In January of 2006, our CEO, Brian Beaulieu, wrote his Executive Summary for what was then called the EcoTrends (today the Trends Report™). It wasn’t an easy article to write. He wasn’t sharing the same rosy picture with our clients that they were hearing from other forecasting firms. He titled his article “Preparing & Daring.”
ITR Economics had been warning clients for years of the coming Great Recession, expected near the end of the decade. Now we were in print, warning our clients yet again.
Our advice to clients in January 2006 (two-plus years before the Great Recession)
“Road Signs to the anticipated decline will include a sharper rising trend in long-term interest rates, definite problems in the housing market (in housing starts, existing home sales, and sustained regional price declines), and international trade issues being increasingly politicized. The unenviable management task at this juncture is to figure out how to spend money to make money on the upside of the business cycle into 2008, and also be planning how you can recession-proof revenues and/or profits, and be in a position to prosper through the adverse macroeconomic period ahead. Be daring in your preparing for the downturn. It is going to take more than business-as-usual to keep you on the right side of this curve.”
The question on the table is: What would you have done differently if you had heard one of our speakers talk about this coming recession at a conference? Or if you had been a subscriber to the Trends Report and sat down with your coffee and read that article?
Our firm was founded in 1948 by a gentleman named Chapin Hoskins. He had lived through the Great Depression, and he believed someone should have seen it coming. With this in mind, he began collecting historical data in an effort to find a pattern that could be used to do just that – identify the upcoming turns in the economy. He was successful, and today we call that framework the ITR Long-Term Business Cycle Theory.
It was our underlying mission to help businesses remain profitable during any Phase of the Business Cycle that motivated us at ITR Economics to continue to warn anyone who would listen of the coming Great Recession.
Our advice to clients in January 2007
"Late Phase B and Early Phase C Management Objectives™ should be considered the most applicable unless you are tied to housing. Use 2007 to develop a plan for lower activity during 2008 and 2009 in traditional, mature markets. Begin missionary efforts into new markets; this is where a lot of your time, money and energy should be focused in preparation to mitigate the effects of the projected downturn. Be careful about expansion plans and overbuilding in core businesses; keep costs as flexible as possible. 2007 and 2008 is also a prime time to sell the business because the period will constitute the top of the business cycle. Take advantage of emotional efforts in others at denying the potentiality of a 2008-2009 recession.”
The cycles continue…
We find ourselves in a similar situation now, 10 years later. Both Brian and Alan Beaulieu are actively warning businesses of the coming Great Depression. They’ve written an entire book on the subject specifically to help people understand why they are so confident this will occur.
If people understand, they will listen. If they listen, then perhaps the world of business can be more successful this time around.
Director of Sales and Marketing