People Will Be Strange

We have experienced a significant financial shock, which resulted in a panic. To some, it looked like the end of the world, but it was not. However, this is not over yet, not by a long shot. That reality is just beginning to sink in. Most of us are in some form of denial, and will attempt to go back to "business as usual". The resistance to change is so ingrained in our lives! Within limits, denial will be useful, but there will be no "business as usual" and such a strategy will not work. We cannot avoid this.

Unfortunately, people have not yet adapted to the current reality. It is somewhat like a Jekyll and Hyde economy out there. We are in uncharted waters and we will be experiencing additional shocks, or after shocks. We are entering a nasty recession, not some mild blip on the radar and with it, a bear market with teeth. This will not be a short, shallow recession.

As a consequence, people will be a bit strange. Stress levels will be high. Many people will operate as if this is a mild recession, rather than the nasty thing it really is, and hope it will soon be over. It will get worse and we will experience lots of bad news in the months, and perhaps years, ahead. And, our stock portfolios will take a pounding. As we do this slow, inexorable downward spiral in fits and starts, anxiety will again rear it ugly head, not just once, but again and again, as the bad news continues coming. Cities and towns will succumb to the consequences of their poor financial planning. Some states may teeter on bankruptcy. The news will get worse, much worse, before it gets better. It's too bad we can't fast forward to mid 2009 or so, but that is the way it is and one might as well brace for the economic fits and starts.

In the midst of all of this, Americans will suffer withdrawal pains as the cheap credit with which we have funded our lives for these past years, is no longer available. How will we survive without our toys, without exercising that need for a quick fix and a spate of binge buying?

The good news? We are in the maelstrom and like a nasty storm that has been brewing on the horizon for some time, we are no longer observers but are in it, and we will be in the fight of it. The period of waiting with hushed breath is over. Most of us are resourceful and are capable of making good decisions and we will now have the opportunity to make them, and to use all of the stuff we have learned these many years while we sat, apprehensively waiting for this storm to arrive.

So relax, take a deep breath, and give your neighbors and co-workers a hand or at the very least, some slack. We are all in this together and at various times, it will be necessary for each of us to lend a hand to another, so we do get through this with decency and grace.