May we live in interesting times

Tuesday, 1:19 pm

By Kate

Jan

22

2008

With yesterday’s bloodbath in global financial markets (and still bleeding today) and a 3/4 of a point Fed rate cut today, one might get the impression that we’re in trouble. While the Dow might not totally tank today, it’s a pretty good bet that it’s not going to go all robust on us in the foreseeable future.

I’m not privy to the financial talking heads on the cable networks, but, from what I understand, they seem to be utterly shocked by what’s happening. Which leads me to wonder what world they are living in. This has been brewing for quite some time now and it was only a matter of when, not if.

It seems that the global financial markets were a little scared by the president’s stimulus package idea that we should each get an $800 check to help buy our way out of this mess. I think part of the problem is that we bought our way into this mess in the first place. He’s looking at a remarkable legacy at the moment...the guy who watched it all implode and told us to keep spending.

What can solve our insolvency now? I don’t know. I suppose giving up greed for Lent this year might be a good first step. Maybe not paying for two wars on borrowed money would be smart. Maybe ethical business practices would help. Maybe a little regulation of the financial industry would be a good idea. You know, loaning out way more money than they had on their balance sheets was, for quite a while, considered an unsound business practice. That compounded by handing out loans (sub-prime and conventional) for over-valued houses with little or no down payment and subsequent cash out refinancing...well, here we are. If financial institutions aren’t bright enough (or are too greedy) to follow basic sound business practices, maybe we oughta re-regulate them up to the eyeballs to make sure that they behave in the future. Again. When the financial institutions treat our houses and investments like monopoly money, it’s time to take away the keys to the vaults. It looks as if they’ve spent the golden eggs and overworked the goose into a coma.

Why are the talking heads so surprised?

I’m thrilled. How about you?

In another bit of greed news, I read someplace yesterday that two of the large oil companies (Shell and BP, I think) have suspended contributions to their pension funds for the next year. Weren’t they among the number who have seen billions of dollars in profits the last couple of quarters? And obscene bonuses? But they’re too strapped to meet their pension fund obligations? Huh.