MORALITY AND THE LAW CLVIII
By Stephen Ellis
PANIC ON WALL STREET
To all my dear readers: I have been writing this blog every week for three years. Last week, AOL informed me that they are discontinuing the publication of blogs. If any of you want to read my blogs on Morality and the Law, they can be found at
http://www.moralityandthelawakanobodyaskedme.blogspot.com/.
More important: I’ve decided to use this change as an opportunity to write more about a subject dear to my heart: the paranormal. I’ve been researching paranormal phenomena and scientific “baloney” for more than thirty years and what I have discovered may amaze you, it may upset you or…it may awaken you to some things. It’s time I shared this information, and I hope you will read it. It can be found at http://www.explaininglifesmysteries.blogspot.com/.
Nobody asked me, but…
Back in 1933, then President Franklin Roosevelt made a speech in which he said “The only thing we have to fear is fear itself…” He made this famous speech because the USA economy was in a free-fall, the stock market was plunging and unemployment was rising.
Sound familiar?
The conditions now are quite different than they were then, but the advice is the same. The people who came out well from the great depression of the 1930s were the ones who did not panic, and managed to “stay the course” until things got better. The banks now are much stronger than they were then when Roosevelt called a bank-holiday to stop people from withdrawing their funds from the banks. Today’s banks are very strong. Banks like Chase, Citibank, Wells Fargo, Bank of America, Union Bank, etc., are not only strong, they are thousands of times stronger than the banks were in the 1930s. More important, deposits are now insured by the Federal Government up to $250,000 per depositor (that means that a joint account of a married couple is now insured up to $500,000).
So, why, when a bank fails, are people lining up on the street to take their money out of it? Fear!
Millions of people, who simply do not understand, are afraid that if a bank fails, they will lose their savings. This was true in 1933, but it’s not true now. But, inasmuch as most Americans have never taken the time to understand how banks work, they have allowed “fear” instead of “common sense” to control their actions.
The free-fall of the stock market is similar, but not identical: There is no Federal Insurance on stocks and bonds…for an excellent reason: People invest in stocks and bonds because they want to gamble that the rise of stock prices will offer a better return than the interest given by banks. But if you place your money on a table in Las Vegas, you know there is a chance that you will lose. The stock market is no different. Stock brokerage houses are some of the most conservatively-dressed gambling casinos in the world…but, again, there is a difference: If you lose your money in Vegas, it is gone…completely gone.
But when you gamble on stocks and bonds, you have the strength of an industry or a company covering your downside. Most companies listed on the New York Stock Exchange or the NASDEQ may have gone down slightly, but they are still strong and still making money or making the kinds of adjustments for losses that will help them to recover from losses. But when people see the Dow Jones or the NASDEQ plunging, they start “panic selling”. Again, fear! People are afraid their investments (which may make up a substantial part of their retirement funds) are going to “vanish” like money on a Las Vegas table.
That’s the surest way to lose all your money!
The Wall Street “insiders” foresaw what was coming and sold their stock holdings a month ago. They’re just waiting for the panic-selling to stop so they can go in and buy back the same stocks at pennies on the dollar. For those with enough foresight and courage to “stick-it-out”, the stock market will recover…it has to because most of the companies whose stock is traded on the market are still making money. Sure, there will be some losses until the market makes a full recovery in a year or two, but instead of losing everything, those people will only have lost a little. Those who panicked may well lose everything.
One extremely important factor is that the government has now stepped in and joined hands with a lot of other governments. The “bailout” may not be the best way to handle the situation, but it is a good way. When the Fed starts flooding the banks and other lending institutions with money, the credit-crunch will ease up. With credit more readily available, cars will again start to sell, real estate will again start to sell, etc. The symptoms of the economic problems will disappear.
The bailout, however, will do much more: It will ease the credit crunch, but it will also put and end to the stupid deregulation that caused it all. While the participation of government in banks and other financial companies may smack of Socialism and be anti free-enterprise, right now it’s needed to stop the abuse of the “insiders” who have devastated our economy while putting billions of dollars in their own pockets. Maybe…just maybe…a new President will convene a Grand Jury and bring some charges for grand theft and corruption against some of the “insiders”. It would be good for this country and the entire world.
As I said…nobody asked me.
By Stephen Ellis
PANIC ON WALL STREET
To all my dear readers: I have been writing this blog every week for three years. Last week, AOL informed me that they are discontinuing the publication of blogs. If any of you want to read my blogs on Morality and the Law, they can be found at
http://www.moralityandthelawakanobodyaskedme.blogspot.com/.
More important: I’ve decided to use this change as an opportunity to write more about a subject dear to my heart: the paranormal. I’ve been researching paranormal phenomena and scientific “baloney” for more than thirty years and what I have discovered may amaze you, it may upset you or…it may awaken you to some things. It’s time I shared this information, and I hope you will read it. It can be found at http://www.explaininglifesmysteries.blogspot.com/.
Nobody asked me, but…
Back in 1933, then President Franklin Roosevelt made a speech in which he said “The only thing we have to fear is fear itself…” He made this famous speech because the USA economy was in a free-fall, the stock market was plunging and unemployment was rising.
Sound familiar?
The conditions now are quite different than they were then, but the advice is the same. The people who came out well from the great depression of the 1930s were the ones who did not panic, and managed to “stay the course” until things got better. The banks now are much stronger than they were then when Roosevelt called a bank-holiday to stop people from withdrawing their funds from the banks. Today’s banks are very strong. Banks like Chase, Citibank, Wells Fargo, Bank of America, Union Bank, etc., are not only strong, they are thousands of times stronger than the banks were in the 1930s. More important, deposits are now insured by the Federal Government up to $250,000 per depositor (that means that a joint account of a married couple is now insured up to $500,000).
So, why, when a bank fails, are people lining up on the street to take their money out of it? Fear!
Millions of people, who simply do not understand, are afraid that if a bank fails, they will lose their savings. This was true in 1933, but it’s not true now. But, inasmuch as most Americans have never taken the time to understand how banks work, they have allowed “fear” instead of “common sense” to control their actions.
The free-fall of the stock market is similar, but not identical: There is no Federal Insurance on stocks and bonds…for an excellent reason: People invest in stocks and bonds because they want to gamble that the rise of stock prices will offer a better return than the interest given by banks. But if you place your money on a table in Las Vegas, you know there is a chance that you will lose. The stock market is no different. Stock brokerage houses are some of the most conservatively-dressed gambling casinos in the world…but, again, there is a difference: If you lose your money in Vegas, it is gone…completely gone.
But when you gamble on stocks and bonds, you have the strength of an industry or a company covering your downside. Most companies listed on the New York Stock Exchange or the NASDEQ may have gone down slightly, but they are still strong and still making money or making the kinds of adjustments for losses that will help them to recover from losses. But when people see the Dow Jones or the NASDEQ plunging, they start “panic selling”. Again, fear! People are afraid their investments (which may make up a substantial part of their retirement funds) are going to “vanish” like money on a Las Vegas table.
That’s the surest way to lose all your money!
The Wall Street “insiders” foresaw what was coming and sold their stock holdings a month ago. They’re just waiting for the panic-selling to stop so they can go in and buy back the same stocks at pennies on the dollar. For those with enough foresight and courage to “stick-it-out”, the stock market will recover…it has to because most of the companies whose stock is traded on the market are still making money. Sure, there will be some losses until the market makes a full recovery in a year or two, but instead of losing everything, those people will only have lost a little. Those who panicked may well lose everything.
One extremely important factor is that the government has now stepped in and joined hands with a lot of other governments. The “bailout” may not be the best way to handle the situation, but it is a good way. When the Fed starts flooding the banks and other lending institutions with money, the credit-crunch will ease up. With credit more readily available, cars will again start to sell, real estate will again start to sell, etc. The symptoms of the economic problems will disappear.
The bailout, however, will do much more: It will ease the credit crunch, but it will also put and end to the stupid deregulation that caused it all. While the participation of government in banks and other financial companies may smack of Socialism and be anti free-enterprise, right now it’s needed to stop the abuse of the “insiders” who have devastated our economy while putting billions of dollars in their own pockets. Maybe…just maybe…a new President will convene a Grand Jury and bring some charges for grand theft and corruption against some of the “insiders”. It would be good for this country and the entire world.
As I said…nobody asked me.
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