Monday, September 29, 2008

Financial Crisis

I have followed the financial crisis more intently than I typically follow any financial issue. I dislike meeting with my financial planner even though he is a friend and nice guy. I have a cursory knowledge of investments .... I choose not to try to understand more than necessary. I know who to call if I have questions and if issues arise.

However, the current situation demands closer attention on my part. Until today I was finding it interesting....a bit scary, but more interesting....Today, I am afraid to really concentrate on it because it seems worse than first imagined. While I would like to revert to my "let's live in fantasy land and not worry about such things" persona, this situation seems to call for a more grown up me. (Have I said I dislike reality?)

The basics of what I understand about the situation is this: lending giants irresponsibly made loans by speculating the worth of properties and when the housing market tanked they were shocked by their losses. These giants needed to fold because they had no money which means the stock market (which I can't even pretend to understand) dropped to all time lows and now credit for everyone has tightened. After watching an educational cartoon on CBS on how credit works and why/how it will be affected I can understant that this will impact us.

Now, I don't think tightening up credit a bit is a bad thing for most people. It seems we all rely too much on credit cards, spending beyond our means, etc. But, since the House failed to pass the bail out bill today it looks like the tightening will begin to bruise us. Again, I'm not sure how that will impact on me in particular but I sure have the gut feeling that it won't be good.

I can't even say whether I think it is good or bad to have the government (YOU and ME) bail out these institutions. Part of me finds it ridiculous that citizens have to help out .... as someone said, "It is the commoner helping out the aristocracy." I'd like to say let them go down. But, another part of me thinks that our country cannot afford to let these institutions fail because of the impact on the "commoner."

When I can't get my head around the issue is when I want to go into my happy little fantasy land. In that world there isn't even money . . .

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