“A Long, Ugly, Deep Recession”??
Jerry York, well known executive, has turned prognosticator according to CFO magazine’s article about York’s advice to CFOs about the possibility of a recession. I found York’s comments lacking in rationale and supportive facts. CFO seems to have embraced York’s musings without challenging them:
“It’s going to be a very bad recession, perhaps the worst I’ve seen in the 46 years I’ve been working….We have too many sectors going south all at once….I frankly don’t see many positive signs right now, we are looking at a really nasty economic situation.”
He seems so sure of his prediction yet admits complexity in the derivatives market that makes it difficult to know what will happen:
“These instruments are so complex, and no one knows whether their counterparty is good for them or not.”
Responding to a question about a potential recession’s length and severity York said he didn’t think a downturn was “forecastable, in part because we don’t know what all these counterparties are.”
So- the economic downturn isn’t “forecastable”? Yet a man of York’s stature has no problem saying “it’s going to be a very bad recession”. Such predictions are very damaging to executive and consumer confidence. Saying later, under questioning, that what you predict isn’t forecastable doesn’t absolve you of responsibility for the effect of your pronouncements.
How do you feel about York’s comments? Are they irresponsible? Should he have been more careful to include “not forecastable” comments in the body of his speech? Do such statements have an effect on the economy? What is the role of confidence in the economy?
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Tags: economy, forecasting, Jerry York, recession, strategyRelated Stories
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1 opinion for “A Long, Ugly, Deep Recession”??
b5media - Recession? What Recession?
Mar 31, 2008 at 5:50 am
[…] Project Management 411, Bob similarly ponders whether we’re in A Long, Ugly, Deep Recession? He also questions whether this talk of recession is a self fulfilling […]
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