The Great Depression

[kass_rants]

Okay. Listen up! I don't care what the media has been screaming about. This is NOT another Great Depression. I'm going to explain to you why.

Kass's Top Three Reasons Why This is Not Another Great DepressionThe Great Depression began with the crash of the stock market in October 1929 (the crashes are always in October...). Many investors

Comments

[alphafemale1]

I was hoping you would post. On Monday, the stock market closed below 10,000 points. I was panicking a bit, until I heard the last time that happened was...2004. :O Which made me realize that a least a part of this is normal market fluctuations, which made me feel better.

[kass_rants]

When I worked on Wall Street, we were debating whether the stock market would ever break 3000. Many people thought it wouldn't. It would get close and then drop, get close and then drop. And then we had that little "correction" in 1989 on my birthday of all the bloody things

[kateslover]

I used dollar cost averaging for years. My mutual funds have dropped precipitously of late (they're worth about half what they were last year), but I don't fear they'll go out of business. Unfortunately, now that I'm retired I don't have the capital to continue to invest while the price is down!

[kass_rants]

But at least you are smart and not selling what you have. It will come back. It always comes back.

[gwenyfhar]

Hi Kass,
I'm going to repost this in my LJ. I had made a post about "What Can I Do" last week that lists the same things you list to do, but the three reasons about this not being a Great Depression are what I want my other friends to read. My industry is not feeling the effects of the financial crunch right now but I'm working as a consultant for Big Blue on a contracting basis. Usually contractors are the first to go in a big economic crunch. I've still got my job and the word last week was it could go a few more years b/c of the amount of work we have on the project. Of course nothing is guaranteed. But I'm spending, saving and investing (diversified) as usual.

Thanks for all this great info. I read all the time but may not necessarily comment.

:)
Jenni

[kass_rants]

Hi Jenni. I'm glad if I can help. But instead of reposting, can you link to my post instead?

[gwenyfhar]

linked.

[kass_rants]

Thank ye kindly. =)

[tattycat]

We've been continuing on business as usual here. Most of our savings are in bonds, and so far the only real blip on the radar has been that my employer is changing insurance companies (rates went up by 25%?!?!)

I'm not sure how good of an economic indicator life funded by a private school is, but there we are.

[kass_rants]

I've never made a study of private schools, but my guess would be that they probably don't respond to economic conditions as quickly as other things. People who want their children to have a private education aren't shopping on price anyway. And one expects that that would make your job fairly secure.

[tattycat]

That's exactly the case. Yes, we're having some budget tightening this year-- they're no longer serving single-size packs of peanut butter in the cafeteria, there's no more cut fruit at meals, and sometimes, when we ask for stuff? They tell us no.

Can I take a moment and tell you how totally bizarro-world this sector is? We're having budget-tightening, which means we only have $115M for an operating budget instead of $120M. At a school of 400 students. Anybody who says the rich don't live differently is just deluded.

[kass_rants]

No kidding, eh!

Oh, to be that different... =)

[belfebe]

I love your articles on economy. You really are a veritable source of information. Thanks!

[kass_rants]

Thank you! When I know something that will help people (especially if it will stop people from worrying), I like to share it.

[mmy_me]

You are brilliant! The main thing, right now, and the thing that makes all the governments lower interest rates and up their savings insurances is:

DON'T PANIC!

As long as we don't panic, it will be ok. If we panic, it won't.

Do you know that our reserve bank offered $200 million in short term loans to our banks to tide them over? They took up $50 mil. It barely made the news... They should have been singing it from the roof tops!

[kass_rants]

No kidding! But I guess it's not as interesting as Paris Hilton using the toilet or something equally "newsworthy".

Our reserve bank has been offering short term loans to our banks for three weeks now, but no one is talking about it. And then the Fed and six European banks coordinated to cut the rate by 1/2 a percent (which is huge). But no one noticed. I'm sure there are some jokes that need to be made about the Presidential debate last night instead.

The Great Depression, the run on the banks, the economy in free fall... It was all caused by panic and a government that staunchly refused to do anything about it. Even if our Congress-asshats won't move, our Federal Reserve Chairman will. And a falling stock market affects very little in the lives of ordinary people. Even for people who are heavily invested in the stock market, they don't lose as long as they don't panic.

Doug Adams had the right idea. "DON'T PANIC" should be tatooed on the inside of people's eyelids!

[mmy_me]

Yeah, one reason to be happy to be living in a little duckpond - over here, people get the news from the US, shrug and go 'yes, but that won't affect us.' And then a little later, a little tentatively, 'will it?'.

I suspect the powers that be are quite happy about that, really.

Not that it will help if your lot panics, of course, but any run on the banks won't start here in all likelihood.

[kass_rants]

Got a spare bedroom? ;)