PANIC or Not – Your Choice

It’s time to panic…The market is down a thousand points, people in the financial business are jumping out of windows, banks are failing right and left, the government is bailing as fast as it can but the hurrier we go, the behinder we get. 401Ks are in the tank, jobless rate is going up, OMG its going to be a depression and there is no way out. And of course congress is blaming everyone except themselves for the mess.

I went out this morning and the sun was shining. The car started, there were people eating in the deli where I often get breakfast. Street repair was continuing, I was in a shop that was looking for help. They told me that their year wasn’t better than last year, but at least as good. They were holding their own.

I was at the Canadian Parking Association this past weekend and the NPA a couple of weeks ago and spoke to a large number of vendors in the parking industry. EVERY ONE told me that this has been one of the best years they have ever had, not only here in the US, but worldwide. I know a consulting firm that can’t hire enough people to cover the business they have. What the hell is going on?

I think I know. Phil Gramm was right. This is an emotionally induced financial panic.

I know, I know – car sales are in the crapper…layoffs are happening everywhere, and the housing market – don’t even talk about that.

But who do you know that has lost their job, you personally? How is YOUR company doing, particularly considering the financial panic that must be gripping the nation (after all, the Main Stream Drive By Media says it’s so.)

I ain’t happy that my stock plan is down 20%, but fortunately I don’t have a lot of money in it. However, my experience, having lived through at least three of these types of events in the past 40 years, is that it always comes back. Housing prices come back, the market comes back. The world isn’t coming to an end. Its just resetting a bit. Trust me.

There are some bright spots. Oil prices are plummeting. ($90 a barrel today), the Dollar is greatly increasing in value (It takes $1.75 to make a British pound – it took $2 just two months ago $1.35 to buy a Euro, down from over $1.50 in the same period) and the fed is has turned on the tap on the money supply. Some economists think that this will be the beginning to the next bull market. There is one other thing.

I have a place (condo) in the epicenter of the housing default market, the California Inland Empire. A number of condos in our complex have returned to the bank and prices have plummeted, as much as 35-40%. Fair enough. However the other day I was told that there were five offers on the condo two doors away from us. It was an auction and the owner felt he was going to get 25% over his asking price. Andy is selling his condo (needs more office space) and he had 40 people at his open house on Sunday. Something is happening out there. Units are being bought, and prices seem to be bottoming out. This is from personal observation, not listening to “experts” who have an ax of some type to grind.

Based on history and America’s ability to rebound, I can be but optimistic. Just look at how YOU are affected TODAY. Look around you. Food is still on the shelves, electricity is flowing – the planes I was on this past week were full. Something must be working. And I’ll bet that within a year, or less, your stocks will be back where they were in October of last year. Of course if you panicked and sold, well then…Cash is good, too.

I’ll revisit this on November 15. I’ll bet that no matter who wins, the market will be back, and all will be right with the world – at least according to the MSM.

You read it here first.

JVH