- Written by Dr Paul
With the bad economy getting worse daily, tension and stress levels soar to new heights. More than ever, people are starting to crack under the strain, and rarely do you see a smile on anyone's face. Avoid anyone you think who could be ready to go postal on you.
It is like we are on a white water raft that is about to go over the falls to meet certain death. We can't let go because we will surely die. Some in the raft are resigned to their fate, while others are still in utter panic.
People who still have a job are working longer hours and trying to do more in less time in the vain hope that they can earn their job security. All vacation is canceled and weekends will often find people in the office. They are holding on tightly the only way they know how. But those who are out of work know that there is no connection between a job well done and job security.
The government bailouts have not trickled down as hoped. For small businesses that depend on loans to operate, it is even harder than before to get approved. The banks are more wary about lending money, and have created new risk management practices to reduce their exposure to potential bad debts, which means even more hoops you have to jump through to get that loan. Even if you jump through the hoops successfully, they can still refuse your loan. And if you were previously pre-approved for a business loan, it may be revoked at any time. With uncertainty where you used to have support, many small businesses are just a few days away from going under.
And on the personal side, if you have a personal line of credit, watch out! The banks are coming after those too. They are checking up to make sure you still have a job, and enough equity to cover the line. If your employment status has changed, your credit limit will be reduced with prejudice. If you have an outstanding balance on your line, you may be forced to pay back the line immediately. Many people who had personal lines of credit, recently got a shock to find them gone. This was their lifeline, a way to make it through tough times.
As regards to investments, the stress is still there. On CNN they said that according to the S & P Index, the market had come back to where it was at the start of the year, but that means nothing. Since last October, most investors are still down 60-80%, and it is not coming back soon. Many stocks have been de-listed, which means your investment in those companies is gone for good.
Other than speculators and those dumb enough to listen to their financial advisors, most people are keeping what little they have left in cash. Cash is the safest place right now. For example, if you were to follow the flawed 'dollar cost averaging' model and invest regular monthly amounts in most stocks, your contributions each month would not keep up with your losses. That is like trying to fill a leaky bucket with water using a teaspoon.
On a positive note, sales of painkillers and sleeping pills are up.