Financial High Anxiety

I wish I hadn't turned on the radio yesterday. Or today. But I did. I heard about the Lehman Brothers bankruptcy and how AIG is experiencing difficulties. Over the last two days, I heard multiple references to The Great Depression. I heard the phrase "run on banks." I heard about how the stock market fell 500 points yesterday. I heard how other countries' markets and governments are reacting. I feel anxious.

Intellectually, I know that there are safeguards in place. I also know that I can't control the financial giants and that I can control my own financial habits. Still, I feel anxious.

Last week I listened to an Economist speak for Vistage at Butler University. Alan Beaulieu is half of the twin brother team at the Institute for Trend Research. Alan and his brother have been pretty darned accurate over the years in forecasting economic cycles. I heard him speak two years ago and near-term forecasts he made then have come to pass. In this most recent talk, he said that we are not in recession yet, but that a pretty steep recession is coming - worse than 2001-2003. Among a ton of other interesting things (maybe I'll write about those in future posts), he said that the The Fed is worried about cascading bank failures.

Um, cascading bank failures? Hello Lehman Brothers.

Nila feels mounting anxiety.

I think Alan had it right when he led the audience to conclude that it all comes down to three factors: greed, incompetence and stupidity. I heard a commentator this morning on All Things Considered, an NPR program presented locally on WFYI 90.1 FM, say that people are questioning the intelligence and capabilities of people leading these financial giants. The gentleman went on to say that all these giants are borrowing from and lending to each other trillions of dollars and that no one really knows who owes whom what in Indianapolis, Shanghai, Hong Kong, etc. The lead commentator clarified by saying that these are the financial centers. I smiled (nervously) at the inclusion of my hometown in that list and the amusement that we'd be listed with such major global cities. Nervously.

In the 2001-2003 recession my business took a terrible tumble from which we had trouble recovering. Up until then, we had operated on cash only. We had no debt. At the end of the recession, we were swimming in it. Our Fortune 500 clients had suddenly and simultaneously pulled back the reins. Hard. One of our smaller clients who depended on those same big companies went into bankruptcy, making a significant amount of invoices to us just disappear into thin air. I'd say that my business management skills and nerves were pushed to their limits, especially in the aftermath (2004), which precipitated my exit from ownership.

By the way, the recovery in 2004-2005 and the set up to my business sale was beautifully supported by my Vistage chair, Mike Donahue, my fellow group members and the guidance of a fantastic business coach, C.J. McClanahan. I'd like to believe that if I were still at the helm of the business, I'd be better equipped to lead through the coming storm. Hey, there's a little ray of sunshine.

Yeah, I'm a little all over the place here. But, honestly, that's how I feel. While I sort-of kind-of understand at a very low level all this financial and economic mess, I don't feel quite educated enough to truly understand. All I know is that I have to strike a balance between staying informed and staying sane. I have to manage my anxiety. My fear. After all, I have a great husband, wonderful children and am surrounded by amazing people. What more can I truly ask for?

Here's what I wonder: How is the economic situation driven by our individual and collective thoughts and behaviors? How many of you are feeling a similar anxiety? How do you deal with it? What is the best thing that each individual can do to improve the overall situation? Do some personality types fair better than others in tough economic times? What are the character traits that predispose one to do well or poorly through financial pressures?