SANDHILL.COM BLOG POST OF THE WEEK:

Downturn

The stock market has correctly predicted twelve of the last seven recessions.

Should we have more faith in Goldman Sachs, Gartner, IDC, Regent, MGI Research, the Financial Times, and others in forecasting financial apocalypse? No, we should not. But fail to put the two together and you'd be dumber than my cousin Earl, a man with an IQ so low he can only find employment as a congressman.

Businesses and consumers alike change their spending priorities when times are good and when they are not. The world economy is still absorbing the effects of high oil prices (driven as best as I can tell by pure speculative fervor). These inflationary pressures are just beginning to leak their way into the free economy maelstrom as the market bottoms out from a sub-prime induced credit crunch. This is occurring simultaneously with the tail of the latest IT buying binge, and the inevitable IT budget diet. The net effect is that everyone is beginning to rein-in their budgets, with the glaring exception being holiday shoppers who seem to be spending money, Larry Ellison on an acquisition spree.

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