2009

As 2009 approached, several of my friends looked forward to the year with hope and optimism. In general, I am hopeful and optimistic. Unlike my friends, the coming year settled into my stomach like a knot waiting to be pulled apart. It hasn't gone away, and for all of us, I think it's really time to hunker down and brace ourselves, for the storm has not passed, and will not pass for some time, I'm afraid.

I think in some areas, the stock market actually, I think things will sputter along as they have, but the losses for corporations have been built into many analysts' forecasts, and so although the market won't be anywhere near the highs of 14,000, they will likely stay in the ranges where they are now for sometime. I could be wrong though, because the market is erratic and unpredictable, and will crash when good news comes out.

I do think everyone should keep their eyes on Bank of America, who posted huge losses after the acquisition of Merril Lynch. It turns out that BOA's CEO, Lewis, did not want to go through with the deal, but both the Fed and the Treasury department pleaded with him not to walk away from the deal. This is why BOA has gotten two bailout infusions since October, when the deal was hastily announced. I think everyone should watch BOA because they are the largest bank in the country. If they fail, then there will be no one to buy them out. They are simply too big. Back when I worked for a financial firm, I was very interested in Mergers and Acquisitions, and essentially, if a company bought them out (although why would they, when they are carrying Merril's toxic assets), they would have to sell off a large amount of their deposits, so as to avoid a monopolistic venture...and quite frankly, who has the cash to take them on? Not only do they hold Merril, but they also have Countrywide, one of the main culprits behind the subprime mortgage crisis which spawned the situation we are all in now. I thought it was a big mistake to take on Countrywide, and now they have the mess of Merril. Thankfully the government realizes that they put BOA in that position, so they will be propped up. What is the long term consequence of this? I don't know what the lawyers have drawn up in the contracts, but if BOA is smart, they should sell off those two arms of the company as quickly as possible.

The most jarring aspect of the recession is the sheer number of jobs that are being shed. Companies do this to survive, but I wonder, should they all survive? If they were dependent on a consumer base that could not be sustained in times of a contraction, then did they really have a viable business plan to begin with? I remember my father once told me that with companies, either you grow or die. That assumes that all variables remain constant, which we know they don't, in which case most companies will fail. What will be there to take the place of those jobs? I know Obama has plans, of which I support, and I hope for our sake that they work. Otherwise, this isn't just a recession....

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Yesterday we finally got our sofa. In these economic times, we feel guilty for making such purchases, but at the same time, neither B nor I subjected ourselves to the risks of the past six years, and so we are healthy, financially speaking. Also, that one purchase helped out many people. We helped the sales lady who made the commission. We helped the city and state by paying the sales tax, which helps them with their revenue. We helped the owner of the store, the leasing company who owns the building (if the owner does not already own it), the people who made the sofa, the growers who grew the sustainable wood (we checked into that part), and all of the states and cities involved with those aspects. So for those reasons, I do not feel guilty at all, because I know that in our own way, we helped many people. Next on our list: buying two chairs from IKEA. No, it's not US based, BUT, the delivery people are local, taxes are applied, and we can't act like Sweden doesn't provide us with any lending. So, what's good for the goose is good for the gander. And while we wait for the bottom to hit with housing, we have a comfy home with furniture that actually looks like adults, and not recent grads, own.

Oh, and everyday I also thank God for the blessings we have. I know how quickly everything can change, and I also know that we are not immune to any of what's going on.