Kremmling " Economic roller coaster ride could take us to a new place |

Kremmling " Economic roller coaster ride could take us to a new place

Larry Banman / Without a Doubt
Kremmling, Colorado

“Round and round she goes, where she stops, nobody knows.” That was one of the lines from “Major Bowes Original Amateur Hour,” which was a radio show that ran from 1934-1948, when it made the transition to television as the “Ted Mack Original Amateur Hour” and ran until 1970.

The phrase could also be used to describe the current global economic condition. The destination of the economy is truly anybody’s guess. I have yet to hear an analysis of what is happening from anybody who is speaking with any degree of certainty.

The people who make their living selling anything to do with Wall Street are, of course, telling us to hang on and wait for the market to stabilize and then start growing again. The fact that the market fluctuates wildly every time a tidbit of financial news is received is an indication to me that everybody is nervous. Just look at the pattern of the past several weeks.

A large company says they are failing and the DOW plunges. The government says it will bail out that large company and the DOW soars. Housing starts go down and market responds in kind. A report surfaces that people are saving more money and not buying houses and the market thinks that is good so the DOW rises. The roller coaster ride we are on is enough to make a person nauseous.

I certainly don’t have any insightful knowledge. A year ago, my biggest investment came at the service station when I doubled the value of my truck whenever I filled it with gas. What little savings I have are in a passbook account which, come to think of it, doesn’t look that bad right now. My investment strategy of playing it safe and plugging along now sound like strokes of genius.

What I find fascinating is not the market fluctuations, but rather the human drama that unfolds around those circumstances. It should be noted that most of the people with whom I regularly rub shoulders don’t have Warren Buffet on speed dial. I don’t know anybody who lost millions. I do know people who saw the value of their 401 (k) accounts drop in value by a third to a half.

This morning, I heard that PERA is seriously considering reducing its benefits because it has lost $12 BILLION. See note above regarding my passbook savings plan. Shoot, a coffee can in the back yard makes more sense than losing $12 BILLION. And, the vast majority of us who own property have lost quite a bit of equity.

The first reactions I saw from people were generally philosophical in nature. Some were almost relieved that the questions of where to place their money or whether or not they should consider early retirement were suddenly taken out of the equation.

You know how you wrestle with an issue that has various pros and cons and you can’t come to a clear-cut answer? That is how it must have been for those folks. Having the decision made for them must have felt like a relief. For those of us with the passbook savings plan, we never had to worry about those distracting “early retirement” thoughts.

Generally speaking, I think people believe things will work out. They are resigned to the fact that it will take a while, but mostly there is the thought that order will be restored, our homes will regain their value and our retirement nest eggs will reappear.

A significant number of Americans are counting on Barrack Obama to pull us out of this morass. The thinking apparently is that things have to get better, as long as “W” is out of the White House. Meaning no disrespect to Mr. Obama, but this is a much larger problem than a few “changes” can solve. I might be wrong and he may turn out to be part of the solution, but he isn’t the solution. I happen to think that the past few months are more than a market hiccup or even a burp. I think that within the next few months and years, we all will have made significant changes in the way we live.

There are a few people, to my way of thinking, who don’t get the fact that things will have to change. People like the corporate executives who responded to serious financial troubles in their company by hosting a “retreat” at a plush California resort.

People behind the union employee salary and benefit packages that make it difficult for American companies to provide a competitive product. Entertainers like Madonna, who refused to perform a concert at the Pepsi Center until the commode in her bathroom had been fitted with a brand-new lid (complete with manufacturer’s seal). In other words, people who can’t see beyond their own objectives to see a bigger and more complete picture.

I have often believed that in a crisis, the cream always rises to the top. If you watch closely, you can see that cream starting to form. You see it in businesses that realize that simply opening the doors is no longer a guarantee of success. Service to the customer will become essential to maintain viability. I have noticed sales that are actually beneficial to consumers rather than the old “bait and switch” tactic to get you into an impulse buying position.

Employees realize that the job they have isn’t so bad because they hear about hundreds of thousands of people who suddenly don’t have a regular paycheck. I don’t know about you, but I have seen a marked improvement in employee attitudes toward the consumer. People are becoming more frugal, doing things for themselves, re-using items and generally being less wasteful. Perhaps we are graduating from the disposable society that saw its genesis in the ’70s and ’80s.

A person has three courses of action: 1) Ignore what is happening and hope to wake up to the way things were one year ago, just prior to the first warning signs we saw in the housing market. I just don’t think that is going to happen. Too much has occurred, too many things that are not easily reversed. 2) A person can worry him or herself sick over how bad things could actually get. If nothing else, worry is rarely productive and the old adage is that very few of the things we worry about ever come to fruition.

3) A more logical course of action is to realize there will be change and to look for course corrections as required. Since options for changing careers and jobs are limited, perhaps you can look more closely for fulfillment in your current situation. To cut down on expenses, find satisfaction in the possessions which you already own.

Look for value in purchases and acquaintances. Spend time in self-reflection and self-fulfillment, you just might like what you find and you don’t need to spend a dime.

And, if you are looking for investment advice, I happen to have several coffee cans in my garage.

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