To the Poor House we go!

Another 200 point drop in the Dow is enough to resuscitate the West Coast Flow. Jesus Christ. We're so royally screwed it's unbelievable. Since September 29, the day Congress failed to pass the bailout, the Dow has dropped 1885.03. I never asked my grandparents about life during the Great Depression, but it appears I'll discover it for myself. The situation is dire and it appears there are no easy answers, but the politicians in Washington have instilled any confidence in the American public that they can solve this crisis. The failure of leadership starting with the President, Treasury Secretary Paulson, Fed Chairman Ben Bernanke and both presidential candidates has been shocking. However, it appears the lions share of the blame lies with the U.S. Congress. Instead of holding their respective noses and voting for a bill that would help keep the credit market afloat, and more importantly, instill confidence in the market, the House Republicans and some Democrats voted against doing what was best for the country. We stand at the brink of economic collapse, yet politicians of both parties put their own electoral prospects ahead of doing the right thing. The folks at FiveThirtyEight.com prove this point. As a result, McDonald's, Caterpiller and other large corporations have either received short term loans with much higher interest rates or been flat out rejected because banks supposedly do not have the cash. Small businesses may have to lay off employees if they don't receive short term loans to cover payroll, forcing the economy into a deep recession.

Despite the broad perception that the credit market is baren, and pundits describing the greatest economic catastrophe in U.S. history, I have not heard anyone declare there is actually NO cash in the credit market. Last week, Citigroup and Wells Fargo tried to acquire Wachovia, JPMorgan swallowed Washington Mutual and Warren Buffet dumped $8 billion (with a B) into Goldman Sachs and General Electric. Think about this...despite the chaos, two of the larger financial institutions in the country had the cash necessary to take over two huge banks and one man propped up two of the greatest institution in America by himself. While it may be tempting to claim the sky is falling and imagine life in a soup line, the system is not broken yet. America and the world needs leadership. Neither Barack Obama nor John McCain have seized the day and offered the kind of direction this tremendous moment requires. With 27 days left in this campaign, I'm not sure we'll get that from either candidate but if our leaders don't step up soon and restore some confidence in the economy, those days my grandparents lived through may become our reality.