The Economic Meltdown

What happened in the financial markets this year is just unbelievable. It is very hard to fathom how so many of the so-called experts would let a house be built on such a weak foundation. To see institutions that have been in business and were considered the backbone of the world economy crumble in this fashion has probably made everyone nervous about these markets. I find it incredible that so much was put at risk based on an appreciating housing market.

I can’t even begin to understand the sorrow of those who bet their life’s savings into this market only to find a sizable fraction of it disappear just like that and they just couldn’t do anything about it. Sensible investment guidelines indicate that one should be in the market for the long run. However, what about those who are close to retirement or those who are contemplating big purchases based on their savings? All of those plans have probably been put on hold.

Everyone looks to blame someone or the other whenever there is a debacle. I have heard everyone being blamed, all the way from the CEOs of some of these companies down to the buyers and borrowers of these complex securities and attractive mortgages. In my personal opinion, more of the blame lies with the institutions that created there securities and the lenders who created some of these mortgage instruments. It is unethical to try to sell something to a consumer if the seller is not sure or has not thought through the product. All these instruments were based on assumptions that have historically not been true.
I don’t know what will happen to the market over the long run. I am sure that it will bounce back on the strength of all the hard working people who are eventually responsible for the success of the market. However, I have decided to change things based on some of the most difficult lessons that I have learned.