My cohort DJ is going to disagree with me. Just you wait and see.
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Today [1] did not scare me. It did surprise me, because I didn’t think that Congress had the ability to face down the President, Treasury Secretary and their own part leaders all at the same time. (For the votes of the Representatives from Iowa, see below, or this link for the roll call vote [2]).
I am so proud of them! From the above Reuter’s article:
“This isn’t legislation. This is extortion,” said Florida Republican Rep. Ginny Brown-Waite. “This is so embarrassing it turns the stomach of most Americans.”
That pretty much sums up my thinking on this.
As I mentioned yesterday, I think we should seriously consider turning this bailout into a bond issue, and perhaps force some of those who have been steering these ships to buy and add the bonds to their retirement packages. Instead of selling taxpayers a bill of goods, sell these instruments back to the people that brought them to us, and maybe they might do some things to help make sure the instruments become profitable.
So, the Dow dropped 748 points by the end of the day, it’s largest one-day point drop ever, and yet the ground did not open and swallow me up. It almost seemed like just another day.
And the biggest surprise to many who have been watching oil prices jump in the opposit direction of the stock market on most days was a $10.52 drop in the price of oil. We are at $96.37!
And, according to gas-cost.net [3] (widget found in the middle column of our page), the average price of a gallon of regular gasoline is now $2.76. We are defintely going in the right direction on gas prices.
If only that were enough.
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I know this is going to be a tough week. And frankly, we’re probably in for a tough time for quite a while. It makes no sense to me to draw out the inevitable events and put them on out children’s shoulders instead of taking it on ourselves.
This generation’s ability to suck it in and work through this problem, regardless of whether it ends up as a regressive blip or a deep depression, will be a key test for our society. Our survival may depend on our ability to live with less, to accept failure, to put aside our selfishness and work (and I mean WORK) to rebuild and help our neighbors through the difficult road ahead.
Something we’ve been trying for decades to ensure we would never have to do.
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If you think me a fool for not being scared by all of this, perhaps it’s true. But I do know the one who owns it all, and I believe He is in control. That doesn’t mean we won’t have bad times, but I believe God has a plan.
And DJ won’t argue against that, I assure you.
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For those readers from Iowa, here is how our Congressmen voted:
Braley (District 1): No
Loebsack (District 2):Yes
Boswell (District 3): Yes
Latham (District 4): No
King (District 5): No
Doesn’t look very bipartisan to me.
Update: Added link to roll call vote.
Comments Disabled To "The Economy Today"
#1 Comment By DJ Durant On October 1, 2008 @ 4:24 pm
I’ve had a couple of days to digest this whole thing, and that provides perspective. Action is better than inaction and at least Msrs. Bernanke and Paulson and President Bush were willing to try something to restore confidence to the credit market, as opposed to sit around and wring their hands and blame everyone but themselves (Sen. Dodd and Rep. Frank, sound familiar?).
I’m reminded of the 60 Minutes interview with Sec. Paulson. I guess what I didn’t realize was how severely the credit markets nearly imploded. It’s easy to say that the world didn’t swallow us up, but when you’re going through it, and when you’re trying to help other people manage their retirement plans…well, let’s just say it’s pretty uncomfortable.
#2 Comment By Art Smith On October 1, 2008 @ 9:19 pm
Thanks, DJ. I understand where you’re coming from, but I still don’t think that rushing a process that puts the taxpayers money at risk is the right thing to do. And the fact that the Tuesday hit on the Market was over a trillion dollars just makes me think Wall Street already has the deep pockets to solve this.
I’m even more concerned when WSJ publishes a story like they did this morning highlighting the pain of an elderly investor that kept a single stock investment out of pride, amounting to 1/3 of her income, instead of establishing an appropriate diversification approach to reduce her exposure. The message from the article is: people are hurting because the market is crashing. The real message should be: don’t put all your eggs in one basket.
I know that even well diversified portfolios are getting hit hard. Mine is down substantially as well. But I’m confident that it will be back up again. I believe the money is needed to open up the credit flow, but I just don’t think taxpayers need to finance it.
Oh, and by the way, I’m still way up on the positive side on the bank stock I own. Up about 25% for the year so far on 2 quarter-end (Q1 and Q2) investments. Not that I’m that smart, it just worked out.