Welcome To The Poorhouse

How much did you lose yesterday?
Me? Not much.
While the stock market crashed more than 700 points on news of there being no agreement for a Federally funded bail-out of America's banking system, I just stayed about the same - financially speaking.
You see, I'm probably the third poorest person on the Internet. While my home and rental units and farm are fully paid for, I have no stocks, bonds or treasury bills.

I used to gamble a little too much when I lived on the West Coast. I liked roulette. It had the worst odds but the biggest pay-outs.
If I took $3,000 to Caesar's and played roulette and kept winning and winning until I had $15,000 and then walked away from the table and cashed out, I would have made a $12,000 profit. But, had I stayed at the tables and lost back $11,000 of my winnings - I wouldn't have lost $11,000, I would have made $1,000.
So don't panic. Your profit is just smaller than it was a few days ago.
Just keep doing what you're doing. It's okay to spend money, just don't waste it.
Buy what you need and then buy some of what you're going to need and save the rest.
How many Armani suits do you really need?
If I was a real sucker, I would spend another $20,000 to try to win the $11,000 back - but would have only put myself deeper in debt.
Wall Street speculators are the REAL suckers, in this case.
Now they want you to buy a bunch of chips that they don't really have.


Don't worry, you won't be living like this.
Say that everyone had to sell their house to buy another smaller house. If you now live in a 5,000sq.ft. home you may only have a 3,000sq.ft. home this time next year. If you live in a mansion, you may have to move to that 5,000sq.ft. home next year.
But because no one will be buying homes next year, the borrower market will dry up and banks will be selling homes at a lower price. You may end up making money on the deal in the long run.

The odd thing is; we believe everything that the Government tells us. When the market was under performing - they said that we should save our money. Too many people saved their money and the products, goods and services that we were producing and providing weren't selling. So then the Government said that we should shop our way out of a recession. They even made it too easy to spend money that many didn't have.
College students were given credit cards on campuses just for signing their names. Every department store would give you a small gift just for taking their cards. Sub-prime mortgages were pushed on people who either qualified for a standard loan or who shouldn't have qualified for a gas station card.

I had a lot of friends who wanted me to invest in a pyramid scheme. The problem was that something had to be sold (of the approximate value of the money spent) to make it appear legal. I made a list of ten reasons not to invest in a pyramid (And who could put a price on these wise tips?), made copies and sold that as part of the multi-level-marketing scheme. After I set the people in place, I walked away. You see, I couldn't invest in something that I knew that someone was going to be screwed. Many of my friends got stuck somewhere in the middle of these schemes and got nothing and some got paid. After a while, they did away with the pamphlet (Dummies, two went to jail. The pamphlet was the loophole.)
Anyway the way to get paid is to find a few bigger suckers than yourself and get them to buy your shares until they find bigger suckers to take their place until the whole thing crashes.
This is what happened in our banking industry. The suckers ran out. Congress seems to have actually noticed that we were being the suckers all along.


Am I worried?
Nah, you see...I care nothing about race, gender, religion etc. . I only care that a person is good. I only care that a person strives to do the right thing when that thing is needed. My crew will look out for each other.
If we just keep working and place more value on the things that really matter to us, only the selfish and greedy get screwed in the end.
As I wrote, in an earlier post (hurricane), good people come together in bad situations.
The guy that used to whizz by you in a leased Maybach will probably be working at the local Wal-Mart trying to sell you his Rolex so that he can by groceries. If you were humble and smart, you probably have been living within your means. You have money to spend and assets that are paid for.

If no one is buying gold, gold has no value. You can't eat gold. If someone is not used to having to hustle, they're stuck. People who can hustle (not cheat others - but work hard) will be worth more than some schemer who can't work.

As far as I'm concerned, we'll end up having to pay for their mistakes anyway. Maybe we should let them get down in the dirt too, to clean up the mess that they made.


(photos; Roulette - Fotosearch, Depression - FDR Library)