A good leader has been defined as the ability to hide your panic from others. This past week the New York Stock exchange gave investors the frights with a free-fall of 500 points on Monday. President GW Bush responded to the closure of two of America’s largest investment firms with an admission to the press that the US economy was in the shitter. The market flirted with disaster until the Fed Chairman and the Treasury Secretary convinced the Congressional leaders of the dire need to bail-out the financial institutions or else ATMs and credit cards would flatline by the week’s end. Faced with such a doomsday scenario Congress greenlighted a $700 billion rescue package destined to restore confidence in the banks.
Wall Street rallied at the week’s end to show they had balls of steel and no one was jumping out the windows, claiming this downswing was unlike the Depression. I had predicted a meltdown to 9500 on the Dow Jones. It seems as if I was wrong. The fundamentals of the American economy withstood this attack of negativism, but I still fear the worst is yet to come.
My rich friends in Palm Beach and Millbrook spent the week jockeying their money into safer havens, so that when the collapse really hits home they won’t close everything.
So looking into the future, I say if you’re going to panic, panic constructively.
This will be interesting.