I'm getting really torn about this. My first impulse was to say, "yes, of course, we can't have the risk of a meltdown".
I'm not so sure now. It's been several days, and the stock market isn't in free-fall yet. What MAY happen is that financial institutions that made butt-head decisions may take a hit. Some may even be bought out.
I can't say that I really understand why someone would want to buy a failing bank or financial company, but they keep getting scooped up by another company. The new, larger bank always seems to handle it.
Of course, that does leave some workers on the street. Which is tough - particularly for the older workers, who may experience great difficulty getting another job.
There's a lesson here, I think. No matter how great your income, no matter how big the company you work for, you have to be prepared to lose it all.
So, pay down your debt while you have the money. Don't buy the biggest house you can qualify for (that would have been excellent advice for many homeowners - they might have avoided bankruptcy), and don't box yourself in so tight that a few months unemployment will bring your life crashing down.
1 comment:
You don't understand what's happening at all.
Hell, I don't much like the idea of a bailout either... but it isn't a business failure problem, it's an asset-backed credit valuation problem.
I.e., there's a whole bunch of shitty loans and properties and no business knows what anything is worth due to stupid changes in financial accounting rules. So hundreds of billions of dollars worth of credit are beginning to "freeze" and corporations will find it difficult to raise credit to meet their payroll and continue operations.
If this happens, corporate credit will grind to a halt, consumer credit will be tougher to get, and the economy will grind to a halt.
How long and to what degree are the debatable questions.
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