Economic Crisis: Who Do We Blame Next?
Next thing I remember is waking up at 3:30AM with financial news about the markets in Asia and Europe. To say the least, it wasn't pretty. Given all the news we are surrounded by during our waking hours, I actually thought that I was dreaming. Nikkei was down 9.4%, its biggest one-day (percentage) fall since October of 1987. European markets were not trailing much farther - FTSE, Germany's DAX and French CAC 40 all were down anywhere from 4% to almost 6%.
No, I wasn't dreaming! It wasn't the unconscious brain cells trying to make sense of the blame-game we have been witnessing in the debates, the senate hearings and the boardrooms. No, it wasn't another bad episode of 'whodunit!' It was for real.
The fact is we are here, and I am not buying it next time someone tells me that the fundamentals of our economy are strong.
I have seen more comparisons with the days of the Great Depression and how the stock markets around the globe are trading at the lowest levels since early 2003 than I care to remember. The fact is we are here, and I am not buying it next time someone tells me that the fundamentals of our economy are strong.
As I was writing this blog, I thought about an email I had received from a friend last evening. I saw a picture of a $1 bill that I didn't pay much attention to. I thought that was my friend's way of saying that he lost the bet, and the fundamentals of the global economy are not strong, and he was actually coming through for the first time on his routine of bets. I went back to take another look at the dollar bill. It was kind of funny! And in some ways really sad. Check out the image accompanying this piece.
It's not a bad dream. It's the state-of-affairs, not only in our country, but around the world. I am confident that these signs of amazement, anger and fear will fade away and the trust in our economy will be restored. But, first thing first - we have to accept that we have a problem and we are not alone in this. It's not confined to Wall Street, or only Main Street for that matter.
I have been told that the credit markets are frozen - banks are not willing to lend to each other. Still, the consumers continue to lend to their banks. Oh, I am sorry - that's called deposit. To our banker friends: Lessons learned in the last couple of weeks - take care of those "lenders," and instill confidence before they start finding other ways to lend to someone else (sorry, find better homes for their deposits).
The FDIC has done its part by increasing the limits on insured deposits from $100,000 to $250,000. It's time to do your part.
No more betting with my friend. The phrase 'funny-money' has taken a surreal meaning for me.