It's A Deal
January 2, 2009
Same Old, Same Old
Nothing lasts forever. That includes Indian Summers, a bunch of good shots (in a row) on the golf course, any diet I'm on, and, most importantly, current financial conditions.
Sure, we head into 2009 coming off one of the all-time worst stock market performances ever, and with only half of the standalone, bulge-bracket I-banks we had a year ago. But common sense would suggest things can't be nearly as gnarly in '09 as they were in '08, right? Right? Please say that's right!
So, as we put behind us what was in many ways a horrible year, and position ourselves to break the resolutions we've made just hours ago, let's hear it for the business cycle. It'll always be there for us, unlike our fickle friend willpower, which deserts us at the first sight of a juicy steak.
Back in the heydays of the late '90s, there was a goodly portion of the investment community that was fond of saying, "This time it's different." This was the crowd that, at least publicly, believed sock puppets as company spokesmen, and metrics like "revenue to eyeballs," really and truly made sense. It was a "new paradigm," they told anyone who would listen.
The good news, of course, is that they were wrong. A geeky tech analyst with a flair for words can convince some folks some of the time that a company with three hundred grand in revenue should price its IPO at $1.3 billion, but at some painful point reality sets in.
Luckily, that's a phenomenon that works both ways. Just as the market a decade ago decided to put a value on Priceline.com that exceeded that of the entire airline industry, it can also price Citi for failure. Both are absurd, and neither lasts.
There's something else at work now, too, and that's the collective input of governments around the world. Some will correctly point out that such attention from folks who don't often get things right isn't necessarily a good thing, but the massive scope and size of government backing, from all angles, eventually does its job, even if the execution is flawed. Horribly, horribly flawed.
So without minimizing where we've been, and what lies ahead, we enter the new year knowing that, yet again, this time it's also not different. Three cheers for the business cycle.
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