Saturday, February 21, 2009

Crisis of ...? And the Clinical Optimists

A number of times in the past I have read that current crisis is the crisis of confidence and not cash, at least in India. This is not referring to the ever plunging indices. There indeed it is a fair lot of foreign money that was buying has been selling. But the statement above largely refers to the contraction of consumption. Consumption of goodies in malls, supplies in supermarkets, vehicles in auto lots, houses in residential markets and all those other purchases that have been either cancelled or put on hold by millions of Indians, fearing, hmmm, well, what??? Job loss? Respective industries going to dirt? Erosion of savings? General fear for financial well being? Impending political changes? Terrorism? Perhaps, a concoction of all these has made a drink potent enough to pull the rug under our feet. And rightly so. 

There is never a small talk over coffee or drinks that does not find this topic creeping into it these days. A topic of how robust is India's internal consumption story? To what extent are we export economy driven? We all agree we are no China (didn't we mourn that until not so long ago?) but we do not seem to be able to place the economy on the continuum of worse hit to less hit. (There is no one, in my opinion, who is unaffected.)  And it is through these conversations that the pessimists slowly start turning this crisis of confidence into the crisis of cash! A Self full filling prophecy! 

When does our collective caution turn into a collective disaster? Are we there yet as a country?? I strongly believe not. I am no expert in other sectors. But for Real Estate (I am no expert here either, but it is just that I work in this sector!) I always felt that February would bring a small cheer. And it has been the case. This month has been substantially better than anything we have seen post September 2008. For a variety of reasons! The 'doomsday predicament' of the buyer has at least changed to a 'fairly glum outlook'! And the media since the beginning of 2009 has decided to belt out relatively positive notes as opposed to what they were doing for 12 months prior to it. Most of it is still as ill-researched as it was then but now they are spinning the web the way the people who pay for fancy adverts want. Survival! I believe the month of April and May will again see a change in outlook for two reasons. First is obviously the political uncertainty will start to get reduced and secondly because the common folks  would know whether they are keeping their jobs next year and how much is their expected income! 

Even then the pessimists will cry foul. They will try to tell that it's is not over till it is over and over it will never be to these good Samaritans who are spending their hard earned cash on making this a crisis of sentiments and therefore, for the good of the entire country including those sly pessimists! Ha! 

So kudos to you people, who take a more balanced view. Who decide to cross the bridge of a total utter failure of financial world when we (if we) get there! Who look for opportunities and make a grab at them! Who understand the sinusoidal curve of life! Who can see, relatively well, through the BS of extreme negative and dispairing (and if you care to remember the extreme positive and euphoric) sentiments. Who are driven by logic but understand sentiment.

Basically if someone will make this country weather and come out shining much better is those 'clinically optimistic' people!!

1 comment:

Mukul JD said...

'clinically optimistic' !.. i love that term !

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