The business fundamentals are actually pretty healthy. So why is the sky falling?
Things were going until last week. Or maybe it was the week before. It doesn’t matter. Nothing matters now. All that value destroyed. And it was so unnecessary. Revenues were up. People had a shaky belief that the economy was doing okay. The market was reaching for 12,000. Our stock was growing plump in the sun. But none of that could last, once the chicken came back to town.
It was a hot day, the kind of East Coast heat that makes your shirt stick to your skin if you pop out just a few moments for a plate of lo mein at lunchtime. That’s when things started to turn, about noon, when I was on my break. I got back to the office, and Dolores had a message. “There’s a chicken in the lobby waiting for you,” she said.
“A chicken?” I inquired, my heart sinking.
“Yes,” she said, presenting me with a business card. “Ronald Little,” said the card, identifying its owner as an employee of Standard & Poor’s. “Show him in,” I said. My heart had shrunk like an ancient grape in the refrigerator of my soul. Chicken Little was back. And the scent of death attended him and his droppings, as it always does.
The obnoxious clucker didn’t waste any time when he was ushered into my office. “The sky is falling! The sky is falling!” he shrieked. He sat down in my guest chair and drew a cigar from the depths of his feathers. “Europe is careening toward insolvency and housing starts are down and you’ve got a bunch of bomb-throwing anarchists in charge of the House who will pursue their revolutionary agenda no matter how destructive to the status quo it might be. How can you deny that it’s falling?”
“I do deny it,” I said. “The fundamentals of our business look pretty darn good right now. Domestic auto ad spending is up year to year, and that’s true of a lot of sectors. Companies are slowly starting to hire again and reporting very healthy EPS growth. More than that, there’s a feeling that if we stay the course, we just might be able to nurse this slow, delicate recovery into a sturdy, substantial tree from which we might all enjoy the fruit.
The chicken wasn’t listening. It preened nervously. Then it looked up and fixed one beady eye on me. “I’m gonna have to downgrade the sky,” it said. I couldn’t believe my ears. In the entire history of this nation, no senior chicken, no matter how confused, paranoid, or selfish, had ever suggested such a downgrade.
“Do you know what that will do?” I said.
“Not much,” said the chicken. “It shouldn’t have too big an effect.” And then it left.
That afternoon, as we all know, the sky went from bright blue AAA with a negative watch — which was bad enough — to something less. Not much. Just enough to turn Wall Street’s mood from greed to the only alternative it knows: fear.
It doesn’t take a lot to blot the sunshine out of the sky. Today the phones are 45% more dead than they were just a few weeks ago. No hiring is planned. Stocks are way down. When I go to meetings, there are lots of long, hurt faces. It took so long to get where we were. Now we have to start all over again.
What seems so unfair is that through all this, the fundamentals of what we do remain perfectly fine. Revenue continues to hold strong. Opportunities for new business abound. There are even venture capitalists around with stupid money to spend. And yet we languish. It’s like we’re all prisoners on some kind of death row, awaiting punishment for crimes committed by others
It’s tempting to blame the chicken. But you can’t, not really. He’s just a chicken, doing his chicken thing, squawking and tweeting and running for his coop when there’s a change in the forecast. No, I don’t blame the chicken, even though I’d like to fricassee his hide.
I blame the idiots who woke him up.