Sometime in the future the economy will recover, maybe not with staggering gains, but it will recover. Ah, but you ask when? Well, trying to forecast that, would really be sticking my neck out.

If you are an avid reader then you have seen some predictions that speak of a recovery in the spring and some that push it out as far as 2011. Tough business that prediction business.

All that is well and good, but let me get to something that I do feel comfortable predicting, or at least repeating the daily news: UNEMPLOYMENT WILL BE GETTING A LOT WORSE in 2009. Who will benefit from this? I expect the church pews and bar stools will be in full use. I also think pawn shops, those lenders of last resort (excepting your local loan shark) will be doing a booming business.

The two most prominent pawn shops that are expanding organically and by acquisition are Cash America (NYSE: CSH) and EZCorp Inc. (NASDAQ: EZPW). Both are down this year but beating the indices by a fair margin.

MOST NOTEWORTHY: Nokia, Thornburg Mortgage and AbitibiBowater were today's noteworthy upgrades:

• Oppenheimer upgraded shares of Nokia (NYSE: NOK) to Outperform from Perform on valuation following the recent weakness, as their checks indicate demand remains solid. WestLB raised Nokia to Buy from Add on valuation, as they believe concerns about Chinese demand are overdone.
  
• Bear believes Thornburg Mortgage (NYSE: TMA) is much more likely to survive given liquidity from the Fed's Term Securities Lending Facility. Bear upgraded Thornburg to Peer Perform from Underperform.
  
• BMO Capital upgraded AbitibiBowater (NYSE: ABH) to Market Perform from Underperform citing the company's $496M private debt exchange offer.

OTHER UPGRADES:

• JMP raised Cash America (NYSE: CSH) to Outperform from Market Perform.
  
• Veolia Environment (NYSE: VE) was upgraded to Buy from Neutral at Goldman.
  
• Deutsche Bank raised Groupe Danone (OTC: GDNNY) to Buy from Hold.

Although short selling -- the practice of selling borrowed shares with the hope of repaying the loan by buying back the shares at a lower price -- goes against the American belief that stocks always go up, I have long been fascinated with it. Short Stories discusses what works, what doesn't, and what some of the leading lights in shorting stocks think about its opportunities and threats. I describe possible short trades and seek your comments and questions for story ideas. I don't offer any investment advice and I don't trade on any of the posts I write.

BusinessWeek reports that the consumer is tapped out. Can you profit from the combination of a falling market and a cash-starved consumer?

I was scheduled to appear this morning on CNBC's Squawk Box to discuss ways to profit from problems with consumer finance. Last night, my appearance was canceled -- I think it might have had something to do with the global market crash. But CNBC's loss can be your gain. Here's why I think the consumer will be the next shoe to drop in the economy and a few ways to profit.

• Unemployment rate rising (to 5% in the most recent report)
• Wage growth slower than inflation
• Declining value of homes makes home equity borrowing a non-option
• Savings rate -0.7% -- the worst since 1929
• Consumer installment borrowing at record $2.46 trillion

Credit card debt has been soaring since the home equity loan market dried up, according to MacroMavens (subscription required). Leading companies in this space include America Advance (NYSE:AEA), Cash America (NYSE:CSH), Dollar Financial (NASDAQ:DLLR), EZCORP (NASDAQ:EZPW) and ACE Cash (NYSE:ACE). Many have seen revenues jump 50% during the past three years but could now be headed for trouble.

While credit card debt has been increasing, home equity loans have been declining and lending terms have become much more stringent, thereby reducing the risk exposure for these companies.

In the Alan Abelson Barron's column (subscription required) this past weekend, MacroMavens suggested shorting the subprime credit card companies and going long Fannie Mae (NYSE:FNM). MacroMavens also suggested shorting regional banks and mortgage brokers.