Saturday, October 11, 2008

We Have Nothing To Fear But Fear...

"Put me in a money market fund"

People all over the world are panicked and moving their money to a safe haven much like they did back in 1929 when people pulled money out of the banks and stuffed it in their matteress.

The trouble is that when people pull money out of the stock market, which depends on selling shares of stock, and put it in a money market the share price of stocks plummets, which leaves less capital for the companies that are selling shares.

Of course there are bonds, which a company, municipality or government uses to borrow money with a promise of repayment. But folks are scared of bonds too.
I do not know what to think.

The talking heads on TV don't make the situation any better.

Ol' FDR was right when he said,
"We have nothing to fear but fear itself..."

That explains it to a T. Everyone is getting out of the the market due to their fear of fear.

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