Financial Betting Articles

Ask Not What The Economy Can Do For You...

The humour has turned gallows. I received an "Urgent!" email at the weekend. "The Nigerian government has warned its citizens that it may occasionally receive emails from the UK, US and Europe telling them that all bank deposits are guaranteed. Be warned - this email is a scam!"

There's an old market adage that when the bellboy starts giving you stock tips it's time to start selling. Well, the bellboy has certainly started talking about what caused the credit crunch and when I hear him tell me how to solve this panic-induced market crash I might just get out my cheque book and go long a few stocks.

What has happened in recent weeks has not been just a crash but an earthquake. The very foundations of all we held dear have been shaken and shaken again. We doubt the ground beneath our feet. The reports of buildings collapsing around the world have been replaced by a tremor beneath our very own feet.

It is, as they say, going to get worse before it gets better.

I predict a riot. I predict finger pointing. I predict hyperbolic front pages decrying the government and bankers and the beating of chests across the media. I predict anger and pain. I predict panic and the shredding of nerves. I predict that everyone of us will question whether their job is safe. I predict that we ain't seen nothing yet. However, I also predict that none of this will get the washing up done.

In calmer - normal - times the money around the world generally flows towards the best investments. This is some sort of Efficient Market theory and, on the whole, it works. Or it has worked. Right now the money is flying from bad investments. Remember the ban on short selling of financial stocks? Did it stop bank shares from collapsing...?

James Cagney was once given a piece of advice by his father. "Plant both feet on the ground and look every man in the eye." I think it's time to look this market crash in the eye.

If collectively we can cause this rout then together we can sure as hell stop it. Pant-weeing journalists running to their microphones to blab about every new Treasury-led bail-out is not what is needed now. Calm heads and even calmer measures are required. The Brown government's rescue package is well thought out and a strong first step. Who knows, like Churchill, he may need adversity to bring out the best in him. Either way a bit of balance would go a long way right now.

When we look back on the Crash of 2008 the people that will be held in highest esteem will be those who stood their ground and fought. Not the ones who left the field of battle decrying all about them, but those who rallied their troops and banded all together to get their companies and colleagues through this. Those, if you like, who asked not what the economy could do for them but what they could do for the economy. Depression has landed its long boats on our shores and we can drop our swords and take flight or stand and drive it from our land. It's time to die on our feet rather than live on our knees.

As ever, Shakespeare summed it up better than any other could...

We few, we happy few, we band of brothers;

For he to-day that sheds his blood with me

Shall be my brother; be he ne'er so vile,

This day shall gentle his condition:

And gentlemen in England now a-bed

Shall think themselves accursed they were not here,

And hold their manhoods cheap whiles any speaks

That fought with us upon Saint Crispin's day.

Henry V, Act 4; Scene 3.

The War on Depression starts here.

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