Wednesday, August 26, 2015

Standard phrases that linger for a decade, first "perfect storm" and now "new normal"

Some may call them clich├ęs.  They certainly become so standard that they don't require thinking.  For the 2000's it was certainly "perfect storm".  The film "A Perfect Storm" hit the theaters in 2000.  As all probably know, it was the story of a commercial fishing boat rushing back to port with their catch through two strong weather fronts and, by darn, a hurricane too.  Once the movie was off the screens the phrase lived on, and every major disaster, every corporate earnings miss, every significant financial markets event, every personal meltdown, was just reflexively called a "perfect storm".  The term continues today as a throwaway comment, but is dated and not as ubiquitous as before.

The phrase for this decade is "new normal".  Coined in 2011 by those geniuses at Pimco, the new normal was meant to describe the period after 2008/2009 financial market collapse and the sluggish recovery that took place in 2010 and 2011.  Looking forward, Pimco suggested that lowered expectations were appropriate and what we see was what we get, the norm.  Five years into the decade, the International Monetary Fund released a major economic report about China commenting that the country was "transitioning to a new normal".  The nebulous phrase is now ingrained in our minds.

Some toned down lifestyles can be referred to jokingly as "new normal" and toned down corporate earnings outlooks can get that title as well in a serious way.  Whereas "perfect storm" was generally meant to describe a negative event that was to some extent or a large extent outside of the control of those affected, "new normal" means slower, safer, not as risky, but with limited chance for any positive break out of consequence. While experiencing a "perfect storm" was terrifying, living through the "new normal" is some cross between stultifying and boring, but, thank God, reliable.  It is not exciting but it is meant to be sustainable.  To some, to me, the term "new normal" is not all that reassuring.

Halfway through the decade we can wait to see if the "new normal" sticks around for another five years. I even sometimes hope so. There is no appetite another "perfect storm" where responsibility does not seem to exist.  We are rooting without much hope for a "new awakening" type of mindset, and hoping to avoid the phrase "unmitigated disaster".  

Still, let's don't forget about "old normal" or just normal.

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