The theory most often pointed to by economists displays big sine waves, and they note that “everything that goes down always goes back up.” While the economic theory may be true under normal circumstances, when markets can adjust on their own, the depth of the damage to the housing markets, banking industry, stock market and employment base may not allow a swing back in the upward direction for some time.
It has been predicted that home prices will continue to fall in 2009. The banking industry is in a state of panic, and borrowing money has become one of the most difficult things that you can do. The stock market has fallen so far that the charts on most businesses mirror the classic bankruptcy profile of the past, and various experts have predicted a 10% to 20% in further declines. Finally, unemployment is headed for new highs and the 10.0% figure that many fear could easily be broken.
Government proposals like the abolishment of the home mortgage interest deduction and the government’s approval of cram downs could make things worse, not better.
So what should a businessman expect? It is likely that the slowdown will continue for everyone through 2009. Getting through another year or more with poor economic conditions will be a challenge for almost everyone. When the economy does begin to rebound, there should be some great business opportunities, simply because some competitors may not survive the shakeout.
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Obviously the quote “everything that goes down always goes back up” doesn’t apply to a company that closes its doors for good.
There have been recognizable trends and cycles in the markets for decades, but we’re seeing things that have never been seen before.
Yes Ricardo is right, the theory stated above does not apply to a company that closes for good.
I think that in 2009, more and more businesses will permanently close.
But when they survived 2009, their business will be stronger and more stable in the years to come.
Obviously I’m talking about markets and not companies. With government intervention even failed companies can bounce back. Close your doors today and open back up tomorrow after the Treasury drops off the check.
They may be right but halting isn’t always the best option since. Specially for smaller business since they have not much option or a backup plan.
I think that not everything that goes up will go down eventually after a recovery of the economy..not on commodities since its been my observation that if the prices will go up it will never go down especially on the basic commodities.
I really agree on the following statement and i quote “When the economy does begin to rebound, there should be some great business opportunities, simply because some competitors may not survive the shakeout”. I’m not a businessman but i do believe that during this time of crisis ..businessman must take measures to at least minimize on their expenditures .
Yeah but if you think of it, what will happen to those who couldn’t survive? Don’t you think that’s also a loss for the community?
Hoping and praying that for the year 2010 and up to the present, the predictions will be better. The recession now that is happening in our global country, is just a challenge for everyone to becoming more ready to better opportunities. It is good to be optimistic from the depression or negative situation for us to carry out everything and make better change.
We need now to become more careful with our expenses. If we could be as thrift as we can in spending the right thing that is only very needed. Very vital now is to learn how to save money for future purposes due to slow flow of the business today.
It generally boils down to the basic instinct of survival of the fittest. Competition becomes more fierce and businesses which have been already established would roll over and the weak ones would be run out to extinction.
Admin says, “Everything that goes down always goes up”. Like marketing a jacket, its production will slow down during summer, but if the winter or cold time comes, lot of customers will going to buy it and the production would goes up.
Don’t worry guys if your stocks went down, there is a right time for it. It’s just one of the nature in business.
So challenging, right?
I would rather say that conservatism in business should be implemented..in this way we can control or even maintain the flow of our earnings/income in our business..high risk investment is a no no..in times like this..
Well, I perfectly understand what you mean lyka. However, in business industry we really have to take risk if you want your business to be successful. You have to go out of your comfort zone. Do you agree guys?
Good point Mozart, though its so scary to take risk when we have this kind of situation now with our economic. But trial and error as well as marketing strategy will going to be part of it when you want to start up business.
Surely, the economic crisis would be a challenge to every business. However, as long as the business stands firm it will overcome the challenges. There will be times wherein they would experience slowing down but this is part of business as well. “Everything that goes down always goes back up”, I believe in this statement. We will never run out of options, right?
No business can perpetually make money, ups and downs are inherent part any business. In the long run only those businesses survive which can plan for future, invest in newer technologies and innovate to stay ahead of competition. History of successful companies like Walmart, UPS proves it.
You got it perfectly, millionaireman. This economic crisis that we are facing today is just one of the challenge in our business. What do you think is the best thing to do if you feel that your business is already sinking? Do you think you need to make another strategy plan for this?