Monday, September 29, 2008

Tom's predictions for the rest of 2008 and possibly beyond

Throwing caution to the wind, putting on Mr. Murphy's philosophical glasses, and adding in a bit of my cynical and pessimistic self, I make the following predictions:

1.) If the US Congress passes and President Bush signs any bill to bail out Wall Street, it will be so neutered that it will really amount to nothing. That isn't to say that the original bill that flamed out today on Capital Hill would have spared the country of a financial melt down. It just means that the flames are going to be a little bit bigger and we're all going to feel the heat from this fire. As stressful as my job is, I really like the paycheck that I bring home. It allows me to feed my family. It allows me to pay my mortgage. And it allows me to watch about 30 minutes of cable TV a day, if that. I'm afraid that the Wall Street melt down is going to reverberate on Main Street. And that we could be looking down the equivalent of a 16 inch barrel of the Battleship Missouri, pointed straight at our heads. Are we willing to pull the trigger? Today is sure looks like we are. We are going to cut off your heads so we can spite our bodies.

Am I mad that Wall Street has messed themselves so badly that it is affecting Main Street? Oh man, you better believe your last pair of pink underwear that I'm furious about this mess. I remember thinking to myself when I heard about sub-prime mortgages what the heck were banks thinking when they were loaning money to people who have bad credit histories. What is up with that? And when housing prices were soaring, I was thinking that my kids will never be able to purchase a house of their own. Then the housing bubble popped. And when the housing bubble popped, so did all the sub-prime mortgages. The house of cards started to collapse. And it continues to collapse. The problem is I don't know how big this house of cards really is. Is it done yet? I don't think so. I think its just getting started.

So as much as I absolutely, positively, and totally hate this bail out package for Wall Street, if something doesn't pass, we're going to be toasted. You. Me. And the rest of the country. I hope you have your year supply of food and money. Because if not, you're going to be toasted as well. And I'm not talking just a little brown here. I'm talking black charcoal toast. The kind that my Dad used to call, "Golden brown." The kind that my Mom would scrape the layer of charcoal off the toast so that you could gag down the rest of the toast. The kind that would set off all the smoke alarms in the house. The kind where you could smell the burnt toast for a week after it had been burned. That kind of burnt toast bad. I don't like eating charcoal.

2.) Senator Barack Obama is going to win the presidency on Tuesday, November 4, 2008. I am not a Senator Obama or Senator Biden supporter. Honestly, I'm not all that thrilled about the Senator McCain/Governor Palin ticket either. This presidential election is about the lesser of the two evils. And as much as I would like to see Senator John McCain win, I just don't think it is going to happen. I think there is too much negativism about Republicans and the Republican ticket. And I think the voters are going to take it out on the Republicans this election, and maybe some Democrats. But I just don't see Mr. McCain taking it.

3.) Government bailout - too little, too late. I think that when the emasculated bailout package fails to give the economy the credit bounce the President was looking for, and Main Street starts feeling the heat of the Wall Street melt down, you will then start to see Main Street clamoring, pleading, and begging for a Wall Street bailout package. The problem is that the economy will already be torpedoed, joblessness will be going up, and people will be gun shy about stimulating the economy courtesy of their pocketbook. At that point in time, why even bother to save the economy? Just let it sink and run its course. Let's wipe out any wealth in America. Let the US Government go bankrupt. Let's start over from scratch. The bankers went bankrupt. Might as well let the whole country go as well.

So, what will be the positives of not bailing out Wall Street? Here's Tom's top 10 list:

1.) The price of gasoline will drop. We'll probably end up with gas less than $2/gallon.
2.) Fat Americans will be forced to go on a diet and we'll end up getting into shape.
3.) Over-population in America won't be a problem any more.
4.) Americans will learn to be humble again.
5.) Americans will re-discover God in their lives.
6.) Americans will start to grow their own food.
7.) Americans will go back to hunting and finding their own food.

You know what, I really can't do a top 10 list. I'm sure the price of things will go down. But the economy can end up like the economy of a third-world country like Argentina with hyper-inflation. Or we could go through another depression with the likes of what our parents and grandparents went through in the early 1900s. (I think it will be harder on our generation than our parents and grandparents. Why? Because the majority of the country then were farmers. People were able to take care of the basics. Our economy is so specialized and we are so far removed from farming, that we won't be able to grow our food. All we know how to do is write blogs, spend time surfing on the computer, watching television or playing xBox that we won't be able to take care of ourselves.) Honestly, I don't like either scenario. But I believe that our anger for Wall Street will eventually come back to haunt us. Our economic hardships will humble us. The humility will hopefully bring God back into our country. Citizens will learn to fear God. However, if we fail to become humble, we're going to suffer for a while until we find that humility.

I love this country. I love the people of the USA. I love the freedoms that we all enjoy. I hope that we don't completely destroy our country with our little temper tantrum against Wall Street. We have very little to gain from the deal. But we have everything to loose.

In six months, let's see how these predictions went.

Monday, September 22, 2008

Crazy commodities and financial markets

Wow. What a crazy ride. The market crashes 1,000 points or so last week. Then it gains 800 points. And then today it drops another 300+ points. What is going on?

Well, I'll tell you what's going on. People are freaking out. They are freaking out that all the banks are going to collapse. They are freaking out about all these sub-prime mortgage securities. And honestly, why the banks ever started lending these sub-prime mortgages is beyond me. But they did. And now we have a nice little mess because of it. A $700 billion dollar mess to be exact.

Oil prices have also done a whiplash of sorts. In July, oil topped out at around $147/barrel. The last week or two it has dropped down in the low $90's. Today it went as high as $130/barrel, but dropped back down to about $120/barrel. Oil never should have gone beyond $50 - $70 per barrel. But it did. And you can thank speculators for that.

If you're like me, you're just an average person out there trying to make an honest living. You're probably sick of paying $50 to fill a 13 gallon gas tank. And you've probably noticed that food prices have gone through the roof. Problem is that you food isn't grown where you live (unless you're a granola person and you buy at the local farmer's market). And because it isn't grown locally, it has to be trucked in. The farmers have to spend more money on fuel so that they can harvest their crops. So they have to raise their prices to cover their production costs.

Well, the oil speculators have rained on our parade enough. Now its time to rain on their parade. There is a web site called . It is a great little site. You can send letters to Congress via the site. The US House of Representatives recently passed HR 6604. The Senate has failed to vote on a similar bill. If you are sick of paying the high prices, I suggest you write/email you Senator and put the screws into them. If you have a Senator up for re-election, tell him you'll vote for someone else unless they get off their duffs and do something about this problem. People are hurting. The economy is hurting. Let's get it fixed ASAP.

Wednesday, September 10, 2008

No more car payments!!

Good news! No more car payments!!

Bad news! No more car!

Tom! What happened? Well, my wife and two of my kids were in a hit-and-run car accident. They were going south on I-15 going through a construction zone when an orange construction barrel was in the middle of her lane. She slowed down looking for a way to get out of the lane and then BAM! A vehicle behind her slammed into the back of her. She pulled over and stopped. The vehicle that hit her never stopped.

So we are down to just one car. We haven't been a single car family for at least a dozen years or more. We've decided to take the insurance money and then paying off some bills. So the good news there will be bills taken care of. We'll pick up another small car probably in another six months or so.

UPDATE: We received our insurance settlement check and we just paid off our Astro van. The Astro is now making weird (expensive sounding) noises that really do not sound very good. So all the car payments are GONE! We had some left over cash and we are paying down our other debts. I wish we had more money so we could pay more debts off.