Friday, August 5, 2011

Well, here it is--Friday again. The first Friday of August. Hope you all have a very nice day. We expect another in the low 80s which means no air conditioning needed again. Tomorrow and Sunday may be a different matter with the predictions for mid to high 80s. It really depends on the humidity. It is time to take out my sunflowers. I have a nice pot of yellow mums to put in their place. I also want to transplant a couple of pots of petunia from the bunches in the large containers that are either too crowded or in too shady a spot to be happy. I also have to start on another round of herb harvesting. I know, I know--I have been threatening that for the last week.

The lead story for the Good Morning America news this morning is the huge sell off on the markets round the world. They all seem so surprised as did the CNBC talking heads yesterday. We look at this and wonder why they are so surprised. Everybody has suddenly realized that there are other concerns in this global economy besides the U.S. debt limit debacle. I think most of those people have a very short term memory, a very limited attention span, and a very effective set of blinders restricting their vision to one thing at a time. One of the reporters just made my point for me--there was nothing new to really drive the selling. We have known about the European sovereign debt problem. For those of us with a longer memory the term PIIGS once stood for Portugal, Ireland, Italy, Greece, and Spain. All of this has been on the horizon for the last three years (or possibly longer.) Another commented that the notion going around that the U.S. is headed for either a double dip recession or an new recession leaves a lot of people wondering when the original recession ended. That is the beauty of statistic--the numbers can obscure as much (or more) than they reveal.

I read this Guardian article yesterday but didn't link to it then. Greek banks have experienced a 'silent' run. No long lines of desperate people struggling to get in and demand their deposits in cash. Instead just an increasing number of desperate individuals withdrawing their money hoping to find a safe place for it somewhere, anywhere. I was reminded of it this morning during the news segment I discussed above. One of the investors interviewed said he was withdrawing from the bond and stock markets, and putting his cash in the bank. At least it would be insured and he would get a minimal couple of percent interest for it. My thought--hope he isn't depending of the FDIC which depends on the 'full faith and credit of the United States.' Depending on how much a depositor has the full amount may not be covered. And if we have a serious depression will the government have either the wherewithal or the will to meet that commitment?

1 comment:

Kay Dennison said...

Probably not. I think one's mattress is prolly the best place for one's money.