Flat is the New Up

As early as July 2008 Newsweek was reporting that “flat was the new up.” NPR reported it again in December of 2008, and AMNews has again used the term as late as June 22, 2009 in describing medical offices remaining steady against other types of commercial real estate. When corporate earnings estimates are released, it is considered good news when they are not announced lower than expected. No bad news is good news. Flat is the new up.

In markets that are all, but rational, the human emotional element plays a large part in shaping the events of the economy as a whole. Before the recession hit, everyone was saying, “a recession is coming,” and as if on command, a recession came. Now we are starting to hear the opposite. Warren Buffet, the second richest human on Earth, has said “Not off the bottom yet”, but John Bogle, the legendary 80-year-old founder of mutual fund giant, The Vanguard Group, suggests otherwise believing that stocks already have hit their low point for 2009.

Business Week is doing its part by starting a weekly column it calls “The Case for Optimism.” Editor-In-Chief Stephen J. Adler is, “looking past the financial turmoil and economic unrest gripping the globe to focus on the promising future that lies on the other side of this storm. We’ll chronicle the forward thinkers investing in R&D, launching promising new products, entering new markets, or implementing management and leadership…BusinessWeek is optimistic about the economy amid the sharpest downturn since the Great Depression.”

People matter. Everything begins as an idea. One man’s change in thought can change the economy. Change the way you think and you can change your reality. If we keep telling ourselves that things are going to get better, that we have hit bottom and there is no where to go but up, then that is what will happen – and may be happening. Bloomberg reports consumer spending was up in May of this year.