A Year of Financial Darwinism

The best I could sum up yesterday in looking back is that 2008 is dead. Thank God.

And apparently we shouldn't hope for better any time soon. This is what it will look like when the worst economic year in decades is followed by ... yet another really really bad year. Struggling companies succumb, eaten up by more healthy ones, in what one prognosticator termed, "Financial Darwinism" (see Worldwide, a Bad Year Only Got Worse).

Philippe Gijsels, senior equity strategist at Fortis Global Markets in Brussels, predicted that 2009 would be “the year of the big shakeout, a year of financial Darwinism, where the weak get weaker and the strong get stronger.”

This is the season for looking back and looking forward. If you didn't like what you see looking back, you're sure not going to like the view ahead, according to this article.

Nouriel Roubini, an economist who call the 2008 market disaster correctly, argued in a recent commentary that in 2009, global recession “will morph into a stag-deflation, a deadly combination of economic stagnation/recession and deflation.”

Whatever combination of ugly economic terms you string together for what lies ahead, going through this transition is all the more difficult when you consider both the open-ended nature of it (we don't know when it will end) and the challenge to our current economic system itself (we don't know what the future will look like when this period ends). Sometimes the light at the end of the tunnel is the train coming at you.

We would all do well to spend this slow down in deep introspection. What do we want the future to look like? We can invent it if we try.