One of the major themes for the new year will be risk aversion.  Not just your plain vanilla variety risk aversion but quaking-in-your-boots-run-for-the-hills style outright fear of risk.

Over recent years risk appetite has gone parabolic, people being willing to take on more and more risk and throwing caution to the wind.  Unfortunately, they haven't been adequately compensated for the risk they've taken on, and now they're being forced to eat the costs.  Instead of being wary of risk, investors simply assumed that they could repackage it, put lipstick on it, and pass it on to the next sucker.  This mindset was epidemic and permeated every level of our society.

Charles Ponzi, eat your heart out.

The mania of eternal growth and expansion made any talk of risk management sound old-fashioned, fuddy-duddy, and outdated--and now we're paying the price.  Billions of dollars were thrown at investments which, in retrospect, will look like absurd wastes of time.

The pendulum will, of course, now swing too far in the opposite direction before risk appetite re-appears.  People and businesses are going to hunker down and go into hiding this year.  Risk aversion is going to be evident in every facet of our lives: 

• Banks will be very risk averse, which will contract our ability to obtain credit and the ability of small businesses to obtain business loans.
• Investors will be very risk averse, which will stifle the ability of large businesses, states, and cities to obtain credit by selling bonds.
• Startups will have an incredibly hard time finding funding, and when they do find money available the cost will be guido-like.
• Expect to see a sharp uptick in try-before-you-buy and product trials, especially for expensive products.  Show me the money!
• Unproven companies will find it very difficult to get in the door at new customers, who will recently have been burned by long-time vendors going out of business.
• Risky projects with iffy ROI's will be canned left and right.  I'll call this the trail of bodies left behind after the Web 2.0 tsunami recedes back into the ocean.
• People who still have jobs will stay in them, reluctant to give up a steady paycheck to start a business or take a gig with a risky startup.
• Expensive projects will be put under the microscope and their ROI's gone over with a fine-toothed comb.  "Soft" benefits don't count now.
• I will even go so far as to say that risk aversion will become "cool".  It will be "cool" to be safe and conservative.  Conservative cars, conservative clothes, safe movies and music.  Pimp your safety.  Say good-bye to bling and flash, risk aversion is going to permeate our culture.  Nun habits are in this year (kidding ;)

This risk-averse mindset really didn't start taking hold until October of this year, and everybody is still relaxed from their forced Christmas vacation.  I wouldn't be suprised to see a brief honeymoon while Obama takes office (the "Hope Halo"), but earnings season in the March timeframe is going to throw gallons of freezing cold water on everybody and force them to wake up.

Happy New Year!