Wednesday, November 19, 2008

Watching the Meltdown

Paul Volker says we're in trouble:

"What this crisis reveals is a broken financial system like no other in my lifetime. Normal monetary policy is not able to get money flowing. The trouble is that, even with all this [government] protection, the market is not moving again. The only other time we have seen the US economy drop as suddenly as this was when the Carter administration imposed credit controls, which was artificial."

Just for kicks I was looking at some historic S&P data. I was interested because much of my future retirement is tied to funds that broadly track that index. In any case, eleven years ago when I took a job as a knowledge worker in the burgeoning global economy the S&P stood at 848. Today it closed at 806. What was that about investing for the long term?


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