The last three days have resulted in stock market losses not seen since September 11Th 2001. With nearly a 11% drop in the Dow Jones in just 72hrs. IRAs, 401ks and just about every Milford stock portfolio felt the shock.
There were lots of people today staring at the markets in complete despair as they assessed their personal losses yet again. This all at a time when everything from energy prices, to property taxes and food costs are on the rise. Making matters worse Milford is now under a credit crunch with 350 active foreclosures on homes whose value have been either stagnant or in danger of a further decline.
The global and American economic situation is dire, and is now hitting home and sobering even the most optimistic people in our town. Finding a safe haven for retirement funds is becoming increasingly difficult as America's once largest banking institutions like Merryl Lynch, AIG, Freddie Mac, Fannie Mae, and Lehman Brothers continue to show signs of distress and failure.
No one knows for certain if we have seen the worst of this economic crisis, but few have even prepared for the potential for negative events that accompany a severe economic situation. A recession is defined as two quarters of back to back negative growth, but what do we call Five or Six or maybe even Ten. Just 18 months ago the Dow Jones was at 12,500 and now it would appear possible that the index could breach the 10,000 mark making our economic misfortune in the coming months potentially worse then the height of the terrorist acts of 9/11.
On Wall street the blame game is in full swing, fear is high, our federal leaders are worried about contagion and a panic that could spread to every sector that is still in somewhat good condition. This is rapidly becoming clear that our brokers and portfolio managers are out of control and are unable to reasonably guarantee the safety and sanctity of any investment that bears even the slightest risk.
The economic climate in town is one of loss, uncertainty, and worst of all a feeling of helplessness in what to do next. Some a while back called for the purchase of Gold others have gone more ominous and advocated for the purchase of food as you cannot eat Gold. It would appear at the moment that all investors are in a bind and are facing some very hard choices.