15 Dec One Company’s Response to the Economy
Morgans Hotel Group has decided not to participate in the Recession. In fact, they wrote a terse letter and posted it on their blog, www.recessison.com, (that’s right Recess Is On!) to it letting it know that the “inn is full.”
I’ve spoken to a lot of CEOs, Executives, Entrepreneurs, business for self, and blue collar workers about their thoughts on the economy lately and it’s amazing the response I get when I ask this question: “What is the exact effect that the economy has had on your personally?” In many cases the answer is either “I’m worried about” or “I just read/watched/saw/heard.” When pressed for a personal example the response becomes, “well, nothing yet.” The biggest issue one CEO raised was that his borrowing power for acquisitions was down and he didn’t want to use equity financing so they had to wait until they had more access to capital from the banks to acquire their next group of businesses (they’ve purchased over 25 in the past 8 years). Granted he followed up by saying their equity partners are more than willing to fund the acquisitions but they (the management team) did an MBO (Management Buy-Out) so they don’t want to dilute their ownership positions.
I’m not saying the recession isn’t real and that the economy isn’t suffering, I’m saying let’s not start making decisions based on CNN and instead take a look at how we are personally or corporately affected and act prudently. Why create a self-fulfilling prophecy?
As side note, there will be lucky and unlucky people as a result of the economic situation we’re living with. The thing is it turns out after a 10 year study by Richard Wiseman on the subject of luck, there is no statistical difference between lucky people and unlucky people. The only difference is on how we perceive what an event means.