Monday, January 26, 2009

Fear is the wildcard

I spent the latter part of last week in Dallas at some bank meetings with a few of our business execs, and you'd better believe that the tension/excitement levels at these meetings is pretty high quality in an economy like this. We had a few folks there who are pretty sharp cats, one of whom you might recognize from the occasional CNBC appearance or WSJ quote. Guys with a good macro view of the situation the country's in. Lot's of data, lot's of ways to interpret the fundamentals (data), and a few scenarios of ways this thing could play out. Will say that this one's pretty darn similar to previous rounds dating way back, in a whole bunch of ways. But it's very, very different in one regard in particular - Fear. Some of the fear is certainly warranted, some of it probably inadvertantly manufactured in various ways. But it set in pretty solid last quarter, and set in deep enough that we've now got a problem with negative feedback loops, fancy lingo for the risk of that fear overtaking the fundamentals and turning itself into a cycle of self fulfilling prophecy - and it got out of the barn.

My personal stance? In the words of a pretty damn good businessman I know - "Don't waste a good crisis" - and I think my grandpa, who's no longer around but from whom I used to ask for stories about the dust bowls and the depression, would have been pretty impressed with this one.


theZeph said...

after today's announcments from Cat, Phizer, Home Depot, and Sprint...count on fear racheting up a few notches!

Jason said...

Zeph - In the words of a wiseman who's name starts with Buff - "be fearful when others are greedy, and be greedy when others are fearful".