I see a lot of fiddling while the economy burns. In fact there appears to be an air of "phew that's over". The recession drops off the media's radar thanks to their infantile attention spans. Please be aware that this recession hasn't even started - and plan your coming years accordingly.
if ever there was a time to ttjasi, it was 2008 :) In 2009, think twice and three times before you cast yourself adrift. This not to say don't do it. it is just to say make very sure you are ready and financially rtobust enoguh to do it. There will be opportunities aplenty in a recession. There will be many more dangers too.
According to McKinsey
Financial crises occur with surprising frequency—in every decade in the past century there has been at least one big shock to a major economy’s financial system. Judging from that history, the current upheaval will probably rank among the largest, and we face the prospect of a severe, painful recession. Yet comparing the current financial crisis with those of the 20th century may provide some comfort: the impact of past crises on the real economy was by no means uniform, and it depended, critically, on the way governments acted to recapitalize the banking system and to restore stability and confidence.The boom that preceded the present crisis uniquely combined several leverage-driven bubbles: a residential-mortgage bubble, an associated one in the real-estate market, and a bubble in corporate earnings. At the time of writing [December 2008], US financial institutions had taken total credit crisis–related write-offs of almost $1 trillion. McKinsey estimates that the total eventual credit losses in the United States are likely to be between $1.4 trillion to $2.2 trillion in a base case. The losses will be greater if another major asset area (such as credit default swaps) collapses ...
This base case range of possible losses represents 10 to 15 percent of US GDP. By historical standards, that is substantial. In the past century, it was exceeded only three times: during the banking crisis that inaugurated Japan’s “lost decade” in the early 1990s, the Asian financial crisis of the late ’90s, and the Great Depression....
On average, countries have needed two years to emerge from past recessions after major banking crises and up to twice as long to return to trend growth...
There is, however, one important difference in the current crisis... This time, corporate earnings... experienced a bubble as well...
By historical standards, the real-estate market bubble is more worrisome... Going into the present crisis, the US economy was more exposed to real estate than ever before... Losses in housing, when realized, could be of the same order as in the stock market as of early December 2008...
We do not yet know how the current crisis will evolve. The confidence of consumers, corporations, and investors—a key factor—cannot be forecast. Nor can government policy.
I took a gamble three years ago and went out on my own to chase web-based income streams. My first year's income was a third of that of the previous year. Then I had a good one (thanks to consulting not to any of my ventures). this year is down again. next year could rub me out. Do I come back in from the cold and *shudder* get a real job? Or will ITSM benefit from the recession (as it often does, as people try to increase efficiency)? You should be asking yourself the same strategic questions right now. if you have your own buisiness, how will it survive? If you are employed, what is your fallback if you get laid off? In either case, what are your accessible reserves and how long can you live on them? Can you get out from under some financial burdens now while they are still worth something? And so on.
It is not over, it is just beginning. The world's financial managers just might get us through this unscathed, probably by flying through on pigs.
At a business level, McKinsey are bullish
...research shows that in past recessions, companies pursuing a purely defensive strategy fared less well than their more active counterparts. As the economy enters what will probably be a difficult downturn, companies should prepare to seize their opportunities.
For those of you running your own businesses it may (or may not) be a time to take some calculated risks. For the individual I think the message is clearer. We bear the brunt of retrenchment, of business failure, of falling asset values. Storm coming.
Be ready. Batten down the hatches in your life.