Put the smelly fish on the table!

People, companies and countries, who have had several years of success often find it very difficult to confront bad news. They do not want the party to end, and therefore they deny or rationalize every piece of information and insight that threatens their self-image.

In December 2006 during a business trip to the United States I sat in my hotel one evening and watched Fox News. In front of me a program rolled off the screen in which different experts were taking stock of the financial year. One of them, an American investment broker and financial commentator Peter Schiff, appeared with a strongly controversial statement:

»The United States is like the Titanic and I am here with the lifeboat trying to get people to leave the ship. I see a real financial crisis coming for the United States. The party is over for the United States. Real estate prices are going to come crashing back down to Earth within two years, and it will have disastrous consequences.«

His statement went off like a bomb in the debate, because on the surface the U.S. economy appeared to be in better shape than ever before, and there was no shortage of financial commentators, consultants and analysts who celebrated the U.S. economy for being rock solid. Schiff’s analysis, however, was that the handsome figures were artificially inflated by a housing bubble caused by the controversial subprime loans.

Not surprisingly, in most TV-debates Peter Schiff stood completely alone with his dismal predictions. YouTube is full of clips in which he is being mocked and ridiculed on open display, and where financial experts shake their heads over and roll their eyes at Schiff. At one point during a live broadcast the Fox News business host Neil Cavuto even joked that Peter Schiff ‘s next trick would probably trying to tell the truth about Santa Claus.

Schiff was a party pooper, and there was no one who wanted to hear him talk down the success created by hardworking American companies and employees. It was easier to shoot the messenger than it was to listen to him and ask yourself: Is he right?

Many people simply had an interest in maintaining the perception that what looked like good and healthy financial numbers were caused by skill and not by an inflated housing bubble.

Eighteen months after I watched Fox News at my hotel in the United States Lehman Brothers cracked on the 15th September 2008 and sent shockwaves through the global financial community. Peter Schiff ’s predictions had come true, and he came to stand as a symbol of America’s unwillingness to deal with the truth before it was too late.

Make sure you put the smelly fish on the table before it is too late!

Posted on 31st Oct 2013 by Rasmus Ankersen

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