Like a bad dream, this recession may be wrapping it’s dang self up.
The circumstantial evidence is everywhere that the worst may be over, and BusinessWeek’s Harold Sirkin sums it up nicely.
The rebound, if that indeed is what we’re seeing, hasn’t shown up in the government statistics yet. But the government’s economic performance and job numbers, compiled by the Commerce and Treasury Depts. and the Bureau of Labor Statistics, always lag performance. Remember: We were well into the current deep recession before the National Bureau of Economic Research, the official arbiter of such matters, declared that the expansion that started in November 2001 had peaked in December 2007.
Like our firm has done, many companies are using the recession to get into better shape and “Preparing to Win,” as Sirkin says. In down times, firms cut excess costs, which sometimes means making the hard decision to cut staff. You can buy “wounded” assets on the cheap, Sirkin says, and capture new customers from hurting or bankrupt competitors. There’s also world-class talent to be attracted from those businesses that can no longer afford to pay the market rate.
For more from Sirkin: The Downturn: Is the Worst Over?
Tell us a bedtime story. Have you used the “recession” to your advantage?
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There’s an interesting counter-argument to Sirkin that suggests that we’re through the first, smaller wave — and it has little to do with the health of business sectors or companies. Wave one saw individual assets shrink dramatically — home values have dropped 20% and individual retirement accounts double that. Wave two is all about consumer debt. The question is whether the government and private sector can manage this second wave effectively enough before it drops, and minimize its impact.