Over the edge

Four weeks ago, our world was on the edge. Since then, optimists have been denying the presumed contagion from Wall Street to Main Street; pointing out that many great companies, after all, were born in a depression; and generally poking fun at the doomsayers.

It is true that we’re not hoarding potatoes in our cellars, stocking up on candles, queuing up outside food stores with black-market ration cards, and other symptoms of a wartime economy. Yes, homeless shelters and soup kitchens do have more patrons. But we, the rest of us, most of us really, haven’t entirely stopped brushing our teeth in the morning, going to work, dining out, watching a movie now and then, and generally going about our lives.

Yet, try reassuring the poor souls at Volvo’s heavy trucks division. As reported by The Economist:

Volvo wins the prize for statistic of the crunch to date. The Swedish firm said it had received a mere 115 orders for heavy trucks in Europe in the third quarter, down by 99.7% on the 41,970 order bookings during the same period of 2007.

It may be temporary, and it may be reversible: yet, if this isn’t called, at least for one industry and one company, “falling off a cliff”, I don’t know what is.

5 thoughts on “Over the edge

  1. OK, maybe I am one of the “ostrich” optimists out there.

    The question is whether the 99.7% decline in orders is a structural, long-term trend, or “just” a result of people waiting for the storm (amplified by media reporting) to clear before making big ticket purchases…

  2. History of past financial crisis shows that the Main Street will suffer a severe impact after 12 months after the beginning of the crisis, due to credit crunch and succeeding companies defaults.
    We are still on the edge.

  3. There’s a more reliable metric than capital goods inventories to gauge the depth of an economic crisis: they say that when your friends lose their jobs, it’s a recession; when you lose your job, then it’s a depression.

    After scores of colleagues and friends losing their jobs in the past months, today I lost mine: so I’m inclined to believe we’re in a depression.

  4. Pingback: IAB Forum, l’orchestra del Titanic e un po’ di marketing territoriale

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