Thursday, January 08, 2009
Fear and the Future
Predictions. We hear them all of the time. "It's going to get worse before it gets better" "Gas will be up to $5 a gallon next year" "Pass this stimulus package or it'll get worse" and on and on. One thing I learned from this last year is that people who predict things tend to be wrong 40% of the time. The farther out a prediction goes the less accurate it gets and the more forgettable it will be. For instance I could predict that gas will go up 5 cents tomorrow and I would have a better chance of being right than if I predicted it would go up 25 cents tomorrow, because it is not a radical outcome. People who say we are going into a 2 year recession have a much higher chance of being wrong than being right. Anything projected out 2 years is quite frankly, bunk.
But, the real effect of predicting a bad future means that today becomes bad and not the future. Fear drives the markets down. Even stimulus packages drive the markets down. I think the last one proved that banks would rather keep the money than spend it. I know if I was given stimulus money I would put it in the bank or pay on a credit card. That doesn't really drive the economy. Even businesses would not start a hiring frenzy with bailout money. I would pay down business debt.
There is so much fear out there. I have never seen so much hype. All of these long term predictions are coming true in the short term and they are affecting real Americans and not just businesses. Say I want a really good job. They are now super hard to find. Say I want to buy a house because the market is good to buy. I cannot since I could not sell my existing house. We, the consumer, become stuck and fearful. We start to hoard what we get. We learn a lesson that we should have learned years ago. It is a different world now.
I have thought in the past to get government grants since I am a green business. Especially with the new administration already talking about building up the green industry. The problem is that grant writers can cost 2K to 25K just to get a good proposal written. Then it takes about a year just to get the money. Then if I don't get any money I would have wasted time and effort in the whole process.
Yesterday I got a call from Glamour Magazine asking for a gas quote on what carpoolers save. It should appear in the March edition. I am going to put one more ad for Radio and TV stations to see. Hopefully I can bring some hope back to America.
But, the real effect of predicting a bad future means that today becomes bad and not the future. Fear drives the markets down. Even stimulus packages drive the markets down. I think the last one proved that banks would rather keep the money than spend it. I know if I was given stimulus money I would put it in the bank or pay on a credit card. That doesn't really drive the economy. Even businesses would not start a hiring frenzy with bailout money. I would pay down business debt.
There is so much fear out there. I have never seen so much hype. All of these long term predictions are coming true in the short term and they are affecting real Americans and not just businesses. Say I want a really good job. They are now super hard to find. Say I want to buy a house because the market is good to buy. I cannot since I could not sell my existing house. We, the consumer, become stuck and fearful. We start to hoard what we get. We learn a lesson that we should have learned years ago. It is a different world now.
I have thought in the past to get government grants since I am a green business. Especially with the new administration already talking about building up the green industry. The problem is that grant writers can cost 2K to 25K just to get a good proposal written. Then it takes about a year just to get the money. Then if I don't get any money I would have wasted time and effort in the whole process.
Yesterday I got a call from Glamour Magazine asking for a gas quote on what carpoolers save. It should appear in the March edition. I am going to put one more ad for Radio and TV stations to see. Hopefully I can bring some hope back to America.
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