MIT Enterprise Forum 2009 Economic Outlook

Summary

MITEF’s Chicago chapter fielded a solid panel of economic experts to share their guidance for what 2009 would hold for entrepreneurs and corporate innovators. Moderated by John Connolly, Associate Director of Program Development at the CME Group, the panel included Bryce Bulman, SVP at Allianz Global Investors Distributors, Adolfo Laurenti, Senior Economist at Mesirow and William Testa, VP and Director Regional Economic Research at the Chicago Federal Reserve Bank. Read on for my live microblogging of the event on the iPhone.

No surprises here, as expected. What do you want them to say? World economies are in the mode of trying to prepare people for… what? No one knows for sure. It’s very demotivating if a leader says to his/her followers, “I don’t know what’s going to happen, but it’s bad.” In the post-event conversations, quite a bit of support for a more free-market approach than the one we are following (which you’d expect, given this crowd of entrepreneurs and corporate innovators).

I believe that the stimulus and bailout packages will have a minimal affect on actually helping the economy; their function is more to help people believe “that we are doing something.” They will probably function to lengthen the pain, but voters haven’t the stomach for hardship. Hence stimuli that don’t and won’t. Financial packages that have no impact on lenders’ willingness to lend. But panelists, even if they harbor similar thoughts, cannot say that; it would be politically very unpopular to say the least.

Live Twitter Stream

iPhone autocorrect and too-fast typing produced some unintelligible words, which I’ve corrected here. Otherwise as typed. Read from the bottom up. Any text [in brackets] was shameless editorializing on my part. Click on photos to see larger.

Here’s the blow-by-blow.. again, read from the bottom up.

• Who’s to say there shouldn’t be pain? Save for it! Plan on it and hope it doesn’t happen. That seems beyond us now. Tant pis.
• Havg heard quite a few econs since dec, I can say that’s progress! What’s amazg is how entitled and lack of courage we’ve become as a mass
• .. couldn’t say in public what was really on their minds. Positiv thing was political acceptability saying empmt won’t return til 2010.
• Homebound post mitef econ fcast, based on discsns post event most of the audience far gutsier than panel. I kept remindg ppl that the panel..

After the event==>

• Help for small mfg cos? Adoflo down on road bridges, not so helpful for stimuls
• Lack earmarks in stim pckg, Adolfo, stimulus will wipe invstmt
• China, what about othr BRIC (Brazil, Russia, India, China)? Adolfo need solid fundamentals, Russia problem,
• Bill; bush tax cut 5 billion but didn’t hit in same yr, 70s best compare, adoption, Bill 12% deficit, japan relevant, Adolfo E.U. bad off
• Adolfo, future will chg, mor regulation fr OTC to more moderated, John banks don’t like it, new Q compare size stim pckg & S &L pckg
• Futr CDS markt? John Conolly, mod, answers, long answe not specif, won’t continue at same size,
• Config auto? Toyota big demogs, not so much U.S., big3 fought in U.S. franchise laws (U.S. franchise laws hamper Big 3)
• Mfg they can’t, Adolfo need hi value mfg, bank auto will b protected by U.S. better than E.U.
• Level playg field, evthing a svc my Q end Industrial Econ
• Bill, rebalancing a lot innovation In Cred mkts, need to save mor, transition tough, asia can save mor,
• Overseas emerging future growth adoption no perm shift, cred was easy, now need cash, mor healthy to hv less credit, need mor Savgs needed
• Age austerity? Globl? Assume conspicuous consumptn? Bryce debt in all parts econ, fortunate cycle? Now vicious cycle. Emerging mkts startg now
• Real stim, smart (power) grid broadband transportation, Bryce,
• Adolfo large pckg, extend unemp bens insurance, not stim not grow econ, multiplier low, tax rebates less than stimulus
• Stim pckg Q, brain dead ideas of stimulus, how to stimulate? Grand compromise cred will lag- bill
• Bill be good for enterprises, Adolfo, best ppl workforce, Midwest, Bryce, credit cost capital higher
• Credit Bill by opt, mor pain, will take longer, enterprise audience, where oppy? Econs pretty macro, green can be interestg
• Bryce 2011 emplymt bad, psych impact? 3 mill jobs lost last 6 mos, u shaped recovery
• Adjust policies, protectnism threat, U.S. strong univs, adoption, options despite botchg (financial) rescue pckg
• Now Q&A, opt or pess? Bill I.P. protectn will rebuild
• Prices reasonable 85$ barrel ,stim pckg good for renewables,
• Prices, microecon model flirt w deflatn, no, much liquidity in syst, good commods n energy
• Middle class of emerging econs won’t help, depends on definition of mid class, they buy very few valuadd prods
• E.U. prob to bounce back, dev matire
• China mor comple. Japan n E.U. mor probs, common currency but no policy to go with it
• Adolfo, depressn? Bad recessn, U.S. the tallest of pygmies! No great depressn U.S. or abroad, us main eng world econ when bounce back?
• Leadg indicators often wrong, labor Mkt? Job destruction, temp workrs,
• Midwest has 3x (times) the jobs of big three, mich will b really hurt, may see regional policy
• Strong SnapBack strong 90s, global n lean, won’t b as strong this time, mfg good but auto diff, parts industry a prob, supplier ecosyst prob
• Fin mkts will tell whether stimulus pckg workg, now bill, midwest bounce back 80s painful
• Tarp 1? 2..3..4.. [I feel great about being a taxpayer]
• [Must rethink, stimulus pckg, we hv tarp how about barf?]
• Savg money bad for economy, we need. Relight growth, Govt spend n invest last resort, theme here last resort
• Consumers must delevg, must b rtsized, excess was good for economy, Govt must step into gap spendg, [wow socialist!] Now bryce bulman, asset Mgmt co, real GDP NEG 2.x
• Not ibanks like ny, not opt that we will skirt it, it will hurt, and we won’t bcom socialist
• Exports sharply dwn, 30% mor concentrated than us then, plus prof svcs concentration hurts
• Dotcom hurt was mitigated by mfg then but this time diiff mfg has thus far insulated us, now its wheels fell off
• Midwest? Not too many imbals like housg, smallr housg sector, auto a prob, dependnc on mfg, capital goods hurt us
• Many instances of crises big chall credit of instits, Midwest strict probs, bunch host info not too relev now
• At Fed since 82, my 4th recessn, ea event diff, cycle theory, more diff
• (reactionary regulatory) contraints, we need to be patient, now Bill Testa from Chicago Fed
• China bounce back buys treasuries needs to drv local demand, real concern EU, no money for tarp, they’ll lag, real risk micro side, too many
• http://twitpic.com/1jn77 – Packed rm in Chicago mitef
• U.S. mobilizg resources must fix imbals must let banks delevg, bus must self-finance, 2010 may b end
• http://twitpic.com/1jn6m – The esteemd panel: cme group, mesirew, allianz
• Ireland Spain only EU succ stories, globl recessn, this dr Adolfo Laurenti from Mesirow
• china exports blamed for crisis no ch devalue currency

Startg to microblog mitef Econ fcast now.. overview==>

• The economy will speed social network adoption due to cost; ppl’ll b flabbergasted at how fast things’ll change; econ a huge & broad motivatr
• Tomrw eve, excited to give a LinkedIn talk on using LI for cross-border bus. Will do my 1st @eglii int’l gig in April; it’s a natural!
• About to head over to MIT Ent. Forum to hear sm economists give the 09 preview.. I’m always more int’d in the reasons than the answers

Before the event==>