The Bears Are Back
By admin | July 2, 2008
By Mike Myatt, Chief Strategy Officer, N2growth
It was just a matter of time until it became official…The Bear Market has returned. The Dow Jones Industrial Average closed today at its lowest point since the summer of 2006 falling more than 166 points and finally coming to rest at 11,215.51 at the closing bell. Those of you who read this blog frequently know that I’m perhaps the antithesis of a pessimist, but I do consider myself to be a realist. While today’s close wasn’t necessarily any great surprise, it nonetheless merits coverage as this is just another piece of the economic puzzle that will vex many an unprepared CEO. In today’s post I’ll take a brief look at yet another sign of the rapidly declining US Economy…
With the US housing market in the tank, oil breaking $144 per barrel, The Fed exhausting its intervention options and Bernanke now warning of inflation, and the US dollar still hovering near its lows, it was just a matter of time until the stock market fell into line. It is “officially” considered a Bear Market when Blue Chip stocks close more than 20% off their highs for an extended time. You might be thinking that a 20% correction isn’t all that bad, but let me put it into perspective…The US stock market has lost more than $2.1 Trillion dollars in value since last January. That’s Trillion with a capital T…
I’ve been warning readers about the waning economy for well over a year now and as the avalanche of negative correlations continue to fall into place it doesn’t take a rocket scientist to figure out that the US economy is in trouble. As inflation begins to show itself as a highly probable outcome and spending becomes even tighter, your business will have to work that much harder to compete in the marketplace.
I’ve said for a while now that the economy will get worse before it gets better, and I still believe that to be the case. While many companies will not fare well in the weeks and months ahead, for companies with excellent leadership this economy is not only survivable, but it provides an opportunity for companies to prosper under the right direction. My advice is this…be smart, reexamine your business model, get very tactical, and get very aggressive in your marketing and business development endeavors.
Topics: Economics |
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