| 2009 – Back to normal? | ||
| In the current news picture dominated by credit crunches, bankruptcies and redundancies, it may not seem to be the most obvious thing to forecast that the world will return to normal within the next 12 months. However, it is what we do. Cash-flow psychology In the SAM Bulletin published in November last year, we described the credit crisis as a sudden rise of uncertainty. Two months have passed, and we still see that the key to solving the current crisis lays with the sudden uncertainty about the future. After the initial shock last autumn, financial institutions have had to adopt a more cautious lending policy. However, the lack of easily available credit has meant that even well-managed and profitable companies are denied the credit they need in order to run their business. That is naturally highly counter-productive, and the current situation can best be described as a global cash-flow problem. Government intervention In most industrialized countries, the government has stepped in and offered credit to the country’s financial institutions. However, the full effect is yet to be seen, and trust still needs to be built in order for the capital markets to fully restore themselves. Such trust is standing on two legs; one based on the rationales of macroeconomics, the other is based upon human, and, in economic terms, “irrational” psychological behaviour. Are we in recession? In many countries in Western and Central Europe plus North America, the answer is yes. However, most of these countries were in recession in most of 2008 but it took until October, before people at large started to take notice. Another indication is that housing prices in many major European cities have been declining for several years before people started to realise that it was a recession. However, economy is cyclical of nature, and we are now beginning to see that housing prices in these cities have stopped falling. It looks like one of the first signs that the economies are starting to correct themselves. Dare to trust However, we believe that the key element in restoring the global economy lies with the ability to dare trust one another. Many companies and many individuals have lost considerable sums in the last year, and it will take a lot of hard work to regain what has been lost. Therefore, it is only natural to be instinctively hesitant, and we need something, we can believe in to change our behaviour. The numerous government interventions to lessen the credit crunch may take us some way, an inauguration of a new American President, who made “audacity of hope” and “change, we believe in” his central campaign slogans, may prove to be highly symbolic in what will assist in the world’s economies taking a big leap forward. There are profits to be made The turnover of the SAM Headhunting Group in 2008 look to grow by more than 30 percent compared to the year before. We are by no means unique. In most European countries, the prospects of mass unemployment, in particular among experienced and well-qualified candidates, seem unlikely. The far majority of businesses are solid and will survive this period of contraction, and financial institutions will soon rediscover the benefits of lending these businesses money. Profits are there to be made, and like in every other business, it is one of the primary motivators of people and companies alike. | ||
| Date | 29-01-2009 | |||