What has happened to our economy here in the great United States of America? Seems like the sky is falling and only getting worse. Over the last couple weeks Wall Street has been going through extraordinary changes that it has not seen the likes of in, I don't know, a REALLY long time. Huge banks, savings and loans, and insurance companies are going under. Our economy is trembling.
Washington Mutual, that I have some stock in, is going under. AIG just started cracking, Bank of America bought Merrill Lynch, new home sales are the lowest in 17 years, home values are still falling, oil is still way to expensive and going up, gasoline shortages, Fannie and Freddie were just bailed out, job loss is rising, loans are increasingly difficult to get (especially for those with fair to decent credit), and to top it off, the market for mortgage backed securities and interbank loans disappeared last week.
This last one prompted the Federal Government to freak out and launch this 700 billion dollar bail out plan and this started to make me think. I mean, doesn't the government have a ton of safe guards in place to keep the economy from tanking already? What about the lessons learned from the Great Depression like a limit on how much the market can lose in one day or the FDIC or Fannie and Freddie? All of these things are supposed to keep our financial system from tanking. Fannie and Freddie guarantee a trillion dollars in mortgages, the FDIC insures the assets held by banks that collectively have a total of 13.4 trillion in assets. Now, on top of all this, the government is so freaked out that it is proposing more, 700 billion more, to stop the economy from crashing by essentially privatizing the gains and socializing the losses to prop up the economy. To put 700 billion in perspective, the total amount of credit card debt held by Americans is about 850 billion. The total cost of the Iraq war from 2003 - 2008 was been about 700 billion dollars.
That has to make you feel all warm and fuzzy inside concerning the state of our economy. Personally, I think I'm starting to see the writing on the wall. For the last year, I've noticed that the optimists are now starting to talk about "tough" times ahead and the cynics have changed their tones from "tough" times to economic Armageddon.
We shall see...as for me, I'm going to try to eliminate as much debt as possible and put my finances in order to prepare for whatever is coming.