Is It Time to Panic?

I took a few days off this week, and took my partner A. to Atlantic City. A., unlike me, is a pretty staid and upstanding citizen, and her only vice is that she loves to play the slots. She's pretty lucky too, she wins a lot more than she loses. I usually put my 20 bucks in a penny machine that makes a lot of noise, lose it all in like ten minutes, then head to the bar where the drinks are really cheap, and the waitresses are wearing....well...not very much. I am quite content to watch the various sporting events on huge TV screens and over-tip the wait staff, while A. rakes in the money.

Anyway, I got back yesterday and checked my e-mail, and found one from motleyfool.com that read, "READ THIS BEFORE THE MARKET CRASHES". It was dated January 2, and it appeared that I was already too late, because when I checked the markets, the Dow had just closed at 12,800 which was about 700 points lower than when I checked last week. Yikes! I opened the e-mail, and read the first sentence, MSN Money reports..."The economic and financial landscape bears striking similarities to 1929." I'm thinking....1929 wasn't that the beginning of the Great Depression? Did I miss something? Last I heard, no one was even saying the R word, and doesn't a recession come before a depression? The e-mail went on to encourage me to invest what remained of my 401k in some stock that was a sure-fire way to avoid poverty and disaster.

I wanted more information.

So I did a little research. I found a recent article in the LA Times that made the acid in my stomach churn. It was entitled "Symptoms of An Economic Depression". I called down to A., who was busy unpacking her suitcase, "Hey, honey....uhmm... how much cash did you win?" She had come back with a few large bills, and I was thinking that we ought to just stash them under the mattress, or put them in the cookie jar, oh but we don't have a cookie jar, only straight people have those. Where might we put those bills? Certainly not in the bank, if history is to be repeated and our financial institutions go belly up like some dead fish. I reached for the bottle of Tums on my desk, and wondered if I had any serious meds that would relieve my anxiety.

But it's not like we didn't see this coming, is it? I'm not by any means a person who understands economics, but like every other American, I know how to balance a checkbook, and I know that if America has no product to sell, that there is no income, and no jobs. If we can't produce things that the world wants to buy, then there is no economy. And if our financial institutions have no money to lend the people who want to produce things, it doesn't matter how much the FED lowers the interest rates, no capital means no money. And it's funny, I watch MSNBC all the time, and the experts are always positive, always sunny, maybe the Wall Street people think that money grows on trees. Maybe for them it does. For the rest of us, people who work for a living and actually make things that people buy, money comes from sweat and overtime, and muscles that hurt at the end of the day.

I'm not sure what 2008 will bring, but I'm not looking at mutual funds right now, no matter how Morningstar rates them. I'm looking for a loose brick, a corner of the attic, a tiny place to hide some cash, and hoping that the dollars I stash will not become so devalued that they will buy me nothing if Wall Street goes bust and the shit hits the fan.

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