Busted: Bankers and The Global Economy

November 5, 2008

Post-Election Rays of Hope?

eight-ballRetailers are strategically masterminding new ways to get you to spend your money. Considering that the cost of gasoline is down, the job has suddenly become somewhat easier. All over the world in prime economies, news articles have appeared after the U.S. election celebrating a suddenly brighter consumer picture. The picture is not exactly what it seems.

Retailers are taking drastic action through hoarding cash and cutting prices in the hope of adequately coping with an ongoing recession, projected and expected to last until about the summer of 2010 by many economists and analysts. Real world retailers are suffering greatly because of the new digital economy of the internet. Even internet retailing isn’t so rosy as businesses must cut prices in order to get the attention of consumers and keep sales even. Slumping sales have been a major problem, even among the garage sale atmosphere of Ebay, where prices can’t seem to go low enough to satisfy the buyer. The cheap cost of new goods makes the value of used goods virtually worthless. The only hope is to try to make a dollar or two on handling fees or shipping.

For the fickle world of investment, the immediate prospect looks even worse. A glut of new shopping facilities, the rising cost of importing goods and the growing impact of internet shopping are creating new pressures with the result that profitability is suffering, even as the holiday season comes full circle once again.

getting noticed

getting noticed

What most larger businesses have done is to chop into their cache of innovative ideas or even the prospect of considering them. One ray of post-election hope is for the small businessman online if he can just get the attention of the browsing public. This assumes, of course, that the public knows what it wants before they get online. That isn’t how most customers shop. Advertising is down and snafus among the gloried advertising models of Google and Yahoo don’t seem to make the prospects brighter, only muddier. This bright side for the consumer is that prices are coming down and monetary units are going farther for the first time in years. This natural price adjustment is a natural part of the cycle fueled by years, perhaps decades of abusive overpricing, lending and credit.

As former corporate employees wear out the availability their unemployment checks, reserves and pensions, they will be forced to be creative in order to survive. Ultimately, this means a boom in new small business ventures. Most of these new adventures are operating on a shoestring of personal finance, leaving investors little opportunity. Those that are willing to invest what they have in themselves will eventually encounter great opportunities as they work through the trials of getting their business model right. The small businessperson is the new ray of hope for the foundering global economy. ~ E. Manning

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