Recently, I was invited to a breakfast meeting for financial executives where two world-class economists offered their analysis of the global economic crisis. The presentation—mostly statistics about bailouts, indexes, and averages—was over (way over!) my head.
Everyone else at my table appeared to comprehend what was being said, so I pretended I did too, nodding my head at appropriate places and furiously taking notes.
What was clear, even to me, was the larger message the speakers were trying to convey: uncertainty. This much was abundantly clear: no one can say with confidence what's going to happen on Wall Street or Main Street in the foreseeable future. The solutions being offered as a way out of this recession or depression (call it what you will) are nothing more than educated guesses. Bottom line: don't bet on anything. Keep your seat belt tightened and don't quit your day job … if you've got one.
One of the speakers suddenly stopped talking statistical language and in plain English offered some observations. Here in bulleted form is what I heard him saying:
- There is all kinds of evidence that this economic tsunami (the speaker's word) is radically changing the ways Americans think about money and the ways it has defined our modern way of life.
- We're seeing an economic paradigm shift in the way people are beginning to save rather than spend.
- New and cautious views of the meaning of career, risk, wealth, success, and personal satisfaction are emerging.
- Trust, the "glue" that holds financial systems together, has been almost destroyed.
- Economically speaking, the world has gone from peak to trough overnight, and we are likely to remain in that trough for several years. Better to plan with that long range view in mind than to keep getting disappointed by every quarterly business report.