6 Worst Financial Words of 2010
Please feel free to weigh in with your suggestion with worst or most overused words of the year. Here's my list:
Austerity: Oh sure, it was Merriam-Webster's word of the year [14th century noun defined as "the quality or state of being austere" and "enforced or extreme economy"] but really, it's so overdone. My least-favorite use of the word comes in conjunction with some pundit or politician lecturing that we are all going to have to "embrace austerity", at the same time he or she can't name a single, major cut in spending.
Double Dip: Maybe we got a little too close for comfort, but in my heart of hearts, I couldn't see a second leg down to the Great Recession. Want proof? Back in July, I went on the record saying that there would be no double dip! Hopefully next year, we'll only be using "double dip" to describe a George Costanza moment with chips.
New Normal: "There is nothing new except what has been forgotten," said Marie Antoinette. The phrase "New Normal" was coined in September 2009 by PIMCO's Bill Gross, though it got lots of play in 2010. Gross described NN "as a period of time in which economies grow very slowly...in which profits are relatively static; in which the government plays a significant role in terms of deficits and reregulation and control of the economy; in which the consumer stops shopping until he drops and begins, as they do in Japan (to be a little ghoulish), starts saving to the grave."
After checking out our scorecard on the "New Normal," maybe we can agree to stop using this phrase for a while:
- Slow economic growth: Yes--growth averaged about 2.5 percent this year, though many are predicting closer to 4 percent for next year.
- Static profits: No--corporate profits took off, with profit growth coming in at 26.4 percent (through Q3).
- Expanded government: TBD--lots of government action over the past year, but we're in for some changes over the next two years, so we'll wait to score this one.
- Consumer stops shopping: No--we may have slowed down for a while, but with retail sales this holiday season outperforming almost all estimates, it's clear that consumers are still alive and well.
Robo-Signing: This term referred to the likely illegal practice at banks where they would have one person reviewing thousands of foreclosure files each week, and swearing via affidavit, that the files were correct and foreclosures could proceed. This soon morphed into the larger foreclosuregate scandal, which is likely to persist at least for a couple of more quarters, or until the 50 AGs create a global settlement with the banks in question.
QE2: When Federal Reserve Chairman Ben Bernanke first announced his $600 billion bond-buying program (aka "Quantitative Easing 2", or "QE2"), it seemed like this phrase would stick around well into 2011. But with the passage of the tax-cut deal, this program is more likely to peter at the end of the second quarter of 2011. Cunard retired the real QE2 back in 2008-hopefully 2011 will be the last of the financial version of the cruise ship.
