Financial Problems Aren't Just For the Other Guy

So what started off with a decision to read a post at http://www.emptyeasel.com/ about blogging ended up taking me to England and Wisconsin and back. At the easel, a sketch artist's blog was pointed to as an example of how to attract visitors. But when I got there I discovered the artist/blogger was posting about what she found out by standing in line waiting to get into her bank, Northern Rock.

Apparently, the subprime lending situation isn't limited to the US. In England, when the folks who placed their money at Northern Rock found out that their savings, etc, were not fully insured, they began to line up to move their money. But after several days of the pressure building the bank announced not only were they now fully insured but anyone replacing their money before Oct. 9 would receive a full refund of any penalties they had to pay for early withdrawal. We aren't the only country feeling a credit crunch.

Here in California we haven't seen any bank runs yet, as far as I know, but that hasn't stopped us from beginning to wonder and worry exactly how banks work.

And for that matter what is going to happen in the whole credit industry has become a question that over the next few days I intend to study.

I am not an investor . . .

but I am interested in the subject because my partner T. is. So I read with interest J.D.'s post at http://www.getrichslowly.org/ today when he mentioned a site called Transparent Investing the brainchild a San Francisco based financial planning group called Iperio Group LLC. A quick overview of the site revealed a simple but articulate 10 step approach to designing your own investing strategy. I especially liked the calculators and links to sites. Also, several of the steps were accompanied by video presentations which was excellent for my wife who is much more of a visual learner than a reader.

Meanwhile, at http://www.alternet.com/ one of the day's lead articles was about America's apparent addiction to credit. At first, as I read the headline and opening sentences, I thought no it's not an addiction. But then I thought back to the Christmas before last when I was in the midst of a cash crunch and how I justified using my card by comparing myself to the country's trillions of debt. Hell, I thought, why should I worry about a $1000.00 when the whole country is pushing 8 trillion? Sounds a lot like the justification a drinker might make just before that fatal car crash, right? Unfortunately, in the article, John Ince, fails to fulfill the promise of the headline. Yes, he does provide several examples of over indulgence in the use of credit that could be very useful in arguing that such behavior is out of control. But no he does not stay with the argument long enough to prove satisfactorily that the reason for the behavior is that it is addictive. Instead he goes off on the tangent provided by the examples and discusses what will happen as we continue on this course of irresponsibility. Too bad, I liked the premise. But I might argue that we are really addicted to the things that the use of credit brings us. Credit in this case is the enabler that when abused becomes the destroyer.