Well clearly a majority of America is confused about the economy.  There is no reason not to be in all honesty.  This is basically how it shakes down.  We as an economy are cash poor.  We have leveraged ourselves beyond all measure and now we need a bailout.  Well our economy needs it.  If we do not bailout the financial markets it will take quite a while for us to get out of this economic situation.  Do I believe that bailing out the financial markets is the best thing to do?  Well, I believe that there are a number of steps that could have been taken previous to being in this situation.  But since we are now here, I would strongly suggest that we do the bailout with thousands of strings attached to it.  Their needs to be scrutiny across the board to make sure that every single dollar is accounted for and it goes directly to make this market get fixed.  The last thing we need is that the money goes to pay the salaries of the individuals at the top.  Since the markets are partially the fault of those at the top, they should take a pay cut; I do not see any reason why not!  At the same time the treasury department needs to show to the people of America how this plan will trickle down to help the common man and woman that is having trouble paying their bills!  I believe that is where the downfall is, it is very difficult to quantify this. At the same time, we need to see how long it will take for the markets to get fixed with this bailout situation - most are saying 2 to 3 years!  Well then how quickly will this money then be returned?  Clearly, there are a lot of questions that need to be answered to make this work.  My strong feeling is that a bailout plan will be made but to work for both sides there are going to be quite a few strings attached.  My hope that it includes tight oversight so that every penny is returned to the American people!

So what does this all mean to the American people?  This all means that it is going to more difficult to get any loan!  Any type of loan will be more difficult to get.  It is similar to a dog that has been beaten, when you go near that dog it gets scared and reacts.  In a similar way, the banks are hurting and they are going to be very scared to give loans out.  The other way in which Americans will feel it is that there is going to be instability in the financial markets for the next few years.  So it means that those that do put money in the stock market need to diversify their portfolio based on their risk tolerance.  If you want to play it safe then go with government bonds, money market backed by the government and regular bank accounts that are insured by FDIC.  If you have not already, you need to take your money out of brokerage accounts that are not backed by FDIC.  If your brokerage company goes belly up so will your money.
Make sure that all your money is placed in bank accounts that are FDIC insured.  Not sure if it is, then go this website which will check if your account is http://www.myfdicinsurance.gov.  If your account is not, then you just need to move your money to another bank which is insured.  Generally, it is $100,000 for a single individual and joint accounts are $200,000.

I love receiving emails, so please email me at psingh@rempower.com if you have any questions and/or concerns about this or any of the posts I have made.
I look forward to seeing you all at a workshop soon!

Prabhjit Singh