Worst is behind us…really?

I thought the crisis of this magnitude would lead people to say we will be careful this time, no hype, no baseless forecasts etc etc. However, I just see the opposite.  I had raised this point earlier but requires a revisit.

Everyday you spot one interview in the business dailies of some CEO/CFO/Fund Manager etc saying

  • Worst is behind us.
  • The crisis is history now
  • India Inc is unlikely to see similar times
  • We will never visit the 8,000 BSE sensex levels .
  • Indian economy is expected to grow at 8% and hence sensex will rise to 20k/ 25k/30k levels.
  • The event was a mere blip in the Indian economy growth trend.
  • Some have again started mentioning the word decoupling
  • Etc etc

All you feel like doing after reading these statements is go an a hair pulling/banging spree. How can these  people forget events so fast?  It is well known and researched that people have short memories and don’t remember history. But the crisis has not yet become history? It is still ongoing,  very much alive and kicking.

And again we get the same set of statements which experts said as the crisis had just hit US shores. I can understand their statements going wrong as the crisis  had not hit Indian shores. What I don’t understand is how can we repeat the same statements which have been proven false outright as crisis hit India. And most of these experts have high responsibility jobs. What is going on really?

What is also bugging is that we have just seen how badly equity markets go wrong in telling us of the economic sentiment. But again we are just seeing the current rise as  one of glorious Indian economy.

I have shared this with people working in various industries (mostly finance). And they say we are concerned as well but the experts don’t have a choice. As a CFO/Fund Manager you have to give rosy prospects of the future. Your job depends on markets only going up. Moreover they add, financial markets are forward driven and cannot be backward looking at history.

Phew! It sounded ridiculous to me at first but the points are so true. In fin markets we only think forward which is why we conveniently choose to forget history. And no wonder, the problem keeps getting worse and experts appear so shocked when the same set of events are repeated. This is a much bigger problem than the crisis itself. It is not just that forgetting history harms oneself, it causes harm to others as well. Especially when you have a responsibility towards investors, shareholders etc.

One Response to “Worst is behind us…really?”

  1. Looking at rear view mirror is as important Sirs!! « Mostly Economics Says:

    […] part of our strategy.   I read this rear view mirror analogy too often by CEOs (However CFOs say this). It is important to be forward looking and drive the car looking ahead. However, looking at the […]

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