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01.01.2009 ARTICLE
2009 starts being reviled, criticised and condemned by economy experts or “supposed to be” experts. And I'm not saying so because I'm in the position of questioning them (such is my ignorance), but because of the insistence of finantial authorities on giving wrong predictions.
These include governments (specially the current one, although the opposition didn't give any right predictions either), brainy decision-makers in finantial entities, multinational bodies, risk management agencies, and so on.
If we go back only a couple of years, when we still lived in Wonderland, nobody who was known to be solvent would risk their prestige to warn about what has happened. International authorities would not even think of a slight growth reduction, and now we find their predictions for such economic magnitude were far away from today's reality.
But is this reality? Stock market has dropped by 40%, but this is as meaningless as stocks and shares. Stock market does not assess things, goods or services, or anything comprehensible to the common people. It assesses positive or negative expectations, and these depend on intangible things such as “trust” (this applies to different markets, although they are all connected now), interest rates, energy prices, liquidity of the system itself, etc. Very often I read about and listen to finantial discussions, and you can hear explanations such as this: “Madrid Stock Market has dropped today due to Wall Street's bearish close of trading, as they did not approve last month's decrease of production in the US”. I can assure you the same cause will not produce the same effect next time. Sometimes events are quite obvious, but sometimes finantial science somehow reminds me of astrology (please do not mistake for astronomy: Tell me what happened on one particular day and I will tell you which conjunction, opposition, eclipse, transition, solstice, etc... caused that event). I can tell you astronomic ephemeris happen every day. If they corrrespond to any of our earthy ups and downs, that's a different story (told by astrologists).
And it is not my intention to compare Economic Science, which is necessary and respectable, to Astrology, which in my opinion, is nothing but superstition based on data. It is only an example to help us understand the desperate approach taken by experts to try and explain the mechanisms that go beyond their comprehension. Because it must be hard. Because there must be so many variables that interact and produce feedback that make explanation impossible. This is what I think. Except in the case of information altered for political, ideological, corporative or more or less confessable reasons, easily recognised by looking at the source, I reckon opinion-givers act on good faith and deal with trustworthy information, or at least they have more information than we have. If we look at their analysis and predictions and how often they are right, I bet you a milk coffee (I only bet milk coffees) they are not very different from conversations had in a bar.
If we compare this crisis with previous ones, there is something new: now the media need to fill the news with “contents”, but now good news are no news. The storm clouds of downward trends and disastrous predictions made by fatalistic analysts will not let the sun come out. If we all wanted to abide by the consequences of their predictions, we all would have to shut our businesses down or even suicide.
It can't be that bad. We are taking off a wave whose peak reached too high and, unfortunately, was made of more foam than water. I mentioned the stock market “tumble” before and how relative the meaning can be. If car sales have been dropping for months down to 50%, that is something different. This is not speculation, as thousands of people lose their jobs every day as a consequence of the artificial and explosive growth experienced by a country that would build alone as much as the rest of Europe together. Our stomachs feel now bloated. What will we do now with people who worked for that frenetic growth? Who will buy those finished properties that used to be sold off plan for prices swollen by speculation, that will not get financing now due to credit drought and their unrealistic values? The market will absorb it, indeed at a lower price and not quite as quickly as wished. Just like a slow and heavy digestion.
We need a readjustment, and we are having it. It has already started. I don't think any market can fall permanently by 50%. Once we overcome the panic, uncertainty and shock we are under, things will calm down. On several occasions I have said to a friend the most worrying thing is that “we don't know how big the monster is”. I prefer a bad reality, or a very bad one, to not knowing how bad it is. I suppose this is what experts call “to reach rock bottom”. Sure we will all now move on and adapt to the new scenario. If the “cake” is smaller, we will eat less. We will fight for those crumbs we used to discard before. We will have to change our minds after years of “dealing with orders” and now we will have to SELL our products and services by emphasizing whatever makes us different from competitors, as they will obviously do the same.
But crisis always involves renewal. We have to get motivation out of hard times to improve what was acceptable during good times. We have to use self-criticism as a tool for survival and overcoming. Blaming the “environment” is just the easy way out. If we look at our previous decisions with the same inquisitive eyes, many of us will reach the conclusion that we are partly responsible for what we have now. Have we mistaken courage for temerity?
We live in a rich country with a system of social guarantees that surely will absorb the impact of crisis on families, who are the biggest victims, after all. There are some elements that make me think positive (and mine is not pathological or anthropological optimism), in spite of the fact that many businesses could not hold on for many reasons and many others will fall in the way, leaving a trail of personal dramas behind. Without forgetting the victims of this crisis (described by some people as the most serious one in the last century, comparable to the one in 1929), we are going to try and see the positive aspects of the near future and look at it with a little hope.
Interest rates are plummetting, which will make both consumers and credit and investment markets more dynamic.
Also inflation is going down, admittedly as a consequence of the same crisis, but some of us who were not born yesterday have seen 2-digit inflation rates.
Figures have been so bad at the end of 2008 that this downward trend should not last much longer. Hopefully one of Murphy's law corollary does not apply this time: no matter how wrong things are going, they can always get worse.
Saving is increasing substantially. Also as a consequence of the uncertain atmosphere, but in the end, whoever needs to buy a car or a new TV set, or just wants to indulge himself, will do. He might just postpone it, but he will do. Let us not forget banks business is to lend money, our money. They might be more strict (now they are not being strict, they are just impossible), but they will eventually have to move their deposits.
We have such a tendency to accept that everything will go incredibly wrong that the least sign of improvement looks like a miracle to us.
I can think of many other issues, but it is not my intention to give a list of objective facts, which I don't have. Now they use the funny expression “market feeling”. My intention is to express the “feeling of a small businessman” linked to the building sector, a wretched one.
I would like to finish this writing, which I have allowed myself to title “Article”, with a mention to the social responsibility that we businessmen have with families that depend on our trading activity. We will do everything we can so our company gets through this critical juncture successfully. We will try to maintain the level of employment, and if we are forced to reduce it, we will do it in the least traumatic way.
And we are going to make it. How? Building good facades, which is our job. We will offer our clients more value for their money, thanks to the complicity and collaboration of our suppliers and work team, and we will put in the best of our knowledge and long professional experience.
This might be a battle field, I do not know, but we have had to fight before and have survived. And I'm sure most people can say the same.
Our goal this year is not to earn more money, or even earn money at all (advantages of a family business). Our goal is to get through this year successfully and to keep our staff. Is this not a good goal? I think it is. Better times will come, but you have to be there to make the most of them. So everybody stay alert to opportunities, because they will arise. The world never stopped spinning around, and it won't do this year either.
Happy 2009.
Note: The Empire State Building was decided to be built in the middle of crisis in 1929.
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