I Eat Bear

Today, the market came thundering down, but the sky did not fall. Too many bankers are predicting total doom, and it still will not happen. Oh, it may happen to them, and to that I say BRAVO! You mis-managed to the scale of a global crisis. Just how much sympathy am I supposed to have for that?

And the Fed allowed Wachovia to be absorbed by Citigroup. Be sure to spread the bad debt around, and JP Morgan and Bank of America have already been beneficiaries. The government, namely the Fed, is acting just like a parent, to make sure one kid does not get something another does not. Yes, the court jesters are back in session too. Congress that is.

But, just for one second, lets's see what happens if Congress does NOTHING. Let's assume credit markets do freeze. SO WHAT? More banks go out of business. That is already happening, and will continue to. Money is not available for personal loans. Nothing new there either, for many people. Growth stops. Like it has NOT? Businesses cannot get more capital.
Ok, not my favorite, but it still will not cause the sky to fall. Unemployment will rise. Like it isn't already?

And the blame goes squarely to banks (financial institutions collectively) and the court jesters.

But, what really happens after things get worse? People tighten the belts, and begin to save everything. Is that a bad thing? Businesses have to learn to operate on cash flows. Is that a bad thing?

The bad thing is there will be destruction of the consumer. Yes, that IS a bad thing. But, when things get desperate enough, a few will return to markets, mostly for necessities. I suppose luxury goods is going to suffer some. Is that a bad thing? Peope may have to work together?
Would that cause the sky to fall? I doubt it.

It is all about short term pain. If it is going to crash, get on with it, so we CAN RECOVER. Just that the post recovery will be a different place. Is that a bad thing? Not from where I sit.

So, doing NOTHING, is not the worst option on the planet, and it has the potential to be a far better plan than the court jesters have.

Doing nothing will cause a depression? News flash folks. We are in one! And no matter what the court jesters do, we still will be.

Honestly, I try to be fair the the court jesters too. I think they mean well. To them, it is all about the timing of the recovery. Sooner, keeps them in office longer. Hummm, another good reason to do NOTHING.

There will be a recovery. At least there always has been one before, so I have to believe there will be now too. Maybe the question is not when, but what will the new world after it look like?

Listen to our court jesters and it will be a socialist system, and 45% or more of every dollar you make will be earmarked for the government. And how long before we re-enact debtors prisons too?

Have we so soon forgotten? This country was FOUNDED by people trying to avoid government interference and unreasonable taxation? Our fore-fathers fought to the death to PREVENT exactly what we are doing now, or may be about to.

Yes, it may be a sad day. There may still be more ahead, who knows. Some of them may get worse too. But, I assure you, at some point, things will get better.

And NO, Chicken Little, the sky will not fall. Regardless of what the court jesters do.

Comments: View Comments |  Monday September 29, 2008