Wallet, Watch, Hell

By Ryan Morgan

Right now, banks are running out of money, people are losing their jobs, cities are shutting down their mass-transit systems, CEOs are committing suicide, individuals are stealing billions of dollars, and we are currently involved in two wars far far away from home. What in the hell is going on and what can we the people do to change it?

To sum up what began this whirlpool of destruction we must go back in time. A couple years ago people were buying bling bling left and right. For gosh sakes peoples’ dogs were covered in ice. Consumer confidence (you, the peoples’ confidence in spending your money and receiving a quality product) was so high, and returns on investments were stable, that spending was out of control: which occurs during a booming economy. Basically, people were making money and people were spending money, and a lot of it. Take that and the idea that Real Estate never depreciates in value and we have the perfect formula for a disaster. People were pulling out mortgages for a lot of money to buy houses that they would in a year or two sell for an ‘immense’ profit; and banks were throwing them the money to do so. Well, when people couldn’t sell their house, and they had spent all their money on pimping their car, they weren’t able to pay the banks the money and interest back.

Now banks would have been the only ones to be effected by this if they hadn’t already sold these mortgages to worldwide investors in the form of a CDO; so now billions of dollars invested in the Real Estate sector began to lose money. [insert eastern wind] Once the investors began to see their portfolios lose value, they demanded answers, and the banks were put in a tight spot. Banks had to figure out a way to get the money passed to the investors without spending all of its money and without losing value in its stocks. [insert western wind] Banks now had a problem on their hands because they could no longer hand out loans on a small level let alone on a big one.

When banks can’t lend money, businesses struggle to expand, and when that happens we have an economic stall. {1} Businesses can’t grow and bring the extra profit they promised their shareholders so they must start cutting costs so their value doesn’t degrade. Yep, this means people lose jobs, leading to people not receiving money, which in turn means they can’t spend money. [insert eerie music] These people were the ones who also owed a lot of money to the banks for the new homes they just bought…. Well, now that people are being squeezed for every last cent, they begin to stop spending altogether and save. This means that the consumer goods industry that was swimming in cash a few years ago is now closing the stores that can’t even breakeven. [insert cow flying across field]. That’s right folks, since this began its only been a hole dug deeper and deeper.

How do we rise out of this cesspit? If I knew the answer I’d be working for a consulting firm, so here’s my opinion: those of you who have money to spend, from things as small as toilet paper to underwear to kitchen appliances, know exactly what you are doing and who you are giving your money too. These hard times are going to test every business. The companies who actually produce quality products for a reasonable price and are morally astute, to me, seem the ones who deserve my business. No more Wal-Mart, no more McDonald’s. Think of your dollar as a investment and every time you go to family owned store you are investing in their business: helping them supply jobs, supply taxes, and supply the product you are purchasing.

In the end its going to take a lot of elbow grease to wedge our way out of this depression, but attempting an optimistic view for now is a start. GO! Spend Money! But do it wisely and selflessly. If you want to know more about what I am talking about, an explanation, or a question about people such as Madoff or what exactly a CDO is, please feel free to email me anytime and I would be happy to get back to you: rymorgan@gmail.com. Thank you and stay funky.