Today, consumers are being financially whipsawed from all directions. Home equity reduced if not eliminated, stock portfolio’s squished, and 401K and other retirement savings decimated. Credit availability scrunched what with banks reducing credit lines on home equity lines and credit cards. Even for consumers paying their bills timely.
Sure consumer confidence is low…but more importantly, wallets are near empty. Or even empty, on some days.
Now there have been times in our economic history where a consumer confidence problem has been the driving factor to economic malaise (like after 9/11). But, let’s stop trivializing today’s economic problems with talk of a consumer confidence problem. The reality is that there is a consumer reality problem. Today consumers are in the toughest financial spot they have been since the depression some 70+ years ago. Tougher than most have been in their life!
The U.S. Government must get real, as must state and local governments. Companies must get real if they want to survive. And, individuals must get real if they want to move beyond survival to a position of prospering in these tough times. Only with a realistic assessment of where we are can we chart a sound plan for a better tomorrow.The starting point for addressing any problem is getting real.
So let’s not get sidetracked by talk that all we have is a consumer confidence problem.
Starting Sunday: A six part series on why I expect the recession to be deeper and longer than many currently expect...and why I believe that there will be opportunities to prosper nevertheless.
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2 comments:
I am starting to believe that the markets have resigned themselves to a victory by BHO, and prices have been discounted accordingly. Today's announcement by OPEC to reduce production is not welcome news, since that action will increase inflationary pressure at a time that the world can ill afford it.
Can the same be said about credit markets?
José
I am not sure how much rationality there is in the market these days. And, I am far from a stock market expert. But, I am out in the business world, in various industries, and in cities across the nation. The pain I see being felt by the consumer, by companies, and by other entities is very, very real.
That being said, I am a strong believer that thoughtful, focused individuals and companies can not only survive, but thrive and even prosper in these times. After all, that is what I am hired to do for my clients.
Stay tuned for my thoughts on the credit markets, one of the subjects in the six part series starting Sunday.
I appreciate your thoughful comments and hope you will contribute whenever the mood strikes you.
Most importantly, hope you are crafting your own plan for prospering in these times. Some will definitely do so!
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