It's not you, it's US

And when I say US, I mean the United States. Most people would agree the global credit crunch was by in large created by US firms and most likely will not return to the way it was before – easy credit.  I believe there will be a structural change in the way US consumers think and it means they have to live within their means. The idea of spending USD 4 on a cup of coffee just sounds retarded to me.  And, all that talk about wealthy individuals spending in a downturn:

– Toll Brothers – 30% cancellations on new homes
– Neiman Marcus –  October sales down 27%
– Mercedes Benz – October sales down 30%

It’s easy to get caught up in the hype, I remember coming out of college and the first thing I did was get a new car, a 1995 Nissan Maxima SE (the 4 door sports car!).  It would have been justifiable had I really needed it,  but for the first 4 years out of college I racked up over 600k miles on United and about 10k miles on my ride. Stupid…

People in India have a chance to change their “American ways” and not go down the same path as most Americans. And I think we are seeing it with the banks, a year ago I was getting several calls a day for credit cards or loans…now I get zero. And, many are becoming risk averse to financial products that just 6-8 months ago seemed like the best thing since sliced bread.  It’s a great learning experience in risk management for everyone to see that things can actually goto zero…ironically the “zero” was invented in India.

Friday Humor:

Q: How do you find a good small-cap fund manager?
A: Find a good large-cap fund manager, and wait

Q: What is the capital of Iceland?
A: About USD 3.50