Well actually, EVERYONE, the time is now. If you have been paying attention to the U.S. stock market, you know the last couple of weeks have been brutal. Nasty. Ugly. Insert your descriptive word here. The DOW dropped another 445 points today or about 5.5%. Add that to the 427 point drop yesterday and we are sitting at 7552.29. I am approaching a 50% loss in my retirement funds. Seventeen years of savings. Is the carnage over? Who knows? But, I do know this. I couldn’t be happier. I’m continuing to invest. This is a buying opportunity baby!
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Popularity: 20% [?]
Last week was an incredibly scary trip for the US stock market. Correction. Last week was an incredibly scary trip for the global stock markets. What a roller coaster ride it’s been. If you have a diversified portfolio, you have probably lost upwards of 40%. That’s one heck of a hair cut! At least 2 trillion dollars of wealth have been lost in the US market alone. Devastating. Depressing. And the markets free-fall may not be over yet. Some experts think we could see another 1000 points shed before the markets bottom out. Then again, it could begin rebounding today. Either way, one thing is nearly certain, it’s going to be an up and down, bumpy ride for the foreseeable future. So what should you do next?
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The SOB’s in the Senate are at it again. They have porked the you know what out of the emergency bailout package. I downloaded a copy and read through it tonight. I am absolutely shocked and ashamed of what I found. It is totally business as usual. Dozens and dozens of special interest appropriations. Page after page of items that have absolutely nothing to do with our financial crisis. Don’t get me wrong, some of these things are important, but DO NOT belong in this emergency package. Unfortunately, this bill would not pass without dangling the candy in front of our addicted public servants. It will be interesting and scary to see how much this 700 billion dollar bill will actually cost tax payers.
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Here we go again. I promised myself I would not blog about the financial crisis again until there was some light at the end of the tunnel. Well, there is light, but it appears to be a freight train. I feel like the alarmist town crier, hustling newspapers with bad news. But unfortunately folks, we have had nothing but bad financial news lately.
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With the dizzying array of bad news in the financial world, it can sometimes be overwhelming. Over the past several months I have attempted to inform you of the events in an easy to understand, straight forward way. However, sometimes complex issues are better understood when explained from a personal perspective. I recently came across a blog post by Aldon Hayes of Orient Lodge. Aldon tells his very personal story in:
My Role in the Collapse of Lehman Brothers
Unfortunately, his story is not unique. It is happening all across our country. You may know someone who is or perhaps you are, in a similar situation. When reading his article, I felt like it put a human face to the numbers. I recommend checking it out, as it is a good read.
John
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In what seems to have become common place, we had another weekend of nasty financial news. First up, the announcement by Lehman Brothers that it has filed for Chapter 11 bankruptcy. The 158 year old company was unable to work out a deal to be purchased. In a separate move, Bank of America agreed to purchase Merrill Lynch, saving it from a similar fate. Add these failures to the collapse of Bear Stearn’s and you have 3 of the 5 largest US investment banks failing in 2008. Not to mention the government bail out of Freddie Mac and Fannie Mae. And as if that were not enough, AIG the worlds largest insurance company, is asking the Federal Reserve for “emergency funding”.
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By now I’m sure you have heard about the latest unprecedented government move to take over Freddie Mac and Fannie Mae. Treasury Secretary Henry Paulson announced the news on Sunday. It is estimated that 50% of the 5.4 trillion in US mortgages are held by Freddie and Fannie. Many experts agree that they are too big and important to fail. So here we go again with another tax payer bail out.
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I went to see I.O.U.S.A the other night. The documentary was accompanied by a live panel of 5 including Warren Buffet. The show was simulcast live to over 400 theaters nation wide. What an eye opening experience. I left the theater shocked and wondering how we (The United States) are going to fix the many financial problems facing this country over the next several decades. I pride myself at being informed. I thought I had a fairly good understanding of our collective financial situation. Boy was I wrong. Our National Debt is out of control! Every American ought to watch this documentary.
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Manufacturers Display Their Magical Powers
There is something underway you should know about. Even as I speak thousands of consumer products are shrinking, right before our very eyes. That’s right, manufacturers are reducing the sizes of everything from bags of dog food to boxes of cereal and cartons of ice cream. Can you say back door price increase? Inflation?
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I went camping this past weekend and noticed a significant jump in gasoline prices. I paid $3.89 per gallon, for the first time ever. It was $3.69 just last week. I see $4.00 per gallon in the very near future. And unfortunately I think we may see $5.00 per gallon this summer. Long term it could go much higher.
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