I’m going to call it. Recession is a dirty word, a word that just doesn’t roll very easily off politicians tongues. It’s not what you want to hear, and it’s a word that you just don’t want to use in an election year. The Boston Globe yesterday quoted Peter Dunay, chief investment strategist for New York based Meridian Equity Partners, as saying that ” . . . [t]his is why we’re probably heading into a recession.” Kudo’s to you, Peter, for heading down the pathway that few have dared to go, even though you put on the brakes with the “probably” qualification. Henry Paulson, the Wall Sreet titan who is currently the Bush Administration’s Treasury Secretary, stopped short of using the bloody “R” word, but has acknowledged that the economy has slowed down. Mr Paulson stated on Good Morning America this morning that the economy has taken a downward turn. When I see a man like Henry Paulson sitting at the helm of the Treasury Department, and taking a front and center position on the morning talk shows to ease our concerns, it makes me comfortable. It really does help. I do know, however, that when I see JP Morgan tap dancing on the grave of Bear Stearns, doing the same jig they have done on many graves in the past, I know that we are in a recession. Chase is the grim reaper of the economy. All banks tend to take away the umbrella they gave you when it starts to rain, but no bank is better at not only taking away the umbrella, but stepping on the face of its troubled clients; clients that it financed in the first place, and then buying their businesses out from under them. You know that the jig is up when you see Chase circling overhead.
It’s not, however, all that troubling to say that we are in a recession. Recessionary times are challenging, and they require a different set of skills. For those of us that are used to workouts, and tough deals we’re okay with the word recession; the more hair on it the better we say. There’s opportunity in tough times, so let’s just deal with the fact that its here, and do our best to bust out of it. There are many strategic business moves that can be made in these times that will position the smart and the street-wise to take advantage of the inevitable boom cycle that will follow.
We like to help clients understand that if you are in a position to invest, build, create, produce, and deliver in times like these, you can position yourself very well for the next cycle. And let’s face it, you’ll be helping move the economy out of its “slump” or whatever they want to call it.