Doing their Chicken Little impression, the media say the sky is falling. Some of our clients are worried, but personally I wonder. Here's why. First, Heather and I have been through it before (no, not the great depression! that was our parents and grandparents)... 1. The 1984 New Zealand currency crisis (that might mean nothing to you, but our country almost went broke). 2. The 1987 share market crash. 3. The 1997 Asian financial crisis. 4. The 2001 Tech meltdown. Sure, they probably weren't as bad, but we survived them all. In fact in each of those years except 1984 our sales increased. And we all survived SARS and Y2K too, remember? Plus the odd political tragedy... Second, things may not be as bad as you might think. We know that some people are finding it tough, and we feel their pain, but our clients generally seem to be doing very well and our sales are strong. We still see the same gorgeous albums flowing through. Third, it pays to look at how bad it really is. I just read the IMF's November World Economic Outlook update (I also checked out the OECD's stats). The IMF expects a 0.7% decline in the US economy in 2009 and a 1.3% decline in the UK. They're more pessimistic than they were in October, and it could get worse, but how bad would even a 3% decline be? Serious, absolutely - there will be plenty of personal tragedies - but not the end of the world. In Canada the IMF expects slight growth. Our own Reserve Bank expects the same, and so do the Aussies. The emerging and developing countries will have to make do with 5% growth.  The statistics that look the gloomiest are the confidence statistics. I believe how we respond determines what happens to us. And look on the bright side. We're not in the construction industry, or real estate, or the financial sector. Two more things to take heart from: 1. The real economy isn't collapsing so much as the financial markets. The Apple share price may be 50% off its twelve month high, but that doesn't mean people don't like iPods any more. 2. In the real economy, money hasn't disappeared, it's just got cautious. It's going to be harder to charm out of people's pockets. As it happens I've just read a speech in which a Kiwi politician talks about the Great Depression of the 1930s. Unemployment was over 20 percent, we had minimal welfare in New Zealand and there were food riots in our streets. (Do we think it's going to get that bad?) He said, "I've seen photographs of the members' stand at the [race track] in 1932 - the same year as the riots.  It's full of well-dressed people, and the car park is filled with large American cars and uniformed chauffeurs standing beside them." I am not being flippant about a serious situation. Over the next few days we'll be posting more about strategies to survive and thrive in the recession. Cheers, Ian PS Think of this as a time of opportunity. That shy money will find it's way into new wallets. Some of your competitors will go to the wall. If you keep your nerve and respond constructively, it could be lonelier at the top in a year or two.