Archive for ‘Wall Street’

Why All the Doom and Gloom?

By , 3 October, 2010, No Comment

Like most things in life, there is a way to make money out of practically any situation. And, recession is no exception. Having been fortunate enough, or unfortunate enough, to have been day trading through several recessions, the doom-birds come to roost every time the economy takes a serious downturn. While there may be some individuals in the doomsday movement that are seriously concerned about the state of our economy, I am convinced that the vast majority are simply capitalizing on the fears and insecurities of the American public.

And they have a wide variety of doomsday cures to proffer. Buy gold, silver, you name it… and they have some sort of “fix it” product that is guaranteed to ameliorate any potential problems with the upcoming “end times.” This is not to say that there are not rough times ahead. Our country faces many serious problems and it will take innovative and creative solutions to steer clear of potentially serious economic situations. Personally, I have serious doubts that our current set of economists and politicians have the intestinal fortitude to tackle the serious issues that lay before us. But that issue is not the topic of this article.

No, what concerns me is the opportunist who is working overtime to exacerbate the public’s perception of our current economic woes. Our country has shown time and time again to be resilient and steadfast in its resolution and approach to crisis situations. Granted, many of our past presidents have shown little restraint in financing our public debt. This trend needs to stop. No country or individual can spend in excess of their earnings for any extended period of time. You need not be an economist to understand this simple principle. On the other hand, many of the citizens of our country have grown accustomed to the government solving even the smallest of economic hardships they face. Of course, this is not a government that our forefathers, our founding fathers, envisioned for the populace.

In short, we as a country will need to be more innovative in our approach to government spending. We must learn to do more with less money. In my opinion, this will be a bitter pill for many to swallow, but it is, nonetheless, an essential remedy for our current situation.

On the other hand, the chorus of the doomsday cabal grows louder every day; and richer every day. They would have you believe that we have found ourselves in an intractable situation; nothing is farther from the truth. While our debt load has increased in recent years, it is far from unmanageable. It is also true that the dollar has fallen against other currencies in recent years; some of this is intentional and some devaluation is the result of our current recession.

My point is a simple one; don’t buy into the notion that our country is lost. We are a powerful and influential force in the world. Our universities, contrary to what many may say, still produce great technological minds that will lead us in the coming century. We are still a country of great wealth and influence.

In short, don’t buy into the notion that all is lost, as many would have you believe. Every recession that I have experienced has brought forth a group of the doomsday cabal. They hawk their newsletters and negativity to a public unaware of the underlying strength of our country. They also make a tidy sum on spreading this negativity to anyone who’ll listen. Like all recessions, this one will come to an end and productivity and profitability will once again be the norm.

Needless to say, we will have to make some changes in the way Wall Street does business, and we have made some strides in that area. Personally, I was disappointed that the Republican leadership blocked the reinstatement of the Glass-Steagall Act which prevents Wall Street investment banks from the effectively securitizing mortgage loans. This was a great mistake, and one that may come back to roost yet again. It is my belief, however, that this oversight will be corrected in time and Wall Street investment banks will return to their proper function. We have a long way to emerge from our current economic woes, but we will emerge a better and more reliable economy than ever, and the doomsday cabal will once again sink into obscurity, that is, until we experience another recession.

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