This Year
Posted by lagbnaft 10 years ago
Winston Churchill once said, “You can always count on the U.S. to do the right thing--once it has exhausted the alternatives.” Churchill’s cynicism rarely remained undetected and this quote is no exception. The truth is, more times than not, our great country has done the right thing, long before exhausting all the alternatives. In this present economic crisis, however, I fear Churchill might have hit the nail on the head. The more one looks into the roots, growth, and poisonous fruit of this predicament, you will see people choosing to do the wrong thing all along the path. The consumer taking out a loan he couldn’t pay; the broker pushing him to do so; the institutions behind the broker offering subprime or Alt-A and NINJA loans to anyone who would take them and then packaging them up with other toxic loans into asset-backed securities and collateralized debt obligations and then selling those to a wide variety of investors all over the world who divided or combined them into what’s called CDO squared and CDO cubed assets. The banks got involved and the politicians did too, all trying to make a buck on a house of cards they knew wouldn’t stand. Now the house of cards has fallen, and real people like you and me are paying the price. I guess our hope now is that with all the alternatives exhausted, our economic and political leadership will begin to do the right thing.  
Or is that our hope? I mean really? Do I think our leadership is capable of doing the right things now that we have reached the crisis point? Yes I do. Do I pin my hope there? Absolutely not. My hope is found in a much more secure place! My portfolio (if you want to call it that) has taken a major hit the last two months. I am fortunate that I am in my mid-forties because our friends in their 60s and 70s are in a very difficult predicament. But all of us have reason for concern, and most of us are asking the question, “what if this time it is different, and everything I was putting my trust in for a financially secure future is falling away?” This is good question to ask as we plan for our futures and the futures of our kids as well.  
Be real, be strong. We all will survive.