Monday, September 15, 2008

Why it's a great time to be in school

I'm not going to pretend to have a clue how this will all shake out, but can a certain political party stop pretending that we aren't in a recession? To recap Sunday's and this year's events:
In one of the most dramatic days in Wall Street’s history, Merrill Lynch agreed to sell itself on Sunday to Bank of America for roughly $50 billion to avert a deepening financial crisis, while another prominent securities firm, Lehman Brothers, hurtled toward liquidation after it failed to find a buyer...

But even as the fates of Lehman and Merrill hung in the balance, another crisis loomed as the insurance giant American International Group appeared to teeter. Staggered by losses stemming from the credit crisis, A.I.G. sought a $40 billion lifeline from the Federal Reserve, without which the company may have only days to survive...

Though the government took control of the troubled mortgage finance companies Fannie Mae and Freddie Mac only a week ago, investors have become increasingly nervous about whether major financial institutions can recover from their losses...

The Treasury and Federal Reserve had already stepped in on several occasions to rescue the financial system, forcing a shotgun marriage between Bear Stearns and JPMorgan Chase this year and backstopping $29 billion worth of troubled assets...
That's not counting Countrywide or IndyMac, and I'm sure any number of other collapses. Did I mention that there is almost a seven years supply of condos in Atlanta for sale? Also, I have a suspicion that we are going to have an oversupply of apartments pretty soon. The pace construction over the next three years really outpaces the absorption rates, at least for certain markets.

I'm just glad I'm in school. I'm only wondering if I should go for an MSRE in case this mess isn't over by the time I've got an MBA. I had a professor use the term "stagflation" the other day. That was a special moment, to be honest.

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