John Mauldin “We just built too much stuff, launched too many stores & created too much capacity.
From John Mauldin’s Weekly E-Letter (it’s excellent and free, you should subscribe): “What I told them is that for those businesses which are dependent on the US consumer, their world is going to be smaller for a long time.
We are in a period where the economy is going through what economists call rationalization. We are going to have to reduce the number of retail stores, coffee shops, automobile plants, fast food restaurants, car dealerships, etc., until we get to a level that makes rational sense for the size of the economy. We just built too much stuff, launched too many stores, and created too much capacity for almost everything.
The idea for the business person today is to still be standing when we get through this, as we will. That is what free market economies do. The day will come when we get back to 3-4% GDP growth. But it will be a rational growth based in real fundamentals, one that will last a long time. So hope is not a business strategy. You need to be planning for a lengthy recession and a slow recovery.