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Friday, March 13, 2009

Economic Crisis Impact? It’s Only How We Deal With It.

As I See It
Working in a financial environment makes me more aware of “what is really” happening around. I deal with companies, our so called vendors and I can also see that each one of them has various reactions to the current economic downturn. To be honest. One of my contacts the other Friday was not anymore connected with the company the next Monday. In short, laying off happened.

In my side of the coin, I am seeing budget cuts, reduced spending and trying to renegotiate contracts to pay lower rates to contractors as argued from our side that the demand is so low against the supply (of labor) and it is only proper that their rates or we say, in a lay man’s term, prices, should also decrease. Admittedly, it is a sad reality and at the same time, it is really a messy situation and causing a chaotic effect.

in greed we trust, gree, economic crisis, economic downturn, economy is down, capitalism, failed capitalism, media, media influence

Why am I posting this?
As I have mentioned, others really do not react on this so-called “downturn” in a panic-stricken way. Just today, another vendor sent an invitation in my office for an open house of their products and the location is abroad but also here in Europe. I read the message of the CEO and I was really impressed of what she noted there. She sounds so optimistic about the current situation and as I read, a bud of hope also sprouted in my being.

The Media Factor
According to that certain CEO message that I read, that CEO indicated that we are all afraid because the media scares us. In fact other layoffs are only caused by fear and without real solid basis, but fear. It is the unfounded fear of the future, It is the magnified and exaggerated reaction to the situation.

It was noted that if we try to fight back, be strong and do not believe every utterance of the media, we can make it. If we are not afraid of the “unknown” and of the “speculations”, we will not panic and make drastic moves.

The Economic Factor
Noting some economical theories, we will or would or we do understand that spending is the lifeblood of the economy. When money circulates, the life remains into existence but if not, simply think of yourself without blood: death! The same is true with our economic system. I spend, you got my payment; you spend, she got your payment, she spends, he got her payment and so on and so forth and the life goes on. However, if the scenario is, “I do NOT spend”, the effect is YOUR death, HER death, HIS death, and so on. Thus, spending is important. If the private sector cannot do it, the government must at least have the initiative. But the sad story is, what happens now when the governments do not ave enough entite to initiate the spending as they have previously sold these entities to the private sector?

Now that the economy is “down” and with the private sector thinking ONLY of profits, what we can do all? If there are no people who gain salaries, who will buy the private companies' products? Eventually they would die soon as well. I hope they realize that and they don't think their workers are useless because an organization without peopleware is no organization or entity at all!

This piece was composed from the pesonal knowledge and experiences of the author. No references needed or used.


  1. the crisis in our economy all over the world affects everyone. we'll just part that it won't affects us no matter what...


  2. The world economy became greedy and believed there would be an unending cycle of profits and increased spending. This never happens. There is always a pullback.

    The current crisis has been more difficult than downturns in the past because the economy has become international

  3. I'm a firm believer in the economy being cyclical because human beings tend to be reactionary rather than precautionary.

    Downturn -> People save, no spending

    Saved a lot -> Spend -> Upturn

    Upturn -> People spend too much -> Downturn

    etc. etc. etc.

    That's a complete oversimplification if you take it at face value, but it really applies to the majority of crises and markets.

  4. @Nova,
    Indeed, the results can be seen everywhere, whether people are directly affected or indirectly, it leaves the marks.

    @Dr. Bruce,
    It's sad to accept that capitalism is also failing. What else is left? Communism has failed as well.

    Indeed it is a cycle as everythings seems to be. And as they say, history repeats itself but can we just repeatedly have the good side so that everybody is happy?

  5. It's a hard time... but we should survive

  6. hi Sam is my best friend that we used to study together in school :). johor bharu is most near to Singapore. Its where Singaporean need to exit from there to enter Malaysia.

  7. by the way, you have good blog with good contest :). Yeah my sis has her salary cut 5% sad and even more sad she resigned and going away.

  8. I think that the economic crisis wouldn't be as drastic and terrifying as it is now if the media haven't spread so much focus into it. Fear to invest and to spend is the major root on why our economies are now on a spiral.

    If we haven't panicked back and then and started pulling out of business ventures, I'm pretty sure things would be less fearful than it is now.

  9. I agree with Liane, there are times when Media is very successful in instilling fear by sometimes exaggerating some facts especially about whats happening in current (financial) events.

    We should always be conscious about our spending habits as our spending mistakes may affect the not so good standing of the economy right now. :(

    Hang on everyone, this one will pass. :)

  10. I agree the media factor has "magnified and exaggerated reaction to the situation."

    Each of us needs to take a step back and try and put this downturn into perspective, looking at how to move forward as hard as that can often be.


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