Life goes on.... No matter what is happening in world markets, life goes on for all of us, and we continue to struggle with the same issues, and enjoy the same pleasures, in most cases, as we did before dark clouds began to gather in the world's economies. There are those who are not so fortunate, and there are many of them- older people who watched as potentially comfortable retirements melted away, and others, who lost jobs, or homes. These victims of the invention and promulgation of collateralized mortgage backed securities have suffered directly, and will continue to suffer, as lost wealth and lost years are truly gone, though wealth can sometimes be restored, in conditions where wealth not lost would have doubled! People have been taught that boom and bust is a natural part of business cycles, and it may be so, to a degree; but, this latest blow was entirely man made, and unnecessary. One should never discount the true human suffering that others' boundless greed can impose on the rest of us.... ______________________
The crash of 2008 I've mentioned before that the crash of fall, 2008, was like watching a slow motion train wreck, and a recent visit to a doctor's waiting room reminded me just how much that was true. There was a magazine dated July 2007 in which they were talking about how the Federal Reserve was pulling out all the stops to try to head off a collapse, as it was clear the housing market was starting to tank, a process that would accelerate as variable rate mortgages reset. The focus of the article was on how the housing market had dried up: everyone who cared to buy a house- or a second house, or a house to speculate on- had already bought them, many with loans which required NO qualifying, NO down payment and, in many cases, NO payments for the first two years. Lenders had lost their minds, along with everyone else, in the rush to cash in on the boom, and the chickens were starting to come home to roost. The world is still living with the consequences of the policies, and mentality, that set that chain of events in motion. ____________________
Euro tanking On March 24, Life_in_Cancun wrote: The way I understood this, Life was predicting that the Euro would reach parity (1:1) with the dollar, then fall even further. (At the time I thought he was being a little too pessimistic but it seems he may yet be proven right!) The Euro has fallen from $1.50 USD/Euro, on December 1, to $124 as of Friday, making a European holiday, this summer, just that much more affordable. Some of my Mexican colleagues, who had been planning to visit China this summer, are now thinking about Europe, instead. ____________________ While the Euro is weaker against the dollar, and projected to weaken, further, there are other currencies that have shown strength against the dollar, and great strength against the Euro. "The Canadian dollar, Swedish krona and Australian dollar are all issued by strong governments in countries with stable inflation and robust economic growth," (quoting Barron's). For more, see- www.online.barrons.com
The necessary response is one that is very unpalatable to most politicians. There has to be a combination of increased taxes and decreased spending. Otherwise we are looking at joining Greece on the edge of bankruptcy. This is exactly why most of us that opposed Obamacare were so vehement. We just simply can't afford it right now.
The mistake.... I agree with you twini, about the timing of health care reform: with the country in economic/fiscal crisis, the timing couldn't have been worse. Obama strikes me as a serious man, but this was one occasion where he could have been even more serious, and done the country a much needed good. To solve the problems, the whole nation is going to have to be onboard. I think if he'd given the following speech, it could have gone a long way in that direction. "Ladies and gentlemen, I think you all know how much health reform means to me, and to those who helped elect me; so, what I'm about to say, I say in all seriousness. I'm putting health care reform aside for now owing to the profound crisis our country is facing. Personal and governmental irresponsibility, in the form of borrowing and spending far more than we should have, has put this country and its people into a deep financial hole. We can get out of it, but it's going to take everybody doing their part. It's going to mean sacrifice of programs we've all come to rely on, and perhaps even of a lowering of our expectations for the kind of life we're going to lead- until we, as a people, have gotten a handle on this. I know I can count on you all: the future of our country depends on it." Several years devoted to this effort would have convinced the people that he was possibly the man the country needed, at this moment in time, whether they were Democrats or Republicans, or "none of the above", and truly won a consensus for doing what was necessary to put the country back on firm footing. As it is, what they mainly saw was someone determined to have his way on the issue of health care reform- needed perhaps, but even more needed was the full support of the American people, something he seems to have calculated he could do without.
Sadly V, we haven't had a real leader in the White House in years and years. All we have these days are pretty boys who can get elected because they have a ton of money behind them which came from sources we probably don't want to know about. Sadly I think we are at a point of government for sale to the highest bidder.
Theoretically speaking, that would have been beyond doubt, Obama's best speech AND he would have stayed true to many of his now broken campaign promises. However, that would be impossible to embrace considering ideology of the left to which he is High Priest, along with the other ministers of fanatic liberalism, Nancy Pelosi, or Harry Reid !
Correction, or "mini" collapse? On February 4, I wrote: There's not nearly as much money to wring out of the system as there was in the fall of 2008, but what's happening (now) makes me concerned we may be witnessing the beginning of another collapse like we saw then, just on a smaller scale, in which all asset classes lose money. Being all cash, in USD, as Claire326 mentioned, was the ticket, then, and may again prove to be just what the doctor ordered, for those who are trying to preserve their capital. ______________________
