Taken from The Boston Phoenix | By Kara Baskin
«In my wildest dreams, I never thought my stock-market ignorance would be something to brag about. But, as you probably know by now — unless you’re even more of a financial rube than me (not possible) — Wall Street has been reduced to rubble. Lehman Brothers? The Jonas Brothers are now more reliable and solvent prognosticators. And the government’s taken control of Fannie Mae, Freddie Mac, and AIG. I’m no economic scholar, but I think this means that the US is now more communist than China.
I won’t attempt to unravel the minutiae of this fiasco, as I’m fairly sure my humble editors frown upon plagiarizing Wikipedia. So I’ll write from the heart, which is where most people are affected by this crisis, anyway (besides their wallets, of course): I’m the type of person who, in better times — in other words, up until this past week — watched with envy as friends bought McMansions with impossibly crafted, illogical mortgages that looked like pyramid schemes. I cursed my stock stupidity when people offhandedly referenced their juicy investment portfolios.
Flipping through Money magazine always left me with load rage. The worst were the profiles of people in financial «distress.» I loathed the smug couples with their cookie-cutter homes and their tales of woe: «But we only have $500,000 in savings! Oh, Tripp, how will we ever afford our second property on a golf course?»
Me? Once, tipsy on Yellowtail chardonnay, I logged onto sharebuilder.com and bought a couple stocks. The only one I remember purchasing is Harley Davidson, and that’s just because its stock symbol is HOG.
As for the rest of my assets? I’ve got one paltry bank account and a slightly anemic 401(k) plan. I don’t know why I never got motivated to learn more about investing. Maybe it’s because I dropped out of math in 11th grade. Maybe it’s because my version of «financial planning» is throwing myself and three pounds of crumpled receipts at the mercy of a robotic H&R Block representative every April 14.
Regardless, I could never escape the feeling that most people out there knew something I didn’t, that I was somehow inferior as a crazy creative type. There must have been a secret investing handshake that no one told me about, because while I furnished my rented apartment with IKEA’s finest plywood furniture, everyone else was leasing BMWs and coming up with fat down payments on mini-manses in Weston.
Ha! Not so fast. Turns out, Wall Street’s just as fallible as me. I know it’s kind of unpatriotic and cruel, but there’s something schadenfreude-riffic about watching arrogant and formerly rich assholes scurry for help, tails between their legs. The New York Times said it best: «Wall Street traders began to believe that the values they had assigned to all sorts of assets were rational because, well, they had assigned them.»
They overplayed their hand and believed their own hype. There comes a tipping point when ego and greed replace empirical data and logical confidence. The problem is, for better or worse, Wall Street sets the confidence level for the rest of the country. They rally, we rally. They panic, we eat Ramen noodles. But now the government is trying to shock the flat-lined financial system back to consciousness with a bailout. Think of it as pouring ice-cold water on an extremely drunk person’s face. Sure, they might now be awake, but you wouldn’t want to be riding shotgun while they’re behind the wheel, would you?»