Littleum
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- Oct 24, 2003
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The doom and gloom is well justified.
The DOW is flirting with 10,000 yes, but the credit markets are still iced over. Yes, bank balance sheets are improving because they've been bolstered with TARP money, but in the interest of profits, banks aren't passing that down to consumers. Unemployment claims are dropping but that's because benefits are running out, not because people are finding work. Paper continues to go bad. Consumer confidance is what it is for a reason. We're trapped between a rock and a hard place- there is liquid capital out there, but there's no compulsion for it to trickle down, and corruption in the system is rampant (the BoA insider trading scandal this week?) You want scary? Scary is China mumbling things about we need a new world currency (you do know where that money to spend came from, right? China footed that bill. Our whole financial relationship to the Chinese is hide-under-your-bed frightening) There's a reason that metal & gem funds are doing well- those traditionally hold their value even when currency itself is worthless.
This entire thing has exposed the disgusting underbelly of the upper tiers of the financial markets. And in changing and influencing those you're ticking off powerful lobbys, powerful people and even political ideologies. Telling people to drop the credit cards and convert to cash is well and good, but it will take people a while to build up cash reserves wheras before they relied on credit to cash flow things. Settle in for at least a couple of years.
Yes, unemployment claims are dropping in recent weeks, but as one article pointed out, that's strongly colored by many peoples' benefits are simply running out. They still haven't found work. There's also a whole legion of people like myself (contractors) who do not get tracked via unemployment stats because we do not qualify. There's some homegrown work on that that suggests a terrifying +18% unemployment rate.
The glass is half-full... the Great Depression made many millionares. My husband lost his job in May so we started our own company, which we're pushing, pulling and dragging along 7 days a week (with 10 other similarly minded people) For people with cash and savvy, these economic times are a fertile ground. But the reality for the majority of other people is they're a dark and lean time. If you're in a position to take advantage of oppurtunity, this is a great time (there's your half-full) but if most people were in a position to do that, this wouldn't be the financial horror show it is now (there's your half-empty)
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