Believe your Eyes

Share:

Believe your Eyes

Took a stroll around the neighborhood with my neighbor this morning. He’s in some kind of financial business. Of course the conversation got around to the economy.

The world, it seems is awash with cash. It all came out of the markets and is in banks, pillow cases, government bonds, etc. No one wants to invest because they are afraid.

Yes, fear is driving the recession, nothing else.

I asked him if he had personally witnessed any problems. We ticked off the list.

Houses are selling in our neighborhood – it takes a bit longer and you don’t get quite as much, however they are selling. People are buying. I don’t know personally of anyone who has been laid off (well one guy, but he is talented and skilled but doesn’t really want or need to work). Our company is having a great year. Virtually everyone I talk to says they are have a year as good as last year. I went to a concert last night, the place was full. I had to look at 10 restaurants before I found one that could give me a reservation for 2. The donut shop where we stopped for coffee this morning was packed with people. Costco was jammed over the weekend.

The auto companies are frankly in exactly the same shape they were in last year at this time, except that no one will loan them operating cash, like they did before. The bad business decisions they have made over the past decade have caught up with them. It is also a fact that most of the loans (subprime) are working and not in foreclosure.

So what has changed? Fear. People are afraid because they are told to be afraid. People who make their living bringing doom and gloom are saying “I told you so” and since they have a bunch of letters after their names, they are believed.

Don’t get me wrong, fear is a great driving force. But let’s not be fooled here. We are not going to be living in the streets. The electricity and gas is going to keep coming. Food will be in the supermarkets, and the systems that provide those will continue to work. No one has lost a cent in a bank collapse. (There were probably too many banks anyway). I hear at least a dozen commercials a day on the radio for companies that want to lend you money on your house. Airplanes are flying, busses are running,

What has happened is that we were simply living beyond our means and now it’s time for a reset. This has been going on for nearly 30 years, the longest period of boom times in history. So we need a bit of a rethink. However it too will pass, and much sooner than you think. I wouldn’t be surprised if we see in April that the first quarter or 2009 actually showed a positive growth rate, small but there.

There’s simply too much money out there and people want to use it. And they will. They will just be a bit smarter. Loans are funding right now. For instance, a garage in Chicago was just approved and moving ahead. Of course it’s a blue chip project, but then maybe we need a few more of those.

Just saying

JVH

John Van Horn

John Van Horn

Leave a Reply

Your email address will not be published. Required fields are marked *

Only show results from:

Recent Posts

A Note from a Friend

I received this from John Clancy. Now retired, John worked in the technology side of the industry for decades. I don’t think this needs any

Read More »

Look out the Window

If there is any advice I can give it’s concerning the passing scene. “Look out the window.” Rather than listen to CNN or the New

Read More »

Archives

See all Blog Posts

Send message to



    We use cookies to monitor our website and support our customers. View our Privacy Policy