Time to Panic?

This is one of those posts that I'm writing for my own benefit. It's a place holder, a bookmark of the stomach turning fun that's been had on Wall Street the last few weeks. Today The Fed seized WaMu because they have an idiotic name.

This seizure follows all kinds of badness going on, AIG, Bear Stearns (now there's a name), Freddie Mac, Fannie Mae, etc... The whole market is having one huge epileptic fit, its what some economist have called a "correction". Forget that crap, give me the bubble baby, my e-Trade account likey the bubble. Okay confession, I don't even have an e-Trade account, even that baby on TV has an e-Trade account, I'm a little ashamed of myself.

In all seriousness the events of the last several months have caused me to wonder where we're headed. When you hear analysts talking about the potential for a Greater Depression then you have to worry. What do you do with that kind of information? There is no easy way to digest events of such scale yet with such an intimate effect. Are we talking about bread lines and 25% unemployment?

Couple of things about the Great Depression stuck out to me as I looked back over the wikipedia article. One was that economic downturn is not a quick process, its a sudden breaking event followed by a slow fall. Two, it was incredibly long, 10 years. Three, there was no policy that fixed the Great Depression, it was World War 2 that ended the depression.

Economics amaze me. The market, it is charged with the collective emotions of the entire world, it feels, reacts, breathes, and shutters.

The things that scare me...

How similar the causes for The Great Depression mirror the situation today. The crisis of the late 1920's has been attributed by some to cheap credit and debt. It seems a situation where you are basically cashing in tomorrows wealth today. Interesting analogy, the Prodigal Son. He cashes in his wealth, and ends up in a depression. This is what we as a society have been doing, cashing in tomorrow for today.

In the 1930's prices fell, right now they're rising. Fuel costs are continuing to rise, and driving consumer goods up. We have the potential for both depression and inflation at the same moment. How do you deal with that?

This morning I read some of The Sermon on the Mount. "Do not worry for tomorrow for tomorrow till take care of itself..." Guess that's the answer to my question, "tomorrow will take care of itself".