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02 May 10 Recession May Have Ended, But Not the Recessionary Mindset

Experts come on TV, talk on radio, write in the newspaper, and even blog about it, but not everyone is willing to buy the story (or fact) they are selling using all the media they can. For many American the worst is not over yet. They feel the economic recession is not over yet, as revealed by an opinion poll conducted by Harris Poll.

As much as 58% Americans do not believe that the economy is going to improve in coming year — 33% thinks it will stay all the same, but 25% fears the worse has yet to come. 10% of the respondents said they are not sure of the state of the economic affair in the United States. And only 32% showed confidence in the recovery. (See picture)

harris-economic-expectations-apr-2010

If we alter the timeline a bit then the figure is even more disheartening. Almost 80% (combined) of Americans believe the economy will not improve in the next six months — 50% believe the economy will not change in the next 6 months, whereas, 29% fear the worse may happen.

It is on the administration and regulator to falsify the belief of more than 50% of Americans. They need to work hard to prove the skeptic wrong.

harris-economic-expectations-6-months-apr-2010

In which group I fall?

Well, I am an optimist.

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02 May 10 Credit Card Reform Wrong footed the US Consumers

Credit card reform was one of the many steps taken by Pres. Obama to pull the US economy from the ugly jaw of recession that engulfed many innocent families taking away countless many jobs. People were cheerful about it, but now as the promise had been acted upon and the law has been put in place, people are not cheerful. People are confused, angry, and ambivalent about it, as found by the Nielsen Company in a study.

Nielsen BuzzMetrics has done a thorough study to gauge the mood of the consumers, and for that the company sieve through 45,000 Usenet forums, 8,000 discussion forums, and 135 million blogs. According to the Nielsen Company, the main focus was on finding the following:

  • How are consumers reacting?
  • How are card companies communicating changes?
  • What actions do consumers plan to take?
  • Who is to blame?
  • Which companies are being implicated?

The study revealed that buzz related to Credit Card Act tipped off big time in May 2009, and it continued making round until it petered out n February 2010, when the law was put into effect. (See image for trend).

cc-reform-buzz2

People who went gaga on the announcement of Credit Card Act 2009 started to oppose it when Obama signed the bill to make it a law. People have many complains ranging from having not enough protection to fear of misuse by the company, etc. Only time will tell how justified this fear is, meanwhile see the image below to get the complete data.

cc-buzz-by-topic

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03 Apr 10 Innovation or improvement?

What is the biggest nightmare that an entrepreneur has every night when he goes to sleep—fear of failure, fear of not having enough funds, fear of dying hungry, or what?

It is fear of getting the idea stolen. Yes, fear of idea theft is what keep entrepreneur awake at night. These days no one much care about the capital as much as one care about idea, because the latter is scarcer than the former. And our economy is based on nothing but breakthrough idea.

Do it better or do it different?

These are the two different aspects of a coin. “Doing it better” will fetch us incremental benefits, but “doing it different” will lead us to entirely new future.

“Doing it better” is what developing and undeveloped countries are after, and “doing it different” is the goal that entrepreneurs in a developed country chase. That is why major breakthroughs come from developed country.

You can say that “doing it better” will at best get incremental technology; for example, a more energy-efficient air conditioner, better soap, good shoe at less price, etc. But “doing it different” will get us disruptive technology—the technology that ends the previous ones while giving birth to entirely new industry. For example, instead of making better typewriters and calculators, computer was invented; instead of making faster and faster main frame computers, PC was invented.

All innovations are disruptive in nature, and it is the innovation that keeps the ball in the developed economy rolling.

Which one is better?

Both.

Both of them have different use in our lives, and both of them are important. There are times when we need a better product, and there are times when we need a new solution to the same problem.

Innovation is important, but so is improvement.

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