Posts Tagged ‘financial crisis’

Awareness and opportunity: investing in the next economy

By Scott Secrest

A U.S. economy slowly putting itself back together set the tone for the markets over the past year. While short- term economic indicators continue to be mixed, we are in agreement with the camp of economists focusing on longer term economic fundamentals. There is a growing awareness in the financial world of the implications of an emerging sustainable economy, which supports this longer-term, more holistic thinking.

Heightened awareness is critical during periods of financial uncertainty. Economic risks today exist in at least two key areas: a vanishing middle class, and failing to embrace and benefit from the new economic opportunities in sustainability.

Income inequality in the U.S. has reached astounding levels: not since the Roaring 20’s has the disparity between the top and bottom income tiers in the U.S. been so great. While there is significant ethical hazard to this, it’s really evidence that the middle-class has largely vanished in the U.S. This troublesome situation has been developing for some time as production, and now many service industry jobs, have been relocated to foreign countries.

Perhaps our greatest long-term risk is that of failing to embrace the inevitable shift to an economy geared for low-carbon emissions, clean production-based industries, a viable middle class, and sustainability principles. I say ‘inevitable’ here because this shift will occur one way or the other.

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Same as it ever was / Things will never be the same

By James Frazier

No matter how this economic crisis turns out, it is already assured a very prominent place in our memories. It’s not just the endless parade of scary headlines announcing precipitous market declines, massive government bailouts, skyrocketing unemployment, and high-profile frauds and failures. What really shakes us to our core is the thought, the mere possibility that “The end of the old way of doing things is here. Things will never be the same again.” What if this were true? What then, can we expect in our new, more uncertain future?

Let us start by taking a look at our current situation from a historical perspective. A cursory review of the last few hundred years reveals a virtual cornucopia of financial crises. Just to name a few: the Dutch Tulip mania of the 1600’s, the South Sea Bubble of the 1700’s, the Panics of 1873, 1893 and 1907, the Crash of 1929, the dot-com crash, and finally, our current situation. I highly recommend reading the stories of these panics, because the parallels with today are breathtaking. One cannot help but feel like history is simply repeating itself. Or, more interestingly, we may be seeing that the economy ¬– as one expression of human nature – operates within larger natural patterns that are built of cycles upon cycles: day and night, work and rest, breath, tides.  And likewise, the cycles of sickness and health suggest that once having lived through a health crisis, we often find ourselves looking at life anew, and forging new ways to move forward.

So let’s look at some history, ponder the present, and begin to imagine the future that may emerge from this time.

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