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Less than What They Make Out
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Ours is a large and relatively diverse economy, so it shouldn't be surprising to anyone that some parts are doing better than others. Regardless, the signs of life we are seeing nowadays suggest, paradoxically, that the so-called recovery is less than the optimists keep trying to make out. Consider the following:

"Gambling Expansion: Betting on Betting" (Las Vegas Review-Journal)

More cash-strapped states turning to gambling to fill coffers

Gaming has found a surprising benefit from the nation's continuing economic recession.

State legislators and governors, facing the daunting reality of fixing multibillion-dollar budget shortfalls, view legalized gaming revenues as a means to shore up their deteriorating tax bases.

Nearly a dozen states are considering proposals to add casinos or expand their current gaming structures. The situation is fluid in many statehouses where legislation, amendments and support change quickly. There is often a long lag time between approval and the first spin of a slot machine reel.

"Sometimes, the easiest part of the process is passage of the legislation," WMS Industries President Orrin Edidin said. "The infrastructure needs to be in place and regulations need to be written before the machines can go live. The process may take (as long as) two years."

But with the economy in a free fall, unemployment rising and tax dollars shrinking, even states that have traditionally shunned gaming expansion in the past are now in play.

State proposals include expanding or building regional casinos, adding slot machines to racetracks and other locations, and adding table games to markets once limited by law to offer only slot machines. The gaming initiatives range from ballot referendums to governor-enacted legislation.

"In tough economic times governors and legislators have hard decisions to make," said Frank Fahrenkopf Jr., chief executive officer of the Washington, D.C.-based American Gaming Association and the industry's top federal lobbyist. "When there is not a lot of money in the state treasury, do you cut spending on social services or raise taxes across the board? It's not an appetizing decision either way."

Which is why gaming expansion becomes a bit more palatable.

"This Much Is Clear, Tattoo Removal Firms See Growth" (New York Post)

The multi-billion dollar business of tattoo removal is enjoying some recession-proof growth -- with one LA-based clinic even planning on going public next year to help fund a national expansion plan.

"More than 40 million people have tattoos and about seven million, or 17 percent, are in the process of figuring out how to get rid of them," said John Keefe, the CEO of Dr. Tatoff, a Californian tattoo removal clinic, who hopes to use the proceeds from a 2010 initial public offering to grow to a 10-location chain.

"More than 66 percent of those tattooed are between the ages of 25 and 45 and what was cool to them at 18 is an eyesore now that they are a mother with kids," says Keefe. The executive said revenue per client is about $1,600 -- which comes out to $40 per square inch, per laser treatment with an average of 10 treatments required. The average tattoo is four square inches, he said.

"It costs 10 times more to remove a tattoo than to put one on and it takes one year for safe and effective removal," says Keefe.

The national market is currently fragmented, with dermatologists operating on a one-off basis and usually not dedicating their entire practice to tattoos removal.

The growing unemployment rate is also helping the company ink new business as job hunters feel the need to be competitive. Of course, many look to get rid of their tattoos because of personal taste -- they may have simply fallen out of love with their tattoos or out of love with the name of the person indelibly inked on their arm.

"Recession Helps Peanuts In Comeback" (Associated Press)

Go figure: Food makers processed more peanuts over the past year than nearly any other time on record despite a national salmonella outbreak blamed for killing nine people and scaring consumers away from peanut products for months.

Peanut farmers who once feared $1 billion in losses are chalking up their good fortune to a bad economy that has more people reaching for peanut butter as a cheap lunch.

Agriculture Department numbers back up the theory. Peanuts processed for snacks — items such as sandwich crackers that were heavily recalled during the outbreak — were slightly down for the accounting year ending July 31. But peanuts used for peanut butter set a record at 1.1 billion pounds.

That was enough to make the year's overall peanut production the third-highest in history, missing the top mark set in 2005 by just a fraction of 1 percent, with nearly 2 billion pounds being processed.

"This is very unusual," said Sanford Miller, senior fellow at the Joint Institute for Food Safety and Applied Nutrition at the University of Maryland. He said the rebound from a national food scare typically takes far longer, sometimes years.

"It shows you how important peanut butter is to the American diet," Miller said. "People just won't give it up."

"Cosmetology Field Booming Despite Recession" (WTVY)

Cosmetology is projected to grow 10 to 20 percent by the year 2010. That national trend can be seen right here in the Wiregrass. Industry is booming, despite the current recession.

Cosmetology Instructor Elizabeth Chance said, "This is an industry where students can always get jobs. When they finish cosmetology they have so many job opportunities in skin care, hair, nails."

That trend can be seen in Wallace Community College's enrollment numbers.

Dean of Instructional Affairs Mike Babb said, "We have added 50 new students here this term and that is probably 30 more than we had last fall, we are growing by leaps and bounds."

Students looking to go into the hair and nail industry are saving big bucks on their education.

Chance said, “It costs a lot more money to get a four-year degree and a lot of these students are making as much or more money as those people who have a four-year degree."

"‘Boneless’ Wings, the Cheaper Bite" (New York Times)

Just in time for football season, the Lion’s Head Tavern in New York City stopped selling 25-cent chicken wings on Monday nights. In Tucson, a sports bar called O’Malleys on Fourth scrapped its fall special of a dozen wings on Monday nights for $4.

And in restaurants from Sarasota to Seattle, an improbable poultry part is showing up on menus: a little chunk of chicken breast that is fried and sauced and sold, with marketer’s brio, as a “boneless wing.”

All this is happening because wholesale chicken prices have turned upside down. The once-lowly wing is selling at a premium over what has long been the gold standard of poultry parts, the skinless boneless chicken breast.

Like the tail that wags the dog, the wings are now flapping the chicken.

Mike Bell knows chicken prices. The logistics and purchasing manager for Buffalo Wild Wings, a national chain with about 600 restaurants, Mr. Bell will buy 57 million pounds of chicken wings this year. Describing recent conversations with poultry processors, he said: “Basically a whole bunch of them are throwing their hands in the air and saying, ‘I don’t know what’s going on. We’ve never seen it this way.’ ”

In seven of the last 11 months, wholesale wing prices have been higher than breast prices, a reversal in a market where breasts usually reign supreme. In September, the average wholesale price for whole chicken wings in the Northeast was $1.48 a pound, according to the Agriculture Department. Yet skinless boneless breasts were $1.21 a pound.

A year earlier, wings sold for 94 cents and breasts for $1.15, and as recently as May 2008, skinless boneless breasts were selling for 57 cents more than wings.

The wholesale price shift has generally not been reflected in supermarkets, where grocers appear to be trying to preserve their margins on breast meat. Nationally on average, breasts are $2.80 a pound at retail, still 83 cents more than wings. However, some grocers are exploiting the wholesale price drop to run aggressive sales on breasts.

The recession is the cause of the price flip-flop.

Restaurants, normally big buyers of breast meat, slashed orders as millions of people cut back on eating out, and breast prices slumped. But demand for wings has remained strong, partly because people perceived them as a cheap luxury.

Adding to the demand: the brisk growth of restaurant chains focusing on wings, like Atomic Wings, Wingstop and Wing Zone. Several chains have been remarking this year about how much business is up in the recession. The major public company in this group, Buffalo Wild Wings, reported a 27 percent earnings jump in the first half of the year.

Eventually, as the economy improves, wing and breast prices may return to their traditional places. But for now, the triumph of wings over breasts has wing partisans celebrating.

"One Industry That's Booming: Debt Collection" (McClatchy Newspapers)

In the often murky waters of the debt collection industry, United Recovery Systems in Houston is considered a "whale hunter."

In its search for clients, United isn't looking for mom-and-pop businesses with a few hundred deadbeat customers. It wants bigger fish.

Its client roster includes national banks, international credit card issuers and domestic and foreign auto finance giants, each of whom count on United to make good on their bad accounts.

In the current economic climate, the "whales" are virtually jumping out of the water and into United's boat. The company is taking in $937 million a month in new accounts, compared with about $550 million a month last year, said United's marketing director, Sean Keegan.

After beginning the year with 1,200 debt collectors, United has added 300 and will add another 300 by year's end.

"The volume was so huge that we had to run out and hire collectors," Keegan said. "I can't put 5,000 accounts in this guy's file box for him to work this month. I have to go hire new people."

United's growth spurt isn't an aberration. Across the country, dozens of established collection agencies are expanding their operations and hiring collectors, managers and support staff to keep up with the rising tide of bad debt due to massive job losses.

As real estate values fall, homeowners can no longer tap their home equity to pay down debt. So antsy creditors are farming out more problem accounts to collectors after declaring them as charge-offs, or losses.

With billions of dollars outstanding on millions of past due accounts, creditors want their money now and collection agencies with a track record of success are cashing in.

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