I was thinking, though, that someday, I might want to print out this blog, maybe even print it out in book form, and if my future family sees it, they might remember the context, or may not understand that Hurricane Ike didn't really come here.
I figure I would throw in a quick post about the current news situation. I should probably put something in here from time to time, instead of one big post.
The historic presidential campaign is going on. John McCain and Sarah Palin are running on the Republican ticket, while Barack Obama and Joe Biden are running on the Democratic ticket.
American soldiers are fighting in Iraq and Afghanistan. Whenever another country is mentioned on the news - Russia, Pakistan, etc., it makes me worry that soldiers will be sent there as well.
Many companies are downsizing or going bankrupt. Even big ones.
Many homes are in foreclosure, mostly due to variable rate mortgages and lax due diligence on the part of banks and mortgage companies. Many homeowners decided that when the price of their home dropped and they couldn't refinance their loan, that it was better to walk away instead of carry the debt, leaving their credit rating in ruins. This left many banks and the entire mortgage industry in crisis.
Insurance companies are having problems on two fronts - first they have had losses due to Hurricane Katrina and Hurricane Ike. They are also having trouble with the investments they bought.
The US government decided to help Fannie Mae and Freddie Mac (quasi-government agencies that buy mortgages). This week they decided to help AIG (insurance company), and will print more money in order to do so.
There are many middle class people who have stayed away from the bad mortgage loans, and have been trying to save money for their childrens' college education and their own retirements. Stock brokers and financial "experts" have been touting a 10% historical return in stocks, and have encouraged people to buy and stay in the stock market. The stock market is tumbling. And as more and more people get more and more worried, they will sell more of their stock and the tumble will continue. This is about the time when the baby boomers are coming into retirement age and will need to withdraw the money they have been saving up. A stock market downturn was expected, but not this much, and this early.
The US government is working on a bigger plan to help even more. This quote from today's news feeds straight into my fears.
The chairman of the Senate Banking Committee, Chris Dodd, D-Conn., warned on Friday that the United States could be "days away from a complete meltdown of our financial system" and said Congress would work quickly to prevent that.
I have worked in the financial services industry. I wish I could think through all these things and figure out what will be next, but it is too complicated for me. I get asked what people should do with their stocks, and I don't know what to tell them. I know that the stocks will continue to go down, and eventually they will go back up again. But when and by how much, I don't know. I also don't know how much of what I know is the sales pitch I have bought into, and I don't know whether the middle class will trust the stock market after this. And I don't know how the government intervention will factor into all this.
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