I am now strongly coming to believe that my daughter Faith would grow up to be in the graphic and animation industry and give all the boys a run for the money. She loves the Disney movie ‘The Road to El Dorado’ and already has two fat sketch books filled with her own doodle interpretation of the movie’s characters and her favorite horsey Altivo.
As a person who is obsessed with the financial affairs of the world, I do understand that we have an obligation to fulfill. We owe an explanation to kids about the consequences of the financial crunch that we have currently created! I decided to first explain how this all began to my daughter in the form of a story involving some of the El Dorado characters. Soon she will grow up and start asking questions and I better be prepared.
You can tell this to your children or give your own explanations! 
Lets compare the savings of all the people in the world to El Dorado, the land of many treasures.Tulio and Miguel loved the money that they found in El Dorado and everyone knows it. They soon wanted see their money make some more money. So to do that, they has to invest some of their treasure in order to make some more money in the future. Usually, the people of El Dorado including Tulio and Miguel invested their money in secret places and became super rich but what happened is that, soon other kingdoms found out their secret and started to increase their treasures. Soon, the people of El Dorado did not have many good places to make good investments.
Having understood this, Tulio and Miguel went to the US treasury and invested it in the treasury bonds. Because this gave them the most amount of profit with the least amount of risk. But unfortunately, what happened is that the high priest Tsekel-Kan aka Alan Greenspan reduced the interest rates so low that it did not make any sense to invest in them anymore.
This made Tulio and Miguel turn their eyes towards mortgages. Legends told them, that over the years people have been repaying their mortgage loans every month without fail and therefore it was a safe investment. Since these two weren’t the best of all fraternizers, they sent out Altivo the horse to do the job for them. Altivo the horse, as much as he was smart, he was also lazy. So hired some men and some horses to be mortgage brokers. So people who wanted mortgage loans to buy homes went to these mortgage brokers. Soon a system came into being. These mortgage brokers sold these mortgage loans to El Dorado banks. The banks sold them to the investment companies in the neighboring kingdom of Wall Street. These investment firms in Wall Street made these loans into shares and sold them to Tulio and Miguel aka the global savings.
Tulio and Miguel loved it because more money was coming in. Soon they wanted some more. The mortgage brokers that Altivo the horse had hired didn’t know what to do. So they relaxed on their principles. Earlier, only people who had enough money in the bank and a steady job could apply for a loan. Since the standards were lowered, everybody could get loans even if they did not have enough bank balance or a job. These kind of mortgages came to be known as ‘Sub-Prime’ mortgages. Soon enough, these sub-prime mortgage owners started defaulting on their repayments. This made Miguel and Tulio very unhappy because their treasure was not growing.
So Tulio and Miguel stopped investing their money from the treasure and did not send out Altivo the horse. Soon the entire system collapsed. There wasn’t much money anywhere and that is how it all began – The global financial crunch.
Then came a man named Obama with a lot of plans to make Tulio and Miguel invest their treasure again. But, hey! that is another story.
Research is part and parcel of my new job and as I was researching in the world wide web, I stumbled upon this article on the Wall Street Journal website where there was an article on the improvement of the US economy. In that, the Federal Reserve Bank of Atlanta President Dennis Lockhart said that in overall, the U.S. economy is improving but still fragile. He also said that the he was confident that we (America) will return to a sustainable fiscal path but it would be unwise to be “Panglossian” or naively optimistic about the whole financial state.
In another article I found that the Federal Reserve Chairman Ben Bernanke, in his prepared testimony for Congress’ Joint Economic Committee had said that among the enormous costs of the downturn is the loss of some 5 million payroll jobs over the past 15 months. However experts predict that job losses and the unemployment rates will come to a sustainable level. Obama’s government is undergoing a tough, challenging phase and they are working on this, so let us give them some credit for their planned bail-outs.
So my question to Mr. Lockart is “Why not?”
Why not we stay Panglossian?
With a slow and steady resurgence in various sectors like manufacturing, real estate and every thing else, this the time when we can actually breathe a bit easy. America is a great country with the largest economy in the world and also by PPP. To top it all, we have the second highest income per hour worked in the world. Everything is close to perfect so why are we being so frugal?
The world is not coming to an end. This is the time of economic re-birth world wide. I am beginning feel that the recession is becoming more of a mind thing than of a money thing. Let’s cut the recession drama down a bit and try and stay a bit more optimistic. Panglossian, maybe.
PS: The word Panglossian derives from Pangloss, the optimistic tutor in Voltaire’s Candide.
Back when I was 10th grader, my parents forced me to take up ballroom dancing classes. I never really fell in love with it in the first sight (read dance) but it grew on me. Then I put this to best use in my high school prom. I kept telling myself that I was there to dance for myself and in the end I was crowned as Ms. Whirlwind for dancing non stop that night. I didn’t even get to sit down for a single song. If I could turn back time, I would gladly be time struck on my prom night.
Dancing non stop has a couple of perks.
a) You burn calories b) glimmer.
I was glimmering with sweat that is and M.A.C was ready to sue me for stealing all the ’shine’ out of their ‘Bodyshine’. Lol. Well, this is not exactly, how a girl would want to be on her prom night.
Now, do you think all the boys asked me to dance? No, not really.
I went ahead and asked a lot of boys to dance. The fact is that most of the boys will never say ‘No’ when a girl asks them to dance. So, coming back to the scene, the other boys who saw me doing that, came and asked me to dance. Besides, I would like to think that I had the right attitude and I was and I am still a whole lot of fun. In a typical chick-flick kinda way, a jock asked me to dance. I told him “I’m very sweaty.” and he bent down and whispered “That’s why I picked you.”
So, this blog is all about making that first move. If you have been wanting to take that trip to Bahamas or drive that fancy Cadillac or buy that Malibu villa but never did because you still think that you can’t afford it. Get out of that thought process and start thinking that you can do it. It might take a while but you can do it. And start saving. Make sure that you work on a ’special savings’ holiday budget and save small amounts every month. And when you do, do it happily. Be happy to do so because in the end, it is you that is going to be soaking in the sea or driving that car or sipping vodka in your dream house. If saving is not making you happy, don’t do it. Don’t crib either. Period!
Its like what they say, if the mountain doesn’t go to Mahmoud, then Mahmoud has to go to the mountain.
Take a chance. Its one life. Thats all we get.
Take the lead, make the first move.
PS. What’s behind my new spurge of optimism? The Secret. I feel so much better these days and I’ve found a babysitter and a new job. Watch out for my upcoming posts that come with a new twist. 
It has been just 60 days since Mr.Barack Obama took charge as the new President and the nation seems already displeased with him. I don’t know if we are being restless by expecting a man to pull the country out of a financial crisis caused by years of financial mismanagement. Or did we get carried away by those ‘yes we can’, rhetoric and expected too much out of him.
The new president already seems to be dipping in popularity charts and NY Times even had a page 1 story on Mr.Obama’s increased grey hair in just 44 days of taking over as President.
Coming to the point, Mr.Obama’s Tuesday night press conference did not appear to cut much ice with the media and people waiting for a ‘change’. The NYT describes his address as “sounding like the teacher speaking in the stillness of a classroom where students are restlessly waiting for the ring of the bell.”
The outrage over the huge bonuses that AIG officials paid themselves was a moot point in the press conference. AIG is 80% owned by the government and received billions of dollars in federal bailout money, even as the executives paid themselves huge bonuses. When asked why he did not go public with his outrage on learning about the retention bonuses at AIG, the president has responded, “I like to know what I’m talking about, before I speak”.
Large business corporations made windfall gains when the economy was on a boom all these years and shared the bounty among themselves. Now when the economy is on a tailspin, they rush to the government with bailout pleas (sometimes in plush private jets).
Blogger Hazzard calls to scrap bailouts and let things fail, because “there are hundreds and hundreds of financial institutions out there that made good business decisions. It’s time that they got to reap the rewards of managing their business in a responsible way”. Now, isn’t that what free market economy is all about?
