throw the ransom
On the surface, today’s bill was a pretty acceptable, if not good, bill in response to an unprecedented credit and liquidity situation being generated here on Wall Street in the US and being generated around the world. Voting to pass it to rectify the gross ineptitudes of lax financial regulation and its aftermath of failed banks and credit crunch at the same time was apparently too daunting for many of us elected to lead us in Washington. Leaders lead in difficult times. Shamefully, and certainly regrettably, our leaders did not lead effectively today, from the president on down.
It has been said in recent weeks that investors hate uncertainty. I do not agree! My miserable 30 years in the business of advising clients to match their monetary investments with their choices have told me that investors HATE lying! So, when the lie generates uncertainty in the markets, prices turn and the press and the media pounce like hungry tigers to which red meat is thrown for a week.
Special interest groups have no idea what was in this bill, nor what checks and balances had been added, so they have lit and fanned a huge steamy bonfire, warning anyone who might fog up a mirror to calling or emailing your representatives or members of Congress on Capital Hill and voting NO, was as irresponsible as special interest groups tend to be.
Where were those same special interest groups last week? Just as in the dark as yesterday, however, yesterday you chose to pull the trigger on the email that made you so itchy for so many days; too many days, in fact, and let their voices be heard. Where were these people throughout this lengthy process of applying for maximum home equity loans, getting credit with just a signature? Who needs a job? Where were these savvy consumers who borrowed more money than their paychecks, often with interest just because the loan shark sold it to them? Where have these people who have often been caught up in impulsive spending been in recent years and are now faced with the sobering truth that yes, indeed, these massive credit card balances do have to be repaid, not just paid off? monthly minimum? Is it too harsh to make the comparison that while 700 billion sounds too BIG to swallow, so is the average American’s credit card balance relative to their annual salary? Who has dropped their common sense here? Oh… maybe most of us!
So we actually have action today. The voices of the proverbial “Bill and Betty in Boise” have been heard; mainly their NOT registered vote. Bill & Betty have effectively outperformed our elected officials and the financial representatives of our governments, who, despite not having crystal balls, do have a fiduciary duty to us, the taxpayers, and who could be prosecuted for misappropriation, if I correctly understood the checks, and -balances that were written on the final bill.
Perhaps my fictional characters Bill and Betty believe that this “relief” is for the other boy and not them. It is not. The first time you’re trying to get a credit card, mortgage or car loan, or hoping your employer can simply and continuously finance your payroll, yes your income– Outside of your Money Market, you will realize that your life and that of your family are also impacted. You see, while we may not have seen our neighbors, near and far, we’re still all sewn at the hip with financial systems as intertwined as they are—unless, of course, you live on a remote farm, grow your own food , and till the fields with horses that don’t require that damn expensive gasoline we’ve all been saddled with.
The so-called bailout bill (and I TRUST they’ll give it an identifiable name next time) is needed and perhaps the rout was thrown as soon as they named it, a week ago. The bailout sounds like the average unaffected guy and gal would have to do the heavy lifting for high-end players who should have backed off at the financial buffet tables before the second round of desserts. That’s a BIG part of the problem.
And finally, I really think there was still a lot of confusion and indecision surrounding this final bill; yes, that same confusion that apparently led John McCain to return to Washington to explain, particularly to his party, but IF some House Republicans got so upset when Pelosi described the cause of these dire circumstances this afternoon, that they changed their vote Due to displaced anger, I suggest you:
1) grow into the leadership roles they have been chosen to fill, and
2) redirect that same anger at the failed policies and politicians behind them over the last 8 years, just as many voters are prepared to do in November.
After all, where did that huge surplus of 2000 evaporate? Ahhh the truth again. Oops, that hurts! And yes, the current financial situation of the United States and the world hurts too, it hurts that brave and strong-willed elected officials lead by putting a shovel in the ground of rebuilding, not running for cover yelling “Chicken Little, Chicken Little” .
Smart money is ALWAYS long term, so fear is not an effective emotion now. Nor are stock sales now at depressed levels. If you are not diversified with your Certificates of Deposit to qualify for FDIC insurance on all of your fixed income deposits, then transfers of the excess amount of FDIC insurance to achieve that end are in order. Otherwise, keep your gunpowder dry and pray for more wisdom than has been served up in Washington today.
