the European Union said today, as their economies shrank for a second straight quarter because of the world financial crisis and sinking demand. More on this in Yahoo Finance.

Citibank is planning to fire 60,000 employees over next few months, starting with 10,000 this month. Its chairman also may be leaving. You can read more about this here. Sun Microsystems is also planning to layoff 6,000 employees.

Related Link: It’s gloomy out there