Morning Folks!
Yes, you heard me right. We are on the doorstep of a huge
economic boom. That is the really good news. Now for the other side. After that
great boom that we are about to experience, I expect a collapse rivaling this
past spring with a little more pain felt throughout the population. I expect
the pain to actually begin. The pain for the common man.
So this is what I expect. The common wisdom is that the
market will collapse in October and that it is soon time to get the hell out of
the market. That thinking should lead to a September meltdown. Not October.
Then I expect online ad spending to be at a pace that we
have never seen before. It may be the last gasp for many. They are going for
broke. They have nothing to lose at this point. Their business models are collapsing and so why not go for
broke? If they declare bankruptcy in January, what exactly are they going to
lose? The only ones that will lose are anyone extending them credit.
But that is good news for us, even as short lived as I
expect it will be. The payouts should really start to move up as bidding begins
to heat up. We are a market. If you don’t see payouts go up, and you see the
buys increasing, then you know we are getting hosed.
The experts as I have said are no experts at all. They will
continue to be surprised because they have lost or never had what it takes to really
understand what motivates movement in any direction. They guess and they are
usually wrong.
So get ready for a wild ride. This fall will not be boring.
The antics will be off the chart. The question is will the consumer respond or
will they save? When Christmas comes and folks give $100 gas cards as a
present, that does not count. Those are dollars that are going to be spent
regardless. So if Christmas becomes a Christmas of necessities, then there
is no fuel added to the economy.
If you are a seasonal business in the northeast USA, chances
are you had a terrible summer season and making it through to next year is
going to be tough if not impossible. I can’t even estimate how many of those
businesses won’t be back next year.
There are some dollar$ flying around and there is some
decent activity fueled by the stock market. But this may be pretty short lived.
The fundamentals, the deficit, the weak dollar, the high unemployment, problems
with states and other municipalities could complicate things. Could strangle
any recovery. That is before we even talk about the unexpected.
Bottom line, even tho there has been more economic activity,
it is because inventories were very low and at some point you are forced to
buy. The problem is with each passing month the “Burn rate” for both business
and personal is getting more and more serious for a larger segment of the
folks. There is a breaking point. The beginning started just a few weeks back
when the first group of 140,000 people had their benefits for unemployment
stop. By this time next year that number will grow from the 140,000 to several
million. 5, 10 million. A really huge number. A really big problem. Compounded
by the fact that many of these millions of jobs lost are never coming back.
Meanwhile you can make a lot of money in this turmoil, in
this crisis, in this great period of opportunity. Life changing opportunity.
Isn’t that what it is about? Isn’t that why you read this blog and others? You
can’t chase yesterday’s opportunity and find success, you can only recognize opportunity for now
and tomorrow. The best way to do that is to have a working assumption of how
things will unfold and proceed. Make adjustments every step of the way but
never lose the way.
Have a GREAT Day!
Rick Schwartz
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