Tuesday, June 14, 2011

Half Empty or Half Full

I can't determine if I am overall an optimist or pessimist - so I call myself a realist.  Let's say Univ. of Michigan started checking your individual sentiment of how optimistic or pessimistic you are on a given day/week or month.  What would your graph look like - and would you overall be an optimist or pessimist?  I guess it depends on the area of interest - economics, health, spiritual, relationships etc.

Susan just read "America's Bubble Economy" and the sequel "Aftershock" - both gloom and doom books that would delight a pessimist.  I protected myself by only reading the latest one - "Aftershock".  The "recency effect" (which is you over weigh in belief what you recently read) has created a degree of pessimism in me lately.  One thing I learned from my Mom and Dad was the power of positive thinking.

So even though I have read "Aftershock" and "Chicken Little" - I can pull myself out the pessimism death spiral to equilibrium and then attempt to re-engage my realism self.

By the way - a good economist will look historically at the measures to determine the relative change and not the absolute specific measure of today.  So for the interested economists below is the MCSI chart of consumer sentiment:

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