You know shit is about to get worse when rich folks are losing their money.
In case you didn't notice -- Monday the Dow Jones dropped by more than 500 points.
In the scheme of how the markets fluctuate regularly, the affects of this probably won't resonate with most of us, but the overall volatility of the markets in 2008 should be of our concern.
While some may not care if a bunch of hedge fund managers bite the big one, seeing 100 years plus institutions like Lehman Brothers file for chapter 11 and seeing the Death Star of banking, Bank of America Corp.*, swoop in to buy the relics Merrill Lynch & Co. and Countrywide makes you a tad concerned.
Everyone on CNBC (with the exception of that screaming dude with the sound effects, Jim Cramer) is telling folks to stay calm. CNN's finance people are telling you to stay calm. The Federal Reserve Chairman Ben Bernanke and President Bush are telling you to be calm. But pardon moi, I don't feel calm.
When you look at the long list of other banks and investment houses in disarray you do the math and realize, The Evil Banking Empire of Bank of America can't and won't buy all these people out and take on their massive debt. Secondly, the government can't bail all of them out. If Washington Mutual and Citigroup don't find ways to raise cash or be absorbed by a larger institution they'll be going down hard too.
Then there was the government swooping in to save Fannie Mae and Freddie Mac. While I found the government saving the quickly crashing Bear Sterns to be suspect, if Fannie and Freddie were allowed to fail it would be catastrophic due to the sheer number of mortgages they are sitting on.
Anyone want the value of their house to drop like a rock? Let Fannie and Freddie collapse under their massive debt. Enjoy the insta-housing depression leading to a possible, actual depression.
And now there's the fate of American International Group, Inc. -- better known as AIG -- today's financial enfant terrible.
NEW YORK (AP) -- Stocks fluctuated Tuesday following a report that the government is considering extending aid to troubled insurer American International Group Inc. - the latest in a string of companies that investors worry could be undone by a shortage of cash.
A partial recovery in several other financial companies helped the sector show signs of life a day after leading Wall Street to its worst session in years. Investors also grew hopeful about a Federal Reserve interest rate cut.
Worries about AIG's well-being intensified Monday and early Tuesday after several ratings agencies downgraded the company. Lower ratings can add to the amount of money the already cash-strapped company has to set aside. Investors fear that a failure by the world's largest insurer would touch off a wave of financial turmoil.
Crazy Jim Cramer has proclaimed that AIG "is too big fail."
Cramer urged both the company and Washington to take the actions necessary to save the firm.
“This would be a tragedy if they just let this company fail,” he said.
“I would radically have to change my view about where the market’s going to go if AIG failed,” Cramer continued, “because it’s so unquantifiable what they have.”
The rest of the story isn't much prettier.
(A) CNBC report said the government is at least discussing extending a financial lifeline to the company; it cautioned that an agreement is far from certain and also that the company isn't likely to find help from the private sector. AIG fell $2.07, or 43 percent, to $2.69 after being down nearly 75 percent in earlier trading.
Add to that to Goldman Sachs Group Inc., the largest independent investment bank on Wall Street posting its biggest slash in earnings since becoming a publicly traded company in 1999. Their quarterly earnings fell to 70 percent from last year. Dell is having its own slowdown and money woes. Hewlett-Packard is laying off eight percent of its work force, 24,600 people.
Being a journalist I felt the great media holocaust of print reporters two years ago when numerous newspapers began round after round of buy-outs and lay-offs. Old friends of mine who've worked as reporters and editors for years are starting over from scratch. I wonder if my old newspaper, The Bakersfield Californian, will be able to stay a locally-owned, family-owned newspaper in this environment. For years larger newspaper conglomerates have wanted to purchase it but it's still owned by family matriarch, Virginia "Ginger" Moorhouse.
Nice woman. Had the uncanny ability to remember everyone's names even if you just started that day.
But with the lay-offs, the banks collapsing and Bank of America becoming ever corpulent, I think the only good thing that came out of the Dow drop was it got everyone to stop talking about Republican vice presidential candidate Sarah Palin. It was like she never existed. Other than short pieces on Tina Fey's marvelous portrayal of her on Saturday Night Life, and a brief discussion of her campaigning without the Mac man, CNN was packed with "Holy shit! What's happening to the economy?" and footage of the devastation Hurricane Ike left behind in a destroyed Galveston and the flooding it has caused in Missouri because Ike remnants decided to dump a surprisingly large amount of rain on us, giving more meaning to the term when it rains it pours.
Car plants have slowed down and shut down in the greater St. Louis area. My own inability to land a job -- any job -- despite my abilities is bordering on tragic. But at least the media is talking about the economy again. Not lipstick on pigs or personality cults. They're finally examining and discussing the economic policies of both candidates and I welcome that debate. I want to know what they think about free markets and protectionist policies, fairness for workers, jobs going overseas, the global economy and the weakening dollar, about regulation and what the government can and cannot do to solve this crisis.
The Fed is rushing $70 billion in cash into the markets as a stop-gap, anything to stop or slow this slide into financial meltdown. But how many times can the government do this? And where is the money coming from with our many entitlement programs, two wars and other obligations?
A debt is going to come calling someday, demanding to be paid. I don't know who's going to pick up that bill, but whoever gets stuck with it is going to be none-too-pleased.
When I would go to the "Dirty" Walmart in St. Louis (if you're from North St. Louis County you know which one and it rhymes with Best Clorrisant) I would always joke "We don't hire cleaning services and pass the savings on to you!" Which just had to be true. That Walmart was just filthy. Nothing like the giant, mega Super Walmart in the "nice" part of St. Louis County. But then even that Walmart started to get a little "Walmarty," with the empty, unstocked shelves, the clutter, the old merchandise, that general "What a dump" feeling I have about most Walmarts, compared to a "Dirty" Target store, which is just being a filthy hipster Target and is dirty "ironically" as Targets ARE NOT supposed to be dirty.
Danielle Belton | 
