Stop Feeding the 'Monster'

Nor' east Thinkin'

Look beyond the economic panic; avoid fixating on bad news

Published on: November 26, 2008

‘Monsters’ are perceptional images arising from talk or action that take on larger than life attributes. We try, for example, to teach our kids that “greed” can grow into an ugly green monster that can panic us if we don’t control it.

In that sense, the monster can bite. If you own stocks, mutual funds and other investment vehicles, you’ve been bitten.

 

Take the recent news headline: “Bear market is like nothing America has ever experienced”. There’s nothing like a good bad headline to incite fear and make the monster grow. But if you’re old enough and/or a voracious reader, you’d know that the current recession is by no measure the worst America has experienced – and survived!

 

In media circles, bad news is good news. It raises readership and program ratings. And that helps raise advertising revenues. So, bad business news generates good business. It’s hugely important to feed the 24/7 news monster fixated on it

 

As a society, America is suffering from greed and the fact that we’ve been keeping that little monster well fed for decades. The trouble is that it’s never satiated; It only hungers for more.

 

Our financial markets and auto makers willingly fed the monster. But not all banks are failing – just those feeding on short-term, risky deals. Not all mortgage companies are failing – just those who bought into sub-prime, quick-buck temptations. Not all auto makers are failing – just those that are poorly managed and without vision.

 

Rethink your thinking

 

As I noted in December’s “Food for Thought” column, we all need to watch the news less and use the tools that our forefathers and grandfathers used to build America’s agriculture – sharp minds and calloused hands. That’s still the proven success formula for today.

 

Once America starts living within its means, we’ll again grow in economic strength – this time, hopefully, with more wisdom and vision. It starts by separating what we “need” from what we “want”. Sure, consumer buying is slowing! It’s long overdue!

 

The sky isn’t falling

 

In case you were so fixated on bad news that you missed the good news, here’s a quick recap of a few recent items:

 

Consumer savings already have started to increase! That hasn’t happened for decades.

 

The U.S. recession is unlikely to continue past first-quarter 2009. And after the economic slumps of 1929; 1987; 1997; Sept. 11, 2001; and 2002, the stock markets have always made new highs. And the largest gains have been realized during the first year of the terms of Democratic presidents.

 

Oil and gasoline prices have plummeted. Does that mean we can drive gas hogs with a clear conscience again?

 

Winter heating costs have dropped due to falling natural gas prices. Crank up the thermostats and enjoy?

 

Nitrogen fertilizer, feed costs and food costs are dropping. So now we can resume our old habits?