The Sky Is Falling. The World is Coming To An End! NOT!

Congress told us that if they didn’t do something to buy up the bad debt that Wall Street has taken on, that the markets will fail. It was a bailout that the politicians tried to frame now as a “rescue package.” No matter what you call it, it includes the spending of money that the government (you know, the government that is great about spending our hard earned money) doesn’t have.   

View the full .DJIA chart at Wikinvest

The bill passed just over 1 week ago and since then, the Dow Jones Industrial Average has dropped 2,000 points. That is not far from 20%.

Now, the same politicians that promised a failure if they didn’t do anything are saying that the market will take time to adjust.

Duh… it would have taken time to adjust if they didn’t do anything.

Every where you turn you will hear people talking about how bad everything is. People just can’t cope because, after all, the world is in a credit freeze (yet I received 5 pre-approved credit offers this week.) Energy is a problem because the cost of oil is so high (yet, prices there have dropped as well… wonder if we’ll ever really see that reflected at the pump.)

We have people defaulting on their mortgage (most likely because they should never have qualified in the first place.) We have home values dropping (I know, I have two homes). We have retirement plans going away (I know, mine lost 16%… but it is a long term investment, so… so what?).

Wired.com has 10 Depressing Facts on the Market Free Fall. Here they are:

1. The Dow has lost about 2,000 points since a $700 billion bailout package was signed into law Oct 3.
2. The Dow closed at its 52-week high (14,198.10) exactly one year ago today. [Oct 9]
3. The Dow hit is 52-week low today (8,579.19).  [Oct 9]
4. The Dow closed below 8,600 for the first time since May 2003.
5. Today saw the largest intraday point swing in Dow history: 868.95 points. The second largest was three days ago: 797.44, when the Dow closed down by 369.88.
6. The largest one-day Dow point drop was 11 days ago: 777.68.
7. On the first day of trading after the Sept. 11, 2001 attacks the Dow lost 684 points (7.13 percent) -- roughly the same as today.
8. Today's percentage loss for the Dow -- 7.33 percent -- is the 11th largest ever. The largest percent change for the Dow occurred on Oct. 19, 1987 (22.61 percent), a loss of 508 points. On Oct. 28 and 29th, 1929 -- the crash which precipitated the Great Depression -- the Dow lost nearly 25 percent in two days.
9. Eleven of the Dow's 20 worst percentage losses have occurred in September and October.
10. Before today's rout, government estimates put the loss to retirement savings at $2 trillion in the last 15 months.

(Source: Wired.com)

I don’t dispute the facts. I dispute the real impact on us… the average working American. What people seem to forget is that the economy is based on consumer confidence just as much as on the actual flow of money. When consumers think everything is bad, it becomes a self-fulfilling prophesy. Every time the media and politicians point out that the sky is falling, the sky starts to fall a little more. The Dow Jones Industrial Average is more an indicator of consumer confidence that of real market conditions. Companies who have stock in public trading can be profitable today but be losing value on stock if there is enough doubt of future success.

Over simplified? Maybe, but us normal people need something more simple than financial mumbo-jumbo.

Barack Obama and John McCain both claim to have warned everyone about Freddie Mac and Fannie Mae. They both claim to have warned about subprime mortgages. But, they didn’t get it done. They didn’t do anything to prevent it. Intentions mean nothing if the job doesn’t get done.

The reality is that they (nor Bush) really could have done anything except stop bragging about home ownership being at an all time high.

In the end, it doesn’t matter what Obama and McCain did or didn’t do. It matters what we do now.

Not every business is down. Not everyone is hurting. Now is the time to buy… there are a lot of great deals out there. I wish I had more cash, because I would love to start buying real estate. I would love to start buying stocks.

The challenges will pass. They will take much longer to pass if we continue to have a woe-is-us attitude. We will continue to struggle if we continue to play the part of the victim.

It is time to stop complaining. It is time to stop whining. It is time to stop acting like the world is coming to an end.

It is time to start looking to the future as something positive. It is time to start considering that there are more opportunities than not. It is time to go out and make a real difference.

The government isn’t going to save us. We are going to save us.