The financial news is dismal right now, and it doesn’t look like it is going to improve any time soon. Friday’s Dow saw a dramatic drop of 660 points, and the European and Asian markets also took a nosedive in early trading.
Banks around the world are in trouble, and Britain is threatening legal action against Icelandic banks to insure that British subjects can get their deposits back. This after Iceland nationalized their banking system in an attempt to keep the banks afloat.
When I read that item on CNN News, I couldn’t help but think of George Bailey and the Bailey Saving’s and Loan from the movie, It’s a Wonderful Life. Despite George’s plea that people not panic and draw their money out, there was a run on the Savings and Loan during the Great Depression. Luckily George had enough cash on hand to pay a percentage of everyone’s deposit, so people got some of their money, and the Savings and Loan survived.
Today, another George is asking people not to panic. President Bush spoke at a news conference this morning and appealed to the American people to stay calm. He said fear and anxiety only make the financial crisis worse. “Here’s what the American people need to know: The U.S. government is acting, and we will continue to act, to resolve this crisis and return stability to our markets,” he said.
Our natural instinct to protect our interests and take care of ourselves, but this is a time when we all need to think about the long term. If we all panic and take our money out of banks and other financial institutions, there will be a depression. That’s a given. That’s what started the avalanche that became the Great Depression, and that’s what can bury us now.
So I am asking everyone to take a deep breath and ride this one out.
I’m also asking if we can just have a week off with no trading, no futures speculation, and no lending. It seems to me that with everything in such a state of flux, taking a break just might help settle some things down.
Just a thought.