Musings as the stock market crashes

Moments ago I noticed that the stock market is down 557 points. Just swell.  Of course we all knew there would be a correction, but 557 points (and there still are 35 minutes to go).

My grandfather would say that the whole world is built on a mound of bull shit. He did not say it to me, but must have said it to my dad, who--when I was an adult--relayed the wisdom.

I think in large part my grandfather's theory is true. And it is at its truest when it comes to finances.

You have x and I have y.  Right?

Guess what? You really don't have x and I really don't have y.  Sure, you go the liquor store and can give the owner some green stuff in exchange for a six pack. And if you want to buy a couch you can put it on a credit card, and then later write a check or do a dance with your computer and draw the funds from an account.

But what account?

It is all a shell game.  The bank says you have x. You keep putting in your salary in the bank. And you get a slip of paper with your balance.  That money is not in the bank. You want some money sure, they open a drawer and give you money and adjust your balance. But your money is not there.  If someone decides to say ooops, you have no money.

Because of what happened in 1929 the federal government guaranteed your balance up to 100K. And then Obama because of the Bush negligence upped it to 300K.  Sounds good.  It's really meaningless.  If the bottom falls out on the economy, there is not enough dough around.

There are people who relied on pensions who can vouch for this.  The money there is not there. We have all agreed that it is there, and as long as the economy does not fall like it did in 1929, we will keep pretending so if you have more money on a balance sheet than I do, you can live in a swankier house, but we are just pretending. The whole financial system is built on a mound of bullshit.

Why is the stock market down (now 618 points dropping 60 points in nine short paragraphs) today and was up last Friday.  Smoke and mirrors.

We will be fine in all likelihood.  But don't let anybody kid you, the economy teeters on less than terra firma.

Final bell 665.