Like the proverbial groundhog, the financial market has become afraid of its own shadow. Day by day this last week, new announcements were made of well know and respected financial companies filing bankruptcy, being acquired for pennies on the dollar, being controlled by other entities, or being bailed out by the government. The list includes big names that those outside of Wall Street recognize. Names like Merrill Lynch, Lehman Brothers, and AIG are known in many households that don't dabble in the market.
From my perspective there is no denying a recession. The person on the street is feeling the pinch financially. Gas price increases have permeated our very lives. Goods and services of all kinds have been hit with increases as fall out from the gas prices. As people attempt to survive their pocketbook depletion, service and travel industries are losing business. The shadow of doom grows larger as the general populace worries about their jobs and pure survival.
A year ago, many real estate agents thought it was just real estate that was taking a hit. The far reaching effect of careless mortgage loans had not yet fully been realized. This year many are fearful. We are experiencing the "biggest realignment of the financial system since the Great Depression" according to the Associated Press.
Was it the public fear and rush to withdraw their funds that finally caused the Crash? Had depositors and stock holders just "stayed in" until the trouble subsided would they have been fine? If one were to follow the stocks from the time of the Great Depression, some did survive and became strong in future years.
Not being an economist, the almost daily reports of financial stress this last week, have left me reeling! Have I checked my IRA's or TLH's 401K? No. Whether I'm wrong or right, I really don't want to see that market shadow. Time tends to heal many things and I think I'll wait for the market to heal itself. The national decisions are out of my hands anyway, so worrying about it is not going to help the decision makers one iota! In the interim, I think I'll practice my survival skills!