I loved roller coaster rides when I was a kid; not so much as I’ve grown older. What is the expression? Ah, yes, I just don’t have the stomach for it anymore.
Well, we’ve been on one helluva roller coaster ride in the last few weeks, haven’t we? You know, it’s one thing to go to Coney Island, say, and fork over your dough to the ticket concessionaire, all the while knowing what you’re getting into and doing it voluntarily.
But it’s quite another to be forced onto the ride whether you want to go or not. And that’s been the situation for most of us, I believe.
When we talk about roller coasters, what we really mean is that first big drop that feels like a free fall–the rest is just getting banged around. For all those financial institutions that have been dropping like flies lately it must have seemed like their roller coaster was nothing but first big drops, over and over and over again until the car comes to a halt and voila! they find they’ve been transported to a different world where nothing is like it was. That’s what happens when your stock goes into free fall.
It kept reminding me of those frames you see in silent movies where the heroine or hero, as the case may be, is jumping from one ice floe to the next as the river madly rushes on. Then the next frame pans to the waterfall that is coming up within seconds as one floe after another goes over and crashes to the bottom.
Just count the list of companies (floes) that have gone over, in most cases so quickly that it was almost as if they never saw the waterfall coming. Lehman, AIG, Fannie Mae, Freddie Mac, Washington Mutual, Wachovia Corp., Merrill Lynch, Bear Stearns.
Unfortunately, the stock of many of these same companies was parked in millions of retirement accounts like 401(k) plans and when they went over the falls they took a lot of investors’ retirement hopes and dreams with them.
If you made the mistake of looking at your 401(k) account balance the day after the Dow dropped 778 points, as I did, you probably thought you were having an out of body experience because you’d never had anything quite so financially surreal hit you before. This can’t be happening to me!
This panic was caused in large part by the lack of air created by the vacuum of (so-called) leadership in the executive and legislative branches.
From the Bush administration, the bailout rollout was done with its customary ham-handedness and breathtaking hubris. We need $700 billion. We need it yesterday. We will have no restraints or oversight on how we spend it. We will answer to no one.
Hasn’t anyone read ‘The Boy who Cried Wolf’?
And let’s not forget the solons on Capitol Hill. All of a sudden, it seems, they decided they had to listen to their constituents, thousands upon thousands of whom were mad as hell about the bailout rewarding Wall Street recklessness and let their congressmen know it. Never mind that this was the time for standing up to enraged ignorance–however rabidly expressed–and doing what was right for the country.
I was no happier than anyone else about getting Wall Street off the hook after its excesses. But this was bigger than Wall Street and congressmen should have known it–and acted responsibly.
I’m writing this before the second go-round of the new and improved bailout came to a vote in the Senate. Let’s hope the sweetened package will pass the upper chamber and then make its way to and through the House. Let’s hope calm ensues.
Roller coaster fatigue is taking its toll. I want to get on another ride.