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Posted by Larry Doyle on March 21, 2009 10:07 AM |

Our economy, markets, and global finance are impacted by a wide array of factors. While various analysts will focus on the differing magnitudes of a variety of these factors, I know of nobody who would not say that ultimately the greatest factor of all is “confidence”. While there is a monthly Consumer Confidence Survey generated by the University of Michigan, confidence is not measured by hard data.

Regrettably, we are currently suffering a crisis of confidence. The crowd in Washington has not helped instill confidence with its scattered approach to legislation and policy.

Over and above the problems in Washington, our global economy is suffering from increasing protectionist measures. Our current administration may talk about free trade and open markets, but their actions speak otherwise. Those actions impact global confidence. Other countries and regions are equally guilty of the same issues.

One of our Thought Leaders, Robert J. Shiller, writes about Winning the Confidence Game. Shiller writes about the global experience pre- and post-WWII. While we certainly do not need the pain, suffering and economic deprivation from global military strife, we do need the leadership across regions to work our way through this economic turmoil. Will we see this leadership at the G-20 conference in early April?

Shiller promotes the concept that global governments have not provided sufficient fiscal stimulus in the face of this economic meltdown. I am by no means a major proponent of Keynsian principles promoting the need for massive government intervention during times of economic stress. I am a major proponent, though, of strong, principled, unselfish governmental leadership.

Investors in global markets vote with capital everyday. While a few markets and currencies have held up relatively well, many markets – including the U.S. – are uninspired by much of the leadership on display.

As a result, no confidence.


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