This just got a lot less fun...
There's an interesting new blog/podcast that may turn into a high quality source of information to consume regularly: the NPR Planet Money blog and podcast.
Here's a not-so-fun thought based on one of their recent blog posts...
Yesterday I criticized the Bush administration for herding us into the $700 billion bailout and not letting it be known that there was an alternative option in the form of the Fed buying up commercial paper.
It might be that I was wrong. The actual truth might be worse than my view. It might be this:
* No one actually knows how to solve the current economic crisis in the form of the frozen commercial paper market.
* Their first shot was the $700 billion bailout last Friday. It didn't work.
* Their second shot was having the Fed announce a program Tuesday to buy up commercial paper. It didn't work.
* Their third shot was coordinating with multiple countries around the world to lower interest rates today (Wednesday). Right now it appears that didn't work either.
* Their fourth and current shot, if I'm reading this correctly in this article in New York Times, is to take an ownership stake in various banks.
At some point, the Fed and the government will run out of things to try. I don't know what happens at that point, but something tells me it's really really bad. Last week Warren Buffett used the analogy of the athlete who's had a cardiac arrest and paramedics are on scene trying to shock his heart back into beating. To carry the analogy forward, each of the four actions above are shocks to the system to try to get things going again. If none of those shocks work, what happens to our economy?
Here is me, very un-educated, take on things. The press has the public riled up. Fear has already set it. Anything the govt does will fail because today is worse than yesterday, tonight’s news re-enforces that, and tomorrow joe blow will go and sell off things to get out of the market as the panic attack sets in. The govt is always one day behind that cycle. Unless there is some way to force a market correction (i.e the govt starts buying stocks like crazy to drive prices up.. over several consecutive days) (and anonymously so folks don't take it as an act of desperation) the slide will continue until only fear tolerant folks are left standing. I don't think the govt. can do anything like I mention, and I'm betting the percentage of fear tolerant folks is VERY small... so down we go.
Reply to this
your article is so informative and interesting. nice shared.
Reply to this
It seems that politicians are all little liars! LOL, like that was some secret. Let's just be smart with our money and the economy will become better. That's how it works.
Reply to this
Substantially, the article is really the best on this laudable topic. I concur with your conclusions and will eagerly look forward to your future updates. Just saying thank you will not just be enough, for the wonderful lucidity in your writing. I will instantly grab your rss feed to stay abreast of any updates. Gratifying work and much success in your business endeavors!!!!!
Reply to this
Useful information ..I am very happy to read this article..thanks for giving us this useful information. Fantastic walk-through. I appreciate this post.
Reply to this
This is a really good post. Must admit that you are amongst the best bloggers I have read. Thanks for posting this informative article.
Reply to this
I was very pleased to find this site. I wanted to thank you for this great read!! I definitely enjoyed every little bit of it and I have you bookmarked to check out the new stuff you post.
Reply to this
Really appreciate this post. It’s hard to sort the good from the bad sometimes, but I think you’ve nailed it!
Reply to this
Good post....thanks for sharing.. very useful for me i will bookmark this for my future needs. Thanks.
Reply to this