A friend mentioned today that he lost a quarter-million dollars in one day, yesterday, not a rich person either. It was "on paper" and he'll likely regain most of the losses, but something like that is still a shock to the system.
I was in my favorite auto dealership today (yes, I have one of those) and talked briefly to the owner. He sells the vehicles that seem crisis proof, but the spring was gone from his step and there was little confidence in his words. CNN blared financially tinged stories from Hi-Def TV's and there were precious few folks slamming doors and kicking tires.
When you don't have the money to pay your bills; when the job is shaky and the pressure mounts, that's when worry becomes panic and the sun just stops shining.
This just might be one of those cases where the "good ole days" were in fact a lot better. My parents had several things they deemed unacceptable. You don't cheat, you hold your liquor, you pay your bills, you go to work every day and church every week. Failures in these basic adult responsibilities meant losing. The whispering in the kitchen contained words like divorce, unemployed, alcoholic, dead beat, prison and the over-the-top word, bankruptcy.
Here's what I know about those taboos from Mary and Al's day: I did just about everything wrong. They always wanted my world to be better than there's and in some ways it is. But among things that count I still have to learn the hard way. When the folks were alive and had savings, my hard-headed lessons often ended in dad bailing me out. Can't count how many times that happened. They didn't like it, but they still loved me.
Now some of the largest financial institutions outside of commercial banks are facing bankruptcy. When that happens to an individual or company the next step is to seek protection; that can only come from federal bankruptcy laws. That means a plan is put in place whereby the debtor can pay back the secured debts in a timely fashion, normally within five years, or sell what they cannot pay for. The non-secured debt takes a back seat. There is also the type of bankruptcy where all debts are forgiven and all real property is essentially forfeited.
Again, this is the purview of the federal courts. Of course some in government want to become daddy to these companies. It is very hard for most people to understand exactly what's happening; not when more than 30% of the homes in America don't have a mortgage - they are owned outright - and of those with mortgages more than 96% are doing fine. That leaves an ugly 4%, not a large number, but nothing to sneeze it.
When my dad bailed me out of money trouble I'm not sure I leaned anything. If the government bails out these companies what's to stop them from making the same mistakes? Remember Jaws II? The table is littered with underwater photos and the village fathers refuse to see the truth, but Police Chief Martin Brody knew better. "I've seen a shark up close, I know what one looks like and I'm not going through that hell again!"
Words to live by.
