The 2008 Financial Meltdown - An Unimagined Crisis

By
Real Estate Agent with Windermere Real Estate - Palm Springs CalBRE# 01339266

The euphemistically termed "meltdown" in the financial world is really a crisis of enormous proportions.

"The world's central banks launched a large coordinated attack against the widening global financial crisis, lowering short-term interest rates in unison. The emergency action, which involved the Fed, the European Central Bank, the Bank of England and others, is a sign that fears that the financial crisis could cripple the global economy are spreading rapidly" - Wall Street Journal

"Fed Can't Stop the Bleeding. Global Markets Remain Strained" - Fox News

"The US treasury secretary has warned some banks will still fail despite the $700bn government rescue package to shore up the financial system. The UK government has announced a package of measures aimed at rescuing the banking system that makes available £400bn ($692bn) of fresh money - BBC News

"Fed can't save stocks. Wall Street ends a volatile session with losses as investors welcome emergency rate cut but remain wary" - CNN News

"Market turmoil continues despite rates cut.  IMF says global economy faces a painful recovery"  - France 24 International News

"China cuts rates to ward off slowdown. IMF: World economy to slow sharply, led by US" - China Daily

"Economic Crisis will not be televised. Elite Nightclubs Empty as Crisis Hits Oligarchs" - The Moscow Times

"Blame bad rules, not capitalism" - The Jerusalem Post

These were the headlines splashed across the internet on October 8, 2008.

The harsh reality is that despite concerted and co-ordinated efforts by governments around the world to stabilize the situation, confidence in the global financial system has been smashed. I think it's time for everyone to take a step back from the clear panic in the stock markets, take cognisense that the credit markets do not respond overnight, and give the system a chance to respond to the drastic measures taken by governments around the world.

Remember: "This too shall pass."

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
ActiveRain Community
Location:
California Los Angeles County West Hollywood
Groups:
Blatant Politics
Investors
LA Connection
Politics And Real Estate
Realtors®
Tags:
finance
economy
mortgage crisis
interest rates
global economy

Spam prevention
Show All Comments
Rainer
129,777
Rich Dansereau
Positive Real Estate Professionals - Knoxville, TN

I think that your advice to take a step back and try not to succumb to a panic that is fed by fear is really important. Not succumbing to fear means that the ability to stand back and asses a situation and a way forward is possible. Fear and panic obscure all paths.

Oct 09, 2008 02:08 PM #1
Rainmaker
477,134
Palm Springs Realtor Stewart Penn
Windermere Real Estate - Palm Springs - Palm Springs, CA
Windermere Real Estate - Associate Broker

2004: "Not only have individual financial institutions become less vulnerable to shocks from underlying risk factors, but also the financial system as a whole has become more resilient." - Alan Greenspan (Federal Reserve Chairman 1987-2006)

It's clear that no-one, not even the so-called experts, know with any certainty how financial markets will react to news. Today's huge drop in the Dow, S&P and NASDAQ is contrary to what was expected after the release of news that world governments had worked in unison to lower interest rates.

Oct 09, 2008 03:40 PM #2
Rainer
33,213
Jay Allen
MovieVoice Production Co. - Paducah, KY
MovieVoice

Thank goodness McCain suspended his campaign a couple of weeks ago to fix our economy. If we had a dollar for every time this man has stated that he reached across the aisle, we could pay the national debt.

Oct 09, 2008 03:55 PM #3
Rainer
73,665
Sabrina Kelley
ERA The Herman Group - Woodland Park, CO
Pikes Peak Region Realtor, Teller, Park and El Paso County Colorado

Fear is the factor that we can't give into. Now is the time to seek out and find the investors that want the security of their investments in real estate.

Oct 09, 2008 04:19 PM #4
Rainer
16,112
Carl Ostenson
Ostenson Insurance Group - Des Plaines, IL

Would have been nice to be short the past few days. Things go down alot quicker than they go up.

Oct 09, 2008 11:11 PM #6
Rainer
2,045
Lynne Salta
ReMax Right Choice - Trumbull, CT

I thought you did a great job in capturing the market sentiment in your quotes. I do believe that "this too shall pass." I also agree that fear and panic are contributory in the downward spiral. I'm just having a heck of a time trying to put this mess into a time frame. I keep coming back to that conservative approach where the market value of property can actually be supported by per capita income. And I fear, getting there will be messy, contentious and painful for many.

 

Oct 11, 2008 09:28 PM #8
Rainmaker
477,134
Palm Springs Realtor Stewart Penn
Windermere Real Estate - Palm Springs - Palm Springs, CA
Windermere Real Estate - Associate Broker

10/13/08 - The Dow Jones posted its biggest point gain in history today. It surged over 900 points on the day. The S&P and Nasdaq posted equally impressive gains.

Last week people were scared to be in the market, and this week people are scared to be out the market.

FEAR & GREED ...... Remember: "This too shall pass."

Oct 13, 2008 03:09 PM #9
Rainer
33,213
Jay Allen
MovieVoice Production Co. - Paducah, KY
MovieVoice

I can't wait to see what this does to oil prices.

Oct 13, 2008 04:21 PM #10
Rainmaker
1,436,054
Charles Stallions
Charles Stallions Real Estate Services - Pensacola, FL
800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl.

I wonder where the slogan came that says THIS TOO SHALL PASS came from. What a motivational sentence.

Oct 13, 2008 05:30 PM #11
Rainmaker
477,134
Palm Springs Realtor Stewart Penn
Windermere Real Estate - Palm Springs - Palm Springs, CA
Windermere Real Estate - Associate Broker

Charles - Click on the saying in the post and there's a link to the history of these great words.

Oct 13, 2008 05:51 PM #12
Rainmaker
477,134
Palm Springs Realtor Stewart Penn
Windermere Real Estate - Palm Springs - Palm Springs, CA
Windermere Real Estate - Associate Broker

The Wall Street Journal has a great piece titled "Take a Deep Breath, Turn Off the TV, Calm Yourself" - about how to avoid panic selling and the "herd mentality".

So many people I talk to tell me how they're buying on the rebounds and selling in the dips, displaying the panic that this article refers to. It's worth reading.

Oct 18, 2008 09:50 AM #13
Show All Comments
Rainmaker
477,134

Palm Springs Realtor Stewart Penn

Windermere Real Estate - Associate Broker
Ask me a question
*
*
*
Spam prevention

Additional Information