One year ago the Dow was 5000 points higher than it opened today. Did I hear that right? Can this be? One year ago the Dow was at 14165! Now it is down 35%.
Even Cramer, the thoroughly entertaining (to me, anyway) and highly energized TV financial markets commentator, now says get out of stocks. Get out of stocks? Who’da thunk?
And, most of the rest of the world’s organized economies are in the same, sinking boat. Iceland faces national bankruptcy; Iceland, for God’s sake!—all 300,000 residents—who would all fit comfortably on the West Side of Los Angeles with plenty of room left over for the rest of us. And, they could leave their Winter wardrobes back home.
Fear and panic obsess the media and we hear endless Man/Woman on the Street soundbites now- each, tugging at our heartstrings, telling their own stories of woe. Yesterday, my partner and I ate lunch at our favorite Thai restaurant where two waitresses told us that they think their lunch and dinner business is down by over half—which means their share of tips is not enough for them to support themselves. We are tantalized by the excesses of the corporate poster boys and girls of greed and piggy behavior—imagine, AIG wants billions more and they have the audacity to throw big, expensive parties to reward their highest performers with one hand while extending their outstretched palm for the government dole with the other!
We need to get a grip. And get a life. This is the first major worldwide crash of economic markets in the age of being totally wired globally so that we know everything everybody else is doing- instantaneously, if we want to spend our days on the Internet. As of June 30, 2008, according to a website that tracks these things—and, there is a website that tracks anything and everything you care about—some 1.4 billion people worldwide, some one-fifth of the world’s population, have Internet access now. If you sneeze in Bombay today, somebody in London catches cold.
So, we get this ‘Crash and Burn’ drama up close and personal every minute of the day, if we have the stomach for it. It’s playing 24-7 on my TV, my Internet, my Blackberry, my newspapers, my neighbors’ minds, and that’s all anybody is talking about—and, there’s nowhere to hide. Or, we can get a life, and get busy with other things than the Gloom and Doom mentality which the media has made the flavor of the month.
I predict that, eventually, life will return to normal, but normal may feel a lot more like the 50’s than like the ‘Greed is Good’ 90’s and ‘00’s, so far. Regulation will be back shortly, after we finish up on this election early next month, whoever wins. The Dow will creep back up eventually—there are many undervalued stocks now and it is just a matter of time. New dirty words in our lexicon will now include: Wall Street, Credit Default Swap, Bail-out, and ‘Look at my new Ferrari!’
And, surely, we will find something else to obsess over.