Finding a Bottom: The Numbers Aren't Enough

Many financial bloggers pay a great deal of attention to data and trends. Yet in my view, the numbers alone aren't enough. Decisions that drive markets and economic activity are made by people. They, in turn, are influenced by experiences, emotions and attitudes, among other things. When people feel good about themselves or are optimistic about the future, they buy or borrow. When they are uncertain or anxious, they sell or save.

Under the circumstances, the following BusinessWeek commentary, "Welcome to the Frozen Economy," by Shoshana Zuboff, author of The Support Economy: Why Corporations Are Failing Individuals and the Next Episode of Capitalism, suggests that those who are trying to figure out when a bottom might come by focusing almost exclusively on what the statistics say might be somewhat misguided.

Comments

[adan]

that people's emotions and ideas are what guides the markets, and much else, is probably well known by advertising and wall street and politicians - i myself am just now beginning to see how primal this may be

nice short article, thanks

[John Egan]

Hmmmm .. And here I sit thinking that the data and trends are what investors look at as a means of determining what the great unwashed masses are thinking ..... jegan ;-)

[Lansingman]

The "Frozen Economy" article if anything shows how short people's memories are. Back in the 1930's thousands of banks were folding without any FDIC backup. Over 30% of the people were unemployed.

Our cost levels of food and fuel are still below Europe's typical prices. Our current unemployment is less than any of the major European countries.

The author chastises GM for wasting opportunities to develop more efficient engines. Maybe the real issue here is the folks sitting around in restaurants that wasted the opportunities to save a few bucks during the "good old days" whenever they were.