A new form of optimism?
Google CEO Eric Schmidt thinks so. And he, like many other economy-savants, believes the worst of the recession is behind us.
Today, Tom Kraznit of CNET said, “Google CEO Eric Schmidt feels like a man with a glimpse of open highway after being stuck in traffic for hours.”
Shortly after earnings were released, Schmidt told analysts, “We’re open for business in making strategic acquisitions, both large and small.” Google is “capable of buying a large company “maybe every year or so.” Ah, spending is good.
In September, when Ben Bernanke proclaimed, “The recession is over,” people listened, but most disagreed, pointing towards a national unemployment rate of 9.8%, high credit-card defaults and a rotten real estate market.
But the Dow hit 10,000 yesterday, up 53% since its March low point, which means investors are feeling optimistic.
Google’s shares are up 80% since last March.
Green shoots? Maybe. Or perhaps, Google’s good fortune comes from being one of the largest super companies in the world and therefore “recession proof.” See Google’s earnings here. Competitors Yahoo and Microsoft’s earnings will be released next week.
Chris Paradysz, Founder and CEO of PM Digital, an online marketing agency, is one of many who is not so optimistic.
Today he said, “It’s great that Google’s business confidence is back up which is an indication that advertisers may be spending slightly more because of improved profits from a year ago. But even with the Dow once again trading over 10,000, these indicators are unlikely to affect consumer’s buying mood in the short term.”
Paradysz continued, “Regardless of Google’s numbers, the simple truth is that with nearly 10% unemployment in the U.S., a significant disconnect remains between Wall Street and Main Street. I don’t believe anything can be read into Google’s numbers that would change this perception of consumer mood and attitude about buying, as consumers are still reluctant to buy unless it fits within their definition of need. Increased ad spending is simply more focused dollars trying to pry open the same wallets of consumers who have the same sentiment they had a year ago.”
But if Google’s numbers don’t change the mood, I do believe it’s one of many events that will. But companies can’t do it on their own.
The media’s power rests in its unique ability to sway a nation. Today we saw the media spread mass hysteria over balloon boy. It topped Twitter’s trending topics and was on every major news and radio station. I witnessed my office mate clutch her chest in tears and thank God it wasn’t her own child up in that balloon. Turns out it was all a hoax. The “balloon boy,” named Falcon, told Larry King tonight that he was hiding in the attic the whole time and that he didn’t come out because, …what was that? Your parents said something about “doing it for the show?” The family has appeared on Wife Swap…twice.
The media plays a vital role in stabilizing nationwide attitudes. So if we start spreading the news that the recession is on its way out; if we smile a little wider just to give consumer confidence back a bit of gusto, we may be able to help create a market re-bound. A trickle down effect, if you will.
The power of positive thinking should not be undervalued. Neuroscientists around the world have told me never to underestimate the power of a thought, the power of a single neural connection, because sometimes its hard to tell whether reality creates our thoughts— or our thoughts create reality.
Neuroscience aside, Wall Street is dancing. And while there may be no music playing yet, I suggest Main Street put on their dancing shoes too. Throw a 10,000 party this weekend. If for nothing else but to keep a little hope alive. After all, the balloon boy was found!