Where’s a crystal ball when you need one?

66% of the 3000 conference attendees predict that it will be 2013 before Americans’ net worth will return to its mid-2007 peak. Are they pessimists or realists?

Kenneth Griffin, CEO, Citadel, says that it’s “time to give businesses opportunities, not handouts,” if we want to see sustainable recovery in short order. Steve Forbes, Marc Lasry, CEO Avenue Capital Group, and Mohamed El-Erian, CEO, PIMCO all agreed with Griffin that our society cannot accept a system that socializes massive losses and effectively rewards the losers. What they did not agree on was how long the doom & gloom would last. Marc Lasry predicted pent-up demand and good investment opportunities over the next 12-22 months, but Steve Forbes predicted the recovery will be at “half-speed” and more of a  mini “bounce”. Consult your own crystal ball here.

With a general acceptance that there is currently no driver for the U.S. economy, all four business leaders questioned what sort of ride the small business owner could expect.  How far could small businesses go if the fuel of funding is no longer available? According to Griffin, the primary funding source small business owners use to capitalize their business is credit – credit cards specifically. And with new credit card reform legislation taking effect, their road to recovery will likely be much longer, harder and uncertain at best.

While today’s climate may show a small, natural bounce back, Steve Forbes believes we have created an environment completely “inhospitable to innovation and start ups.” We are headed for “long term devastation” he added. Hardly a cheery view in his crystal ball.

Even Mohamed El-Erian stated that we are on a “bumpy road to a new destination,” and said he missed his biggest money making opportunity by not copy-righting the term “the new normal.” Somewhat of a bitter-sweet view in his.

Business owners around the globe are transitioning through a permanent shock to public finance, and El-Erian refers to this transition process as the “recognition lag.”  He recounted his resistance to change when new technology was presented to him, requesting instead to have the change begin with his employees. Once his employees accepted it and it was his turn to face change again, instead of placing a call for help with the new way, he placed a call, asking, “Can’t we still go back to the old way?”!  El-Erian pointed out that it is only when we are faced with overwhelming evidence that change is here, and it is here to stay, that business leaders will act. The “new normal” is such a change, and the overwhelming evidence of a new normal is here.

by AmyK Hutchens
Founder & Intelligence Activist
www.amyk.com
Twitter: @AmyKinc
Twitter: @AmyKHutchens
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