That’s a good image - alligators in a swamp. Might be a good one for all of us to keep in mind when daring to invest.

Sounds like a good description of what’s going on, doesn’t it? The excerpt is from The Risk That Won’t Go Away, a March 7, 1994 article in Fortune. It’s on the web at http://money.cnn.com/2008/09/25/magazines/fortune/loomis_swamp.fortune/index.htm

Its not as if we hadn’t been warned. Not that we had any say in the matter. I remember reading (skimming, actually!) this article then…and shuddering.

“Like alligators in a swamp, derivatives lurk in the global economy. Even the CEOs of companies that use them don’t understand them.”
—Carol J. Loomis

Have a stout heart….

Jean Browman–Cheerful Monks last blog post..What I Learned From Being Tortured By a Dentist

But there’s a couple of things I will say about, though:

1. It ain’t as bad as the what you hear in the Main Stream Media. I’ll tell ya; if you listen to these guys, it’s like the end of the world as we know it. You have to remember these guys need to sell newpapers and advertising, so the more sensational the headlines, the better it is for them. If you’re going to investigate the issue, please bear that in mind.

2. The ultimate root cause is greed, yes. But it’s not just some “faceless fat cats”; believe me, there ’s plenty of it to go around. Sadly, it is finally starting to come out that warnings about this were made as far back as the Clinton administration, but ignored. Not that I’m blaming Dems or Repubs; as I said, there’s plenty of blame to go around.

3. Part of the problem is the misplaced understanding of “rights”. Since when did it become a “right” to own a house? Sure, we can if we can afford it, but I don’t recall that being one of those “inalienable rights” they mentioned in our Constitution.

There’s probably an endless stream of discussion here, but in the meantime, I thank y’all from the bottom of my heart for joining me in the sandbox this week; a big tip o’ the hat to ya! And if you have more to add, by all means keep ‘em comin’!

Ulla Hennigs last blog post..The Colours of Autumn

@Brad Shorr - I agree that there are going to be some pain coming from this, but in the end it might be a good thing. Mr. Market has been obese for many years. Now that he has been diagnosed with diabetes, he has motivation to start eating right and losing weight. Unfortunately, healthy food does not taste as good, and I am not sure he will start eating right. In which case, all of this really will be a loss. In the mean-time cheer up and enjoy the lower gas price.

@Rick Mahn - Main stream media (MSM) is primarily an entertainment industry. They have to provide entertaining content in order to sell ads which they have to sell to cover the high cost of wide distribution. They cannot afford to do anything but entertain. That is why blogs are so important. Many experts are online explaining how we got into this and how to get out. They are not as easy to find as Channel 5, but they can be found. The most powerful impact of the web is that we have easy access to millions of people who are too smart and too brutally honest to be published or broadcast by the entertainment industry.

@Karen Swim - We have to look a little further back than the airline bailout before deciding that putting more cash in the system will not help. I do agree that the mortgage buyout will other problems in the long run, but money spent in the right places really has helped many times in the past. The trick is to determine the right amount and the right place.

@Laurie Slade - I love the John Muir quote. Thanks for sharing. (MZM, you missed a spelling error in that quote - only mentioned cause it took me a second to figure out what Muir was saying)

@Jean Browman - There have been signs of an impending earthquake for at least 10 years. I thought we were in for it in 2000-2001 and again in 2004. We might end up just delaying it again, but eventually the DJIA needs to get back down to 8,000 or the inflation adjusted equivalent.

@William - Actually they did not seem to be good ideas to everyone at the time, but alas, the majority is generally wrong. But, cheer up, we still have a long way to go before you have less food on your table than the other 80% of the world population. We are still blessed far beyond what we deserve. A lot of really great things could come out of this, including the possibility of Americans becoming a little more sympathetic.

@Karen Putz - Debt is a very important part of making the economy work. As a matter of fact each dollar bill is a piece of government debt. I think people forget that the only way for the government to pay all of its debt is to remove all the money from the economy. We do need to spend less on consumer items, but need to continue or even increase our spending on things that help us make more money. The crises of the Great Depression is that people were too scared to invest in their own or others businesses and farms. So we need to keep spending we just need to be smart about what we buy.

@Luke Gedeon - Wow, you really killed the conversation. That or you were so late to the party that everyone had already left and so Robert had to restart the conversation on a new post. How ’bout you just be quiet this time so people can enjoy the conversation.

By the way, where did you got the picture, Robert? It seems a little bit familiar to me here…