Recession Predictions: An Ill Wind?
Recession Predictions
There is one prediction that I will make about the recession that I can guarantee. I predict that most of the experts predictions as to length, depth and lasting effect of the current economic downturn will not meet any reasonable standard for accuracy.
I believe the experts who are working overtime to fan the flames of market hysteria are the same experts who told us when gasoline hit $4.00 a gallon and oil $140 a barrel that $5.00 a gallon and $200 a barrel were next. I filled my tank for $1.49 a gallon this morning.
These experts are like drought experts. When there is a lack of rainfall for a time there are drought experts predicting dire crop consequences, reduced river flow and possible lack of drinking water in the near future. When a sudden period of rain every other day for a month appears these same experts appear on TV to remind us that even though the constant rain is producing mold on your walls the drought is not over since we are still a few inches short of our average rain for the decade.
The experts often do not present “the rest of the story”.
If there is a shortage of rain it is not good news for farmers and when Chrysler shuts down for a month there is little doubt that this is not good news for the 65,000 employees. I don’t think Ford is sending Chrysler a get well card.
Office Depot closing 126 stores is certainly not a Merry Christmas card for the people depending on those stores for their income. Behind closed doors there are probably a few cautious smiles of satisfaction at Staples Corporate headquarters. Circuit City problems seem not to be shared by Best Buy. They probably have a team analyzing the Circuit City locations to be prepared to gobble up the best ones if they become available.
A recession proves the old saying that:” It is an ill wind that doesn’t blow somebody good.”
The retail business is a tough, competitive area to operate. There are always some smart newcomers ready to pounce on an operation that is getting past its prime.
I remember Gimbels, Wanamaker’s, Lit Brothers, Snellenbergs, Strawbridge & Clothier, Foleys, E.J. Korvetts and about a dozen other once popular, powerful retailers that went by the wayside supplanted by other operations after a period of economic hard times.
The adjustments are difficult on the individuals involved but the economy revives with new faces and models for doing business. Hopefully this recession will end with a new understanding that the financial markets needs some reasonably structured monitoring.
The government agencies are thrashing about with all kinds of plans for revival. Many of them seem designed to help end the system that has provided us with the greatest economic growth and individual opportunity of any country in history. If they would focus on actions of those companies which precipitated the current problem and the government rules that contributed, it would be a good place to start.
The Free Market does not exactly mean that unfettered greed and any action that is profitable without consideration for the public weal may be freely pursued. Any marketplace can use an upgrade from time to time. Let’s hope that current adjustments do not destroy the basic operating concept of our national marketplace.
I do remember you saying that gas prices would go down and you were right. I am surprised that you are advocating
“reasonable structured monitoring.”
I have a question. Why are the ‘experts’ defined as ‘experts’ so wrong much of the time? And who the hell pays them? Schools, think tanks, corporations? I am so sick of the media blathering on about these people with no regard for historical data or common sense. Everything relative to the economy is hyped to the nth degree and it’s hurting (scaring) us even more. Show me an editor with an ounce of reason and and I’ll show you a national press still in business.
I just ran across an article that was talking about how the wholesale gasoline futures market is down to $1 a gallon for January delivery..could we see $1.15 gas? Looks quite possible.
Surprisingly the uk economy shrank a further 0.4% between July and September (the last quarter that there are figures for), so the end of the downturn is a long way off yet – another 6 months at least i reckon, its the longest recession since records began 50 years ago and it wont be till years later the economy and property market recovers, it was’nt until the late 90′s that the property market recovered after the 89/90 recession.