Posted by
Jay Adler Comment on Thursday, September 18, 2008 2:33:28 AM
September 18, 2008
Ever since I got married I never had any cash but plenty of stock playing ability which runs in my family. I retired at 56 so here's my take about what John McCain's much criticized statement when Wall Street had another bad day and Obama blamed him for it really alluded to. I'll will take the position that John McCain s disposition was absolutely on the mark point by point.
1. The unemployment number in the US is a little past 6%, slightly elevated but nothing to indicate the terrible Depression that is off in the stratosphere, and that some man in the street interviews unknowingly spoke of on the networks.
2. Interest rates are historically low,certainly supporting McCain's statement
3.The Federal Reserve, which just recently showed an inclination to jump in, held steady a few days ago which shows their belief that this is another cyclical recession, maybe, but certainly no one human being or administrative policy in Washington can cure most components of these events. We all have been through these periods before but now that we have outsourced our jobs and become a service economy, these are two of the culprits.
4. When I started working for local government and began my 403B, the Dow was at 700 in 1991. We have had 500 point drops in
1987 and I believe 1998 and scores of 200 and 300 drops. Corrections are sometimes are healthy and give intuitive stock players a chance to buy low and years later go down to Bimini for good.
The debacle was not a stock market thing, the market does not desire uncertainty such as Obama being our next President. The only problem is AIG although people not familiar with Wall Street blew this up into being a run on the banks. AIG apparently had to be bailed out which may amount to 85 billion. That is a separate and unrelated issue to the other mergers and buyouts. I am now with Merrill Lynch for 20 years and our life savings are situated with my excellent financial advisor who from the beginning has been nothing more than a valued friend and practically a member of my own family. When I heard about Bank America buying them,I finished eating breakfast, called my friends at Merrill and simply told them that we will now have a stronger concern with our new owner but if my broker is not there I won't be a client either.
So the bottom line is that John McCain was only referring to the fundamentals or underpinnings of the economy, not the housing crisis, the credit crunch or any other attendant issues so he was right. Obama played the blame game and was wrong on every point. Take this advice, if you watch CNBC or Fox Financial or Bloomberg for one hour a day forever and you are shrewd enough, you can do anything with finances today and forever more.
Jay R