Friday, February 20, 2009

Economic "crisis"

I've hesitated posting anything about the recent economic mess we're in.
I have friends and family that are being directly effected by this mess. I continue to send thoughts and prayers to them and their families to make it through this mess and come out on the other side of it all.

I want to throw these few ideas out there though.
I have never really been into anything even remotely associated with "finance".
I never used to follow politics either. It wasn't until maybe 5-10 years that it started to capture my interest. I would still consider myself a 'beginner" when it comes to understanding these heavy duty issues. But I'm learning. I'm becoming more aware. That said...

A few days ago (possibly a week), I happened to catch a small clip on the Kieth Olberman show. I rarely watch his show. He's basically the "lefty Bill O'Rielly". But this clip caught my attention for some reason. It was a Representative named Paul Kanjorski and he was being interviewed on C-span. The exact date is a bit in dispute. I'll paraphrase here, since I can't find the original clip anymore... He said that on This particular day (right around the time that Lehman Bros Bank failed) That the Fed Reserve "noticed" there was an electronic "run on the banks". People (for some reason) decided on this particualar morning that today was the day to withdraw their money from a rather safe Money market (I think that's the right term). In a period of about 1-2 hours... They saw 550 BILLION Dollars withdrawn from the market. Let me repeat that... in 1-2 hours, 550 BILLION DOLLARS were no longer in play. Rep. Kanjorski said something to the effect that IF the run had continued that by 2pm they would have seen a loss of 5.5 TRILLION! In a nutshell... a complete economic collapse in the USA.
What shoocked me most about hearing this info, was that I wasn't aware of it. I follow the news pretty closely, and not once did I hear any news of this sort.
Earlier in the week I watched a special on PBS on the show called Frontline called "Inside the meltdown", that explained how we started down this rabbit hole of the econimic mess we're in. I had a hard time keeping up with it all. But the two names that they seemed to pin it on, was Bernanke, and Paulson.
As I type this, now, The Market today saw one of its worst days in a while, and the DOW around 2pm hit the lowest it's been in 11 years. Not only that... But there are rumors today that the Government 'might' step in and take over two of America's largest banks... Citigroup, and Bank of America. Due to these rumors, their stocks have both tumbled. Citgroup was under $2 a share (some on twitter where saying that's less than their ATM fee!). BofA was around $3.
I will not be the least bit surprised if over the weekend, that something major doesn't happen.
While I TRY my hardest to remain optimistic, it's difficult. I think we're in a real mess here.
I think this is a GLOBAL crisis also, not just one or two American banks.
I think I'm going to start looking for books about the great depression, to see how people survived it. I think our past may help us get through this mess. You know the ol' saying - Those who don't know the past are doomed to repeat it.
I'm keeping an eye on my bank's stock, and while I feel somewhat safe that my accounts are FDIC insured, It's still scary.
So as not to sound ALL gloom and doom...
The Dow did Rally a little towards the end of the day.
The Gov has issued statements that it will NOT take over citigroup or BofA.
So perhaps TODAY is the turning point. Perhaps things will start to level off next week.
I even saw a news article that said perhaps now is the time to buy a house.

One last point... I also hesitated posting this because EVERY time you turn the news on it's words of caution, and fear, and scare tactics. Even the Frontline show I saw was full of "scary music and a narrator who sounded like he was narrating an Edgar Allan Poe poem". A certain part of the blame for this mess goes directly towards the Media. I try not to listen to a lot of it. I jump in, get some basic news, then turn it off. It can certainly depress you to listen to too much at once.

Hang on folks.
These are interesting times we're in.
Don't let the fear mongering get to you, and stay strong.
Families need to support one another. Friends need to be there.
Hopefully we'll make it through and things will start to pick up again soon.

No comments: