The latest financial "crisis," in my opinion (and the opinion of my two favorite financial gurus, this guy, and this guy) is no crisis at all. It's simply the market responding to stupid loaning and borrowing practices by people who should know better. Greed, plain and simple, is the sin here.
I say, if a business makes poor financial decisions, they should pay for their mistakes. I don't care if it's a 300 year-old, multi-national investment bank or a local yogurt shop, the public should never be called on to pay for their bad financial moves. Free markets fluctuate. That's part of the "free" in the market. Bailout or no bailout, the market will respond.
Sure, the Dow fell more yesterday than any one day drop in U.S. history. But, considering inflation and percentage of the market, it was nowhere near depression era numbers. In two days in 1929, the market fell 23%. Over nearly three years (1929-1932) it lost 89% of it's value. With today's numbers, a 700 point fall is equal to only 6%. That's definitely a bad drop, but not unrecoverable. My goodness, I'm sick of the constant media coverage of it all. It's making people freak out and make short-term decisions. If you have money invested, you'll probably see it go down for a few quarters. You know what you should do? Buy more stock. Why? Because it's a buyer's market. Things will recover. I promise you, in ten years you'll be ecstatic that you were patient and waited it out. In fact, it's already recovered over 245 points as of this writing.
I was talking with my neighbor last night and he said something really revelatory to me. He said if you want to see how the economy is doing, go look at the Target parking lot. It's full.
Folks, don't freak out. These are unstable times, but like my mom said, this always happens right before an election. She has a little more perspective on these things than I do, and I trust her opinion.
UPDATE: just found this great quote. Bono said, ""It's extraordinary to me that the United States can find $700 billion to save Wall Street and the entire G8 can't find $25 billion dollars to saved 25,000 children who die every day from preventable diseases."
(rw)
Exactly! Dan and I totally agree. Well said.
Posted by: Laura Anderson | October 08, 2008 at 08:36 AM
I couldn't agree more, Randy. It's just a shame that a bill that will ultimately cost us MORE money has just passed both the Senate and the House.
Posted by: Josh | October 03, 2008 at 01:01 PM
i like that quote at the end :)
Posted by: Angel Rose | October 01, 2008 at 09:16 PM
preach it!
Posted by: Angela Hart | October 01, 2008 at 08:52 PM