Stacy Comments on the Crisis

I wanted to take this opportunity to say a few words about the situation we’re in, how we got here, what’s likely to happen in the days ahead and what you should be doing to protect your family’s finances. These are my thoughts alone…not any station’s, network, or website. And while I have more than 10 years of Wall Street experience and 20 as a TV commentator, I don’t have a crystal ball. So I can’t guarantee that what I’m thinking is any smarter than what you may be thinking.

Let’s start with how we got here: in my opinion, this banking crisis stems from nothing more or less than bonehead judgments by four groups: mortgage lenders, who made ridiculously bad decisions about who to lend money to. Homeowners….particularly in bubble markets like California, Nevada, Arizona and Florida…who thought they didn’t need to read fine print and believed that trees grew to the sky. Wall Street, who packaged the resulting stupid mortgage investments and then not only sold them by the billions…but bought them as well. And Washington, who despite ample evidence over decades that Wall Street can’t be trusted, trusted them anyway and refused to put in place even the simplest and most logical of safeguards.

That’s the short course on how we got here. Now the question is what’s next. Your guess is as good as mine as to when or if the government’s rescue bill passes and, more importantly, whether it will work if it does pas. But one thing I do believe is that we’re better off with some sort of rescue package than without one. Because if our credit system ultimately fails…meaning consumers and businesses can’t borrow money…our economy…and the millions of jobs that depend on it…will be in serious trouble.

To those who believe the bailout will unfairly benefit those who caused the problem…I agree, and it’s a bitter pill. Unfortunately, however, sometimes the rascals and the righteous are in the same lifeboat so you can’t rescue one without rescuing all. Not fair, but better to save all than none.

Now I’d like to say a word about what you should be doing right now…bailout or no bailout. First, if you have money in a bank, if it’s less than 100,000, it should be safe. But this is a good opportunity to learn how to check on your bank’s safety, and you should. You can learn about FDIC insurance at FDIC.gov, and you can check out your bank’s safety…at least somewhat… at numerous websites including Bankrate.com. If for nothing other than piece of mind, do it.

As far as stocks go, this will depend largely on a bailout. If we get one, the market stabilizes sooner, although it won’t be smooth sailing for a while. If we don’t get a government rescue, the market will get worse…potentially a lot worse. So what do you do? For most people…say, those with a 401(k) plan at work who are years from retirement…the answer is you do nothing. You don’t sell and you don’t stop contributing. Because unless you the think the American economy is going to go to zero, you could be selling at the bottom. So be patient. I began my television career with a series of interviews back in 1987 when I was a broker at EF Hutton. The circumstances weren’t all that different….in fact, in some ways they were worse: the Dow dropped 20% in one day. It was scary, people were freaked out and it took years to recover. But believe me: in retrospect, it was a much better time to start investing than to stop investing.

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Comments & discussion

We welcome your opinions, but let’s keep it civil. Like many businesses, we reserve the right to refuse service to anyone. In our case, that means those who communicate by name-calling, racism, using words designed to hurt others or generally acting like an uninformed bully. Also, comments that include links to email addresses or commercial websites typically aren't posted. This isn't a place to advertise your business.

  • Rhonda Wolfe

    Hello Stacy,
    My name is Rhonda Wolfe, and I enjoy the segment with you on my local news, WJHG News Channel 7, in Panama City, Florida.
    You always have such useful tips and I love the way you check out products to find out if it is worth spending money on.
    I have a request, there is a product called Riddex, that is supposed to get rid of roaches and rats for good. Now living in Florida, pests are very common. I am hoping that you will get this product tested, so that us Floridians might be able to go chemical free.
    I appreciate the fact that you may even consider doing this!
    A Fan,
    Rhonda Kay Wolfe

  • Rhonda Wolfe

    Hello Stacy,
    My name is Rhonda Wolfe, and I enjoy the segment with you on my local news, WJHG News Channel 7, in Panama City, Florida.
    You always have such useful tips and I love the way you check out products to find out if it is worth spending money on.
    I have a request, there is a product called Riddex, that is supposed to get rid of roaches and rats for good. Now living in Florida, pests are very common. I am hoping that you will get this product tested, so that us Floridians might be able to go chemical free.
    I appreciate the fact that you may even consider doing this!
    A Fan,
    Rhonda Kay Wolfe

  • http://www.moneytalksnews.com/ Stacy

    Hi Rhonda,
    I haven’t tried Riddex, and I normally shy away from dong specific product endorsements. Nor do I have the time or staff, unfortunately, to conduct scientific testing. I would, however, be skeptical about any product that claims to rid us of roaches and rats forever…they have, after all, lived on the planet much longer and more successfully than we have.
    That being said, as a Florida resident (I live in Fort Lauderdale) I’m all for anything that will give us the upper hand on bugs! :-)

  • http://www.moneytalksnews.com Stacy

    Hi Rhonda,
    I haven’t tried Riddex, and I normally shy away from dong specific product endorsements. Nor do I have the time or staff, unfortunately, to conduct scientific testing. I would, however, be skeptical about any product that claims to rid us of roaches and rats forever…they have, after all, lived on the planet much longer and more successfully than we have.
    That being said, as a Florida resident (I live in Fort Lauderdale) I’m all for anything that will give us the upper hand on bugs! :-)

  • jane moquin

    Help; I have no idea how to spell this amendment, but it was signed by president Clinton in 98/99. It pertained to banking. it opened doords in commercial banking that should have been nailed shut , please tells me the proper spelling. thank you jane

  • jane moquin

    Help; I have no idea how to spell this amendment, but it was signed by president Clinton in 98/99. It pertained to banking. it opened doords in commercial banking that should have been nailed shut , please tells me the proper spelling. thank you jane