When I was in college, there was a movie called a Weekend at Bernie’s. It’s about two young insurance execs who go to their boss’s beach house for the weekend, only to find that he’s dead.
There is a great party going on at Bernie’s that night that nobody wants to stop. So, they put a hat and a pair of sunglasses on Bernie, and then make lots of excuses for why he is so mellow. “Oh, he’s just meditating right now,” they say. Or, “He’s just a little stoned.” No one one seems to notice or care that the guy is dead, even as rigor mortis is setting in. So, Bernie keeps getting propped up in different poses, and the party goes on…
I keep hearing some interesting excuses about the economy, which this time is getting propped up by a man who’s name is very similar to Bernie. “It’s a weak patch”, or a “slow growth recovery”. Some of the excuses his friends are using are a bit more exotic, like “reverse decoupling.”
Meanwhile, the official statistics from the coroner, such as GDP growth and jobless claims, keep getting revised downward after an upbeat initial report is released. Nothing to see here…move along.
One question is – “how do you invest when the economy has no pulse?” Presently, the market is rebounding out of a technically oversold position. Some money can be made on this, but there are some limits to how high a “dead cat” can bounce. (I didn’t make this term up, seriously.)
Longer term, we need to think about how to restructure in an economy with limited growth potential. It’s not about “fixing” the economy with spending cuts and debt extensions. It’s more about everyone learning how to do more with less. It’s about simplying life. It’s about rethinking net worth not in terms of dollars, but friendships and family.
We are going to see lots of changes once we start to realize that Bernie is not going to be waking up from his nap anytime soon. And change is not all bad, particularly if we learn how to do things better than before…