“Sky isn’t falling” blogger says

I haven’t read all the comments – but have just read Deepak’s and frankly I think he summed perfectly in the way I’ve felt about your recent tweets, comments & shares.

+1 Deepak.

Zee: Allen said he unsubscribed from me over on FriendFeed and Twitter.

Deepak: I looked over all my FriendFeed items and if you take them, along with my blogs, in whole I don’t even get close to saying “we’re all going to die.”

It seems that you are reading my tweets with some sort of bias. Same with Steven. But that’s OK. Makes the world go around. It’s still better to get all of our fears out here and talk about them. If I’m being a little irrational, well, it was an irrational week.

Let me repeat again. IT WAS THE WORST WEEK WALLSTREET HAS EVER SEEN. If I can’t get a little irrational on such a week then, sorry, you probably don’t need to be reading me. I’m human, not a PR firm.

Allen: I’m emotional. I cry when a technologist shows me an awesome demo. I cry when I see something going wrong in our society. I’ve never believed in holding back my emotions from my writing. Why? It’s a philosophy that it’s best to share the highs and the lows with my audience. It’s also a philosophy that by talking about my fears we can get to the bottom of them faster and better and figure out how to get over them.

So far people aren’t countering my fears. They aren’t telling me how to get over them. They are just asking me not to discuss them in public. Sorry, that is NOT leadership. I’m not a PR person. I guess that’s what separates you from me. I’m going to tell you the truth as I see it, even if you don’t like it and unsubscribe.

Funny, I don’t unsubscribe from people who say things that disturb me, unless they are a jerk and attack others.

To clarify i didn’t unsubscribe from you on twitter and you know I like you Robert.

It’s ok to be emotional, we all are in one way or another. It’s ok to be scared. But what I am struggling with from you Robert is what seems like panic to the level of needing a pill of some sort. I don’t get it. Is sh** bad? Yes. Everyone knows it’s bad. It’s like if you and me were standing outside in the rain and you say “it’s raining” – duh.

This might be crazy but I am going to try it…think of your readers as your kids.. do you try to scare the crap out of your kids about what’s going on now? Of course not, you may share some details and explanation of why we can’t go to x or buy y, but scaring them into thinking the end is near is crazy (i think). but yet here, you are doing it.

My suggestion is to step away from the Internet/tv for a few hours and then come back and read your posts and comments. Or try to read them as if another person wrote them. Anyway just my thoughts… and I’ve been through many ups and downs in my career including the “bubble” and several others – both from the accountant side and the tech side.

I will share once again a video – it works in this situation:

Well Robert you have been doing the right thing in raising the red flag in Silicon Valley … but this is a global collapse of epic proportions which will make 1929 look like a picnic by comparison something far worse than your Cat 5 analogy. We will get some interim rallies but this “bear market” is headed down … even below the current estimated support level of 7000.

If you want the best information possible …go to
Nouriel Roubini’s blog and read his current posts & especially his 12 steps to meltdown … which he wrote in February …by the way we are now at Step 12!

http://www.rgemonitor.com/blog/roubini

The IMF just issued a warning of financial collapse at 5:08 PM EDT. Your hurricane is moving pretty fast!

http://news.yahoo.com/s/nm/20081011/bs_nm/us_financial3_4

Actually, Robert, if you had listened to me about AAPL, you’d be up $10 (11.6%) today.

You keep mentioning that CEOs are scared. I’m a CEO and I’m not scared. I’m certainly not excited or anything, the situation certainly isn’t pleasant. But getting scared doesn’t help anyone – it only exacerbates the problem. This is an opportunity for anyone who doesn’t lose their head.

There’s a big big difference between “This sucks” (it does) and “The sky is falling” (it’s not). The markets have been cyclical for as long as there have been markets. We’ve had a big boom, so we’re due for a correction. This isn’t scary or crazy or unexpected. Rational people have been expecting this, and rational people are ready to take advantage of it.

Fear breeds panic. And if you panic, you’ll lose your shirt and contribute to the problem. Be part of the solution, not the problem.

The is not a “correction” folks …the credit markets are frozen, we have forced selling by mutual, pension, & hedge funds to meet reallocations, margin calls, or redemptions! There has been a silent run on deposits over $100k and now $250k …this is no “correction”.

The IMF warned on Saturday that the global financial system was on the brink of meltdown, while France and Germany pushed ahead with a pan-European crisis response to try to prevent the worst global downturn in decades.

At a joint news conference, French President Nicolas Sarkozy and German Chancellor Angela Merkel said they had “prepared a certain number of decisions” to present at a Sunday meeting of European leaders as they work feverishly to restore blocked credit markets to working order.

The United States appealed for patience, but the International Monetary Fund stressed that time was running short after leading industrialized nations failed to agree on concrete measures to end the crisis at a meeting on Friday.

Time is running out …
http://www.nakedcapitalism.com/2008/10/imf-warns-of-systemic-meltdown.html

Robert,

Please continue “telling the truth” as you see it. Reading many other blogs, you wouldn’t even know that there was a global credit crisis.

And I agree with you 100% that it is better to be well-prepared for the “hurricane”.

I don’t remember you telling your readers to panic and sell all their stocks. Neither are you saying that the bottom is here and that they should jump into the market.

What you are doing is proving those of us outside Silicon Valley with an insider’s view of what is taking place – something that CNN and MSNBC are not equipped to do even if they are interested in doing so.

Thank you for your valuable contributions here and on Friendfeed. Keep up the good work!

Robert,
I don’t see any leadership or advise coming from your blog, just panic. In times like this panic only makes things worse.

What I worry about is that the fundamental problem underlying the crises (mortgage backed securities and other financial instruments so obtuse that no one knows how much their assets are worth nor how much those of their creditors are worth) is not something that looks like it will be easily addressed even with the bail out.

Markets fall because companies need cash, so they are forced to sell their assets. In this environment, there are few buyers, so the markets fall. The bad news (from my perspective) is that the few buyers that have cash come from China and Middle East. They are going to buy a lot of cheap assets. What this means for the US and Europe, we can only speculate.

Have you already read this?

“The non-financial sectors of our economy will not suffer much from even a prolonged banking crisis, because the general economic importance of banks has been highly exaggerated.”

Dare: OK, you attacked. Now the onus is on you. What would YOU suggest the tech industry do?

By the way, if you are only seeing panic here you aren’t reading me very carefully. I’ve written several semi positive blogs and this week I’ve done several fun videos that are hardly “panic.”

Don: touche about AAPL. We’ll see how they do over the next few weeks. Personally I think you’re nuts if you think AAPL is a strong company going into Christmas. People who are laid off don’t buy consumer electronics. The new $800 Apple netbook sounds pretty cool, but only when you remember it is competing against netbooks that are $300-$400. Let’s recompare AAPL later, OK?

As for the rest of the market you would have lost 18% this week. So, wonderful. From here I still sense downward pressure on the markets.

You asked CEOs to talk about their expectations but they are “only” spectators for now. So they will confirm your fear, and here you go, you have your vicious circle.

Please link to economics expert like Brad DeLong or Krugman, Vox EU etc … Not all FINANCIAL crisis generate ECONOMIC crisis. 1987, do you remember ? Looking to the indexes like the Dow Jones and stock market is for CNN but it doesn’t learn anything to the real problem : the credit market etc … I dont’ say that there will be no problem but for now we have a problem with banks not tech industry.

Sorry to say that but with your current “big titles” on the “future” crise in tech sector, you look like CNN or FOX NEWS.

I should be more specific, when you say ” IT WAS THE WORST WEEK WALLSTREET HAS EVER SEEN”, you talk about stock market (based on the different comment i’ve read).

So now don’t look to the stock market but : credit default swaps (cds) and TED spread if you want real information on the crise.

I’m with Dwight on this one. The stock market crash is just a symptom of many factors which Roubini lays out in the first few minutes on this workshop video http://www.cfr.org/publication/17387/financial_crisis.html from the Council on Foreign Relations. The whole video is worth watching IMO.

don – you think aapl was something – look at wachovia! if you bought it when it dropped to a buck you would have made 600% or 6x your money in 2 weeks!!

The standard wisdom is that one should hold on to one’s (hopefully well thought through) stock portfolio in a large correction because one only has loses if one sells one’s stocks. This may or may not be appropriate now. I think not and I’ve personally sold everything.

The economists that I’ve read agree that we’re a) already in a recession and b) that it will be a deep recession lasting at best for another 3 quarters and more likely something matching the historic duration of anywhere from 2 to 10 years until the beginning of recovery. Holding on to one’s stock portfolio may be ok if one has a long long time frame to see the recession through. But it begs the question, will the companies that you’re invested in a) survive the recession and b) will they be wise investments on the other side.

I think you are right Robert to have at least some fear at this time in the economy. That is one way of learning a lesson. I would like to borrow a line from John Lennon “let it be” that is for those businesses that had bad business practices let them fail and go away. Those whom had good business sense will still be here and the economy will be better in the long run. We were folish to think ENRON was the only company that was lieing to the public about their business, we should of learned a lesson then. Maybe we will learn NOW.

Scoble-

Try watching Bloomberg instead of CNBC – it’s a lot more interesting and proffers a lot less hype…

By using a weather metaphor and saying “it hit New York 3 weeks ago” validates the accusation against you and advertises the fact you might not really grasp this.

The hurricane you’re talking about isn’t the actual crisis; the panic surrounding it is the hurricane. The real challenges and opportunities are coming from massive geological changes to the landscape.

Following CNBC around the clock is the worst way to try to understand it because the data coming out of minute-by-minute events right now can be anti-informative.

From a narrow tech perspective, ya, some of it might be useful in the near term for ‘weathering the storm.’

But these are tectonic changes that have been going on for more than a year, not just a meteorological interruption. If you leave town, that “beachfront” property might not even exist anymore: it could be a desert or a swamp, or the coast might move further inland.

It’s scary if you’re established, but I can’t think of anything more exciting for truly adventurous and entrepreneurial spirits.

My advice is to invest heavily in knowledge and tools for mapping and re-orienting the emerging landscape. Understand the big shifts, as measured in decades and centuries, rather than quarters and years. I’ve been writing about how and why to do this since last August; my first blog post was about the credit crunch, and my thinking has developed to correspond with the crisis as it has evolved.

It isn’t sexy, or assuring, but if you want to win the beachfronts and high ground of the future this is the only investment I can recommend right now. Start here if you’re willing to invest for the long-term:

http://brianfrank.ca/2008/03/the-new-pragmatist-2/

B Frank: that’s totally false to say there isn’t an actual crisis going on. Companies aren’t able to get credit. I’m hearing that from all over. My brother’s bar has seen sales drop all year long, far before I started talking about it and before most people knew there was an economic problem coming. Saying stuff like what you just said makes you look out of touch and wrong. Just saying.

It’s like Mom always told me… if you can’t say something nice, don’t say anything at all.

….

“The non-financial sectors of our economy will not suffer much from even a prolonged banking crisis, because the general economic importance of banks has been highly exaggerated.”

Haha, so our country is on the brink of default and you pretend that the problem is nicely isolated? Are you serious?