I know you have been missing the daily updates; however, I have been a little distraught over the past few days. My head is spinning. I am questioning the limits of government. I am feeling sorry for the innocent employees getting ready to become an unemployment statistic. I am pondering the destructiveness of greed. Clearly, my mind is over worked.
For all of you that have been living in a cave, the financial news of late has not been pretty. The week started off with a bang. Lehman Brothers filed for Chapter 11 Bankruptcy protection. What? The same Lehman Brothers that survived the Great Depression? That would be the one. Scary, right? Well, it gets worse. Merrill Lynch was saved from imminent death when Bank of America bought them out. First, they bought Countrywide, now this! Are they searching for world domination on the horizon?
Just when we thought things couldn't get any worse, AIG (the world's largest insurer) hinted of major problems. A collapse of this magnitude would be horrific on a global scale. So, our government did what it does best these days....it bailed out AIG to the tune of $85 Billion! Just think, if those cocky CEO's at AIG didn't spend over $1 Billion a year ago to have their logo on Manchester United's "Football" Jerseys, the US tax payers would have been spared at least that much. Like my dad always says, "You get cocky, you get beat!"
What effects have the past few days had on the markets at large? I'm glad you asked. First and for most, it has become clear the government is controlling our economy. I can't be sure how I feel about this. I know they are trying to protect the people at large by their actions, but at the same time they are going against the capitalistic principles the country is formed upon. Quite a quandary. Repeat of the Great Depression vs. a centrally controlled economy. I truly do not envy their position.
All in all, the events that have unfolded have negatively affected the stock market, but the fact that it hasn't gone into full meltdown is a testament to the actions of Bernanke & Paulson. Many thought the fallout would be much, much worse. Some would say it proves they know what they are doing. I say, let's wait and see how this really affects our economy, our business practices, our government intervention, and our economic liberties as Americans. I hate to be a Negative Nancy, but I just don't like big government. On the surface it seems to help, but in the end the people like me are the ones that suffer. After all, the former CEO's get big "parting packages" as they exit the companies they ran into the ground. No wonder Morgan Stanley& Goldman Sachs are looking for investors to merge with. Here is the formula: Rise to the top of large company based upon your skill and investment prowess. Next, get caught up in the greed of Wall Street. Then, start rewarding your employees for short-term gains while gambling with the future strength of your company. Finally, get fired for ruining the company while laughing all the way to the bank with your $45 million payout. Honestly, can you blame these guys. When you are rewired for bad behavior you will continue with said behavior. It's Psych 101!
The trickle down effect of the chaos is hitting the global markets. Global Confidence dropped 2.8% this month, while we Americans saw our confidence drop 7.6%. It is so good to be number one! Also, housing construction fell 6.2% to its lowest level in 17 years, and the Security & Exchange Commission released a set of zero tolerance rules against abusive short selling of stock in publicly trades companies. Hopefully, traders will heed the warning and not end up knitting shawls in white collar prison! Even OPEC is sad. Their greed made them reduce their daily output of black gold to increase the price, but it is well under $100/barrel. I guess they haven't figured out that no money = less demand!
Finally, onto Hollywood where America's favorite messed up family is once again in the headlines. No, not for trips to the psych ward, beating up paparazzi, or being pregnant at 16! This time, Mama Spears is pimping out her family's drama to sell her new book about parenting & fame. As if enough of your dirty laundry is not already out there, you have to go and do this? I just want to thank my family at this point for being "normal." It means the world to me!
The Icing on the Cake...
6 years ago
1 comment:
It's All Tuna anyway. We buy and sell everything to make a profit. Did you know that you can make money selling the right to pollute the atmosphere? Drug companies cultivate humans as the perpetual customers of their 'treatments' - never a cure. Our military fights a never-ending battle that channels billions to no-bid defense contractors.
If we lowly taxpayers weren't so gracious and generous, financial institutions would not be so cavalier with investors funds.
We can't can't get a few millions to bolster our public transportation infrastructure that would make paying so dearly for fuel more palatable, but we can promise billions (and maybe a trillion when the damage is all totaled)to keep the Wall Street MBAs from jumping out the 37th floor window.
Don't get me wrong, I know we need to do the bailouts because we want the foreign investors to keep buying our national debt and my 401(k) fund manager bought heavily into these failing companies. I want to be able to retire before I am 84.
Just don't spend my principle - make it an investment that can be bought ans sold when the price goes back up.
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