Dec 04 2010

Hubris, Ignorance, Goldman and the Fed – with some good advice in the end

Published by at 2:17 pm under Debt and Credit,Global Economy,Investing

“None of them would have survived without government help.”  – Timothy Geithner, Treasury Secretary

 

Last week the Federal Reserve released detailed information on the steps they took to stabilize the financial markets during the uber tense period from early 2008 through 2010.  Most of us were quite surprised to learn of the magnitude and frequency of intervention.  Although some will never completely agree, it was quite clear to me that we were truly on the edge of the abyss and without the Fed’s intervention there would have been a complete wipeout.

 

To add to the intrigue, my favorite system manipulator, Goldman Sachs – which once suggested it had plenty of cash to weather the storm – borrowed 84 times during the crisis window and more than $20 billion on at least one occasion.  I could add a few comments on this but I will take the high road at this time.  One thing you can say about Goldman, they know how to create their own destiny.

 

Shortly after this broke, the U.S. jobs report came out with dismal November job growth – so poor compared to other more encouraging indicators that many are questioning whether the report is accurate.  Regardless of what job growth actually is, while most of the key economies around the world have stabilized, there are still many potholes in the road to Shangri-La.  All you have to do is consider, Greece, Spain, Portugal and Ireland.

 

Since this blog is supposed to be about prudent personal finance and the global economy, my suggestion as we hopefully enjoy the 2010 holiday season, is to keep your job if you have one, find a job if you don’t and in both cases avoid excessive debt and save every dollar (or pound, yen, rupee, euro, etc.) you can.  There are and always will be investments worth pursuing but be very cautious unless you have adequate liquid to cover any possible losses.  Cheers and All the Best during this special time of the year!

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