Monday and Tuesday the stock market tanked, and today it’s been on a rollercoaster. It was down as much as 2.5 percent and up as much as 2.5 percent, finally ending down 189.01 points on the Dow. You could say that buyers and sellers are fighting over the future. Will the bank bailouts here in the United States and in the United Kingdom do the trick, or is the poison too strong for the present antidote.
Let’s not forget that this is not a liquidity crisis alone. It is a solvency crisis. What are those assets worth on the balance sheets of the banks? Nobody knows, and that’s why the Feds are going to buy the bad apples from the banks. Clean up the balance sheets and you clean up the crisis.
Should we really be frightened? Is this 1929 all over again (or more properly 1931, half way down)? Or is it worse than that? Tony Blankley helpfully suggested that it could be the Black Death when one third of the population of Europe perished.
We humans are hopelessly optimistic—except when we are hopelessly pessimistic. There’s always light at the end of the tunnel, except when we are trapped like rats in a maze.
It has to be that way. After all, we are all going to die. It’s one hundred percent guaranteed. So unless you are hopelessly optimistic you might be tempted to say: What’s the Point.
And what’s the point of that?
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