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A Tale of Two Economies

Its seems that the world is very Dickens-esque these days - simultaneously, the best of times and the worst of times. A recent peak at some of the latest headlines: the dollar continues to sink to new lows, oil prices continue to soar to new heights, venerable financial institutions literally disappear off the face of the earth overnight, the housing market is so bad that people are torching their homes because they're worth more burnt than standing. People are actually speculating that our banks are riskier than Nigerian banks. Sounds like the worst of times indeed.

But the best of times? Well, yeah. You would think that all of this would have a major impact on economy. But it just doesn't seem to be the case - yet, anyway. Unemployment numbers seems to be pretty stable. Thanks to the Fed, interest rates are actually shrinking. Yes, gas prices are high - but other than that inflation seems to be in check. Even the IPO market came roaring back with an $18 billion IPO from Visa - the largest ever.

Heck, the only folks that seem to be suffering these days are the burglars and that's because there's no market for their stolen goods ("everybody has everything now" is the quote of a frustrated thief). For the rest of us, that's a good problem to have.

Of course I could be missing the boat and this could just be the off-base personal oberavations from someone living in the bay area bubble. Remember this is the place where the housing market continues to stay the course (for now), layoffs are more rumor than fact and VC's and start-ups continue to thrive. But I don't think so.

I don't hear anything different from my friends scattered across the country. It seems to me that the response to the financial calamity that is occurring before our very eyes is a collective shrug. Not that I'm advocating anything different. It just seems, well, odd.

So these are the best of times and the worst of times then. Fine. I can live with that. In fact it's good. No harm, no foul. Everyone keeps on keeping on. Great. That works for me. No problemo. Um.....so why am I nervous?

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Comments (2)

emily:

Maybe if the press talks about the looming recession enough, we'll all make a run on the banks and see it to fruition. It is still a wonderful life.

Blair Lewis:

Agreed...to a point...downturns always effect the lower end of the workforce first, but I agree things aren't as bad as they seem until inflation comes into effect, and it will. The massive rate cuts and 2BB cash infusion have to cause that eventually...

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This page contains a single entry from the blog posted on March 20, 2008 11:45 AM.

The previous post in this blog was Crash Course On the Subprime Crisis.

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