As George Orwell put it, “It is a feeling of relief, almost of pleasure, at knowing yourself at last genuinely down and out. You have talked so often of going to the dogs – and well, here are the dogs, and you have reached them, and you can stand it. It takes off a lot of anxiety.”
If these words mean anything to consumers and investors around the world, it’s to those anxiously waiting for the bottom:
The bottom of stock markets, the bottom of housing and credit markets, the bottom of ambiguous recessions muddled by GDP reports.
Perhaps Orwell would top even Warren Buffet as an oracle.
In a recent Op-Ed piece in The New York Times, Buffet assured investors that now is the occasion to buy American stocks. Not a bad idea, considering the Dow was at a low of 8,578 the day before his piece ran. But that suggestion looks less promising than it did two weeks ago as stock markets continue to tumble. Today, the Dow closed at 8,176.
Buffet, himself, has lost $9.6 billion in equity this year, according to a recent story in The Wall Street Journal.
He did write in his call to investors, however, “Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now.”
The CEO of Berkshire Hathaway can certainly afford the gamble, despite his loss. For the rest of us, there are plenty of opportunities on the horizon to buy cheap and lend at high risk with a chance of reward, plenty of opportunities for new home seekers to go bargain hunting, and plenty of opportunities for graduates to find jobs once companies start to hire again. But not until the economy — at least ours — truly bottoms out.
It’s a matter of physics. You can’t pick something up when it’s still in the process of falling. Sure, you can try and catch it mid-fall, but that might just hurt your hands.
In the meantime, enjoy the little perks: overheated rent prices are beginning to cool down; Barack Obama stands a better chance in lieu of McCain’s displays of financial ineptitude; there are more free ATMs available for WaMu customers (maybe even ATM fees will start to decline as a result); and everyday goods and services, with a few exceptions, are getting cheaper – just wait for gas.
Some of those perks might not help lift the economy, but se la vi, the economy’s going to the dogs anyway…