As the economic recessions has deepened over the last two quarters, investors are growing even more fearful about the state of the economy moving forward.

Just when it looked like DOW 7,000 just might be the bottom, the market crashed through that level on it's way to near 6,500 and many (including VFC) predict that it will hit 6,000 before this mess is all said and done.

The recession has spared no one and businesses large and small are all sweating out these next few quarters hoping to just stay afloat until the time comes when the economy begins to rebound and people start spending money again.

There are stock market bargains out there that have not been seen for at least a decade and the time to jump in and buy is now, while the economy is in shambles.

This Bear Market also offers the opportunity to invest in less riskier stocks because significant gains can be had all over in the event of an economic recovery, whereas in the Bull Markets the biggest gains usually come as a reward for investing in riskier companies (start-ups, biotech, etc.).

That being said, for reasons ranging from poor management, financial instability or a shift in American culture, not every company out there will successfully emerge from this recession.

Here's three stocks that VFC does not see lasting long enough to enjoy an economic recovery:

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BBI, Blockbuster Inc:
Years ago, Blockbuster stormed onto the entertainment scene and dominated the movie rental business.

However unfortunate it may be, the time has come for this company to close the doors and shut off the lights, a la Circuit City.

This week the company did release some good news when they reported an increase in same store sales for fiscal year 2008, but the large increase in sales came from the sale of new movies and games while the rental business saw a decline.

Blockbuster, when they dominated the movie rental market, made the same mistakes that General Motors did when the auto conglomerate dominated their own industry- a demonstrated lack of innovation and an arrogance that made them think that the customer would just keep coming back by just offering the same old product.

The leaders of the Blockbuster conglomorate had a chance to ensure the company's dominance into the future but let a lack of vision become their downfall. Meanwhile, over at the Netflix and Apple headquarters, innovation was ready to strike at Blockbuster.

Blockbuster could have easily developed their own mail-order business but did not make a concerted effort towards that business plan until Netflix stormed onto the scene in much the same way that Blockbuster did in their hey-day.

Then the cable companies, as well as Apple and a host of Internet sites, offered video-on-demand and downloadable movies for a much cheaper price that the five bucks that blockbuster now charges.

Additionally, discount vendors such as Redbox have popped up onto the scene offering DVD rentals for one dollar per night. A Redbox DVD vending machine, for instance, is placed inside supermarkets or outside of McDonalds and offers a pretty decent selection of recent releases.

Blockbuster's elimination of late fees and the sale of previously viewed or new DVDs and games will not be enough to keep this company afloat. It is also too late to take advantage of any new innovation because they are so far behind the curve that Netflix and Apple have set.

Blockbuster's fall is a prime example of why you can't ever sit back and enjoy you're time on top in the corporate world because someone else will come up with a better, more affordable idea and put you out of business.

Blockbuster built more stores and offered more movies, but in the end it was not enough.

While the stock has offered some excellent day trading opportunities of late, I don't see a future in BBI.

Chapter 11 is on the way.

Netflix, Inc.

Apple iTunes

GM, General Motors:
Months ago I put GM on my list of Bear Market non-picks, and I retain that opinion even after the taxpayers just spent billions of dollars in an attempt to keep this company afloat.

GM failed because of the same reason that Blockbuster failed- lack of innovation. When the rest of the world was moving towards lower cost, more fuel efficient vehicles, GM built the same old gas guzzlers and ignored the fact that hundreds of thousands of these vehicles were still on the lots at the end of the model year.

Now GM is so behind the curve that it makes more sense for them to either close up shot, file Chapter 11 or let another company take them over; however it is doubtful that the latter would occur because GM really has nothing to offer right now.

Let's kill two myths right now:

First, a GM bunkruptcy would not have the dire consequeces on the American economy that pundits claim. There would certainly be an initial upheaval, but if GM went out of business that would leave the opportunity for a competitor to move in, and move in they would. People driving GMs would still buy cars, they would just buy them from another company and that company would have to build them cars. The fact that GM is such a vital part of the economy is false. In fact, it's quite the opposite scenario as we are spending billions and billions trying to keep a failing company afloat at a time when the Government is setting new records with it's budget deficit.

The second myth ties into the first; that the auto parts suppliers and retailers would all go out of business also. False. These suppliers would just have to shift from selling GM part to selling parts for other vehicles. Again, there would be an initial upheaval and initial cost, but they would survive.

Chapter 11 is the best option for General Motors. Aside from the piss poor management that has lead this visionless company into the ground, the union contracts are another major factor weighing on any hopes of a recover.

The UAW may be one of the strongest unions in the Country and right now they have a friend, a very good friend, in the White House. It is my opinion that if their friend in the Oval Office did not feel compelled to repay the unions for their support, then GM would already be sitting in Chapter 11.

In the end, Presidential support will not be enough and GM will end up in Bankruptcy court. Then they will be able to renegotiate contracts, regroup, and maybe, just maybe, the company can survive.

Common shareholders are the last to get paid, if they do at all, in the case of a Bankruptcy, so GM is a very, very risky bet right now.

VFC is staying away.

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ODP, Office Depot:
Office Depot has absolutely nothing to offer in this economy and I believe the recession will last just long enough to put these guys in Chapter 11 as well.

Aside from the huge downturn in the demand for office supplies, evidence of OD's contracts division fudging the numbers and overcharging customers is weighing on the stock price and on the company's bottom line.

Office Depot lost a billion and a half dollars last quarter, mostly due to one time payments, and the next quarterly report could be even more brutal with unemployment rising and businesses cutting costs.

In VFC's opinion, if the economy begins to rebound within the next two quarters, Office Depot may be able to survive, but even in that case it is not a sure bet.

If the economy continues on the current course for the duration of 2009, as many predict, then Office Depot bites the dust.

Microsoft Store

Three stocks that will recover:

C, Citigroup Inc and BAC, Bank of America Corporation:
These two stocks I will count as one and I will almost lump the rest of the banking industry in here also.

Speculation towards the nationalization of the banks has been the primary factor contributing to the huge drop in share price of C and BAC. Also playing on investor confidence is the fact that there still has not been a definitive bank-rescue plan from the Obama administration, nor has the President unequivocally stated that the Government will not let the banks fail.

Once both, or even one, of these things happens then investors will be able to invest with more confidence in the financial institutions.

Unlike the auto industry, the Government simply cannot let the big banks fail; the only question is whether they are headed for full nationalization.

Another factor adding to the downward pressure of C and BAC has been the recent increase of short positions. The increase is not hugely significant, and overall short percentage is still relatively low, but shorts have control of the entire market right now and will until signs start pointing towards recovery.

The new administration seems to be a fan of setting up a semi-socialist society, but I also believe that after he has passed all of his 'agenda spending', he will support a free market and allow the banks to recover.

In my opinion, the reason why the administration is keeping Wall Street at bay right now is because he views this as the Street's punishment for getting the Country into this economic mess. In other words, Wall Street is the enemy. However,
sooner or later the President will come around to the fact that he needs Wall Street to recover or his rating will be in the toilet along with his chances of a second term. Indications are that he began getting that message because this week he advised Americans that now was a great opportunity to 'Buy low'. After making those comments to the American people, the President is now on the hook to make sure the market rebounds.

Once he turns to a more positive rhetoric and signs off on legislation more favorable to the Street, the market will rebound and the finacials will lead the way.

With C pretty much in penny stock territory and BAC at record lows, it's worth buying now because the rewards could be nice a few years down the road.

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SIRI, Sirius XM:
SIRI's stock price has been absolutely hammered down to the dime range where, thanks to huge debt payments coming due in 2009 and a whole lot of bad press, it is likely to remain for the forseeable future .

Liberty Media just saved the company from either Bankruptcy or a takeover by Dish Network, but there is no smooth sailing in this company's immediate future.

SIRI is under huge short pressure, but those shorts will need to cover upon the release of any good news from CEO Mel Karmazin.

The stock is also weighed down by the bad economy. People are getting rid of the luxuries in their lives, and SatRad is definitely a luxury, but I also see great positives in that fact because SatRad is cheap entertainment.

For instance, instead of buying the MLB Extra Innings package from Direct TV for two hundret bucks, Sirius XM offers every inning of every ballgame with a regular subscription of 12 bucks a month. It's radio, not TV, but it's a more effective listening mechanism for the baseball fan looking to save money.

The company also relies on new car sales, and with new cars not selling, the Sirius XM bottom line could be greatly affected.

However, Sirius XM with it's satellites, on-air content and modes of delivery has the potential to bust out in the entertainment industry which would then translate into an increased stock price. With Liberty Media on board, investors could start seeing some synergy between Sirius and Direct TV and the financial benefits of the Sirius-XM merger should start positively effecting the bottom line this year.

All the bad news has the stock priced down in the teens (cents), but any good news could it soaring in the opposite direction.

The risk-reward is great, little to lose but potentially lots to gain.

Sirius Satellite Radio Inc.

GE, General Electric:
A long-time, all-American staple, GE is trading at unheard of levels, below seven dollars, after trading at near thirty dollars as recently as last August.

The threat of GE losing it's AAA credit rating, combined with the failings of it's financial division, has GE looking like another great American company gone bad.

However, GE is just as much a victim of bad press as it is a victim of bad business decisions from the financial division.

The shorts are in control of the market right now, and GE, with all of the bad press, has been a great shorting opportunity.

The company recently cut it's dividend by over 60% to help the bottom line later in the year. While this cut will drive some investors away, it offers confidence that the company's cash flow will enable it to comfortably survive both the recession and a credit rating cut. On a side note, the company did recently report that fears of sharp ratings cut are overblown.

Undoubtedly, General Electric has it's problems, but aside from the financial arm, the business plan is still strong and, in my opinion, the stock is oversold.

A look below five dollars is possible, but expect a rebound when the economy starts to recover.

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