The Dropping Dow

As I type this post, the Dow is currently down 530 points from this morning. Unfortunately, the day is only half over. What will be the outcome when the market closes, I wonder?

And to think, after the House passed the bailout bill towards the end of last week, the market was supposed to see renewed hope. In anticipation of all of the "fantastic" opportunities in the bill, the market was supposed to go up. But, once again, it's dropping.

While I watch this unfold, I think back to something I saw on the television last night as I watch a special on Fox News Channel at midnight. The special looked into our current economic woes, and uncommonly from the bottom-up, instead from the top-down. At the bottom resides the mortgage crisis. The woes of people in foreclosure who cannot afford to pay their mortgage bills every month, especially in the difficult economic times brought about by high gas prices and other energy costs. But digging deeper, you'll see that many of those individuals who are in foreclosure, considering smart business practices, should never have been able to recieve a mortgage loan in the first place.

If you were loaning $500 to a friend, and you knew that your friend didn't really have a way to pay you back, would you still loan him the money? Perhaps you would, because he was your friend. But what if you were a loan officer in a bank. Would you loan $150,000 for a house to someone who didn't have any income, or if he did, it wasn't enough to pay his monthly principle and interest payment? Of course you wouldn't, because you'd lose your money. It would be a horrible business position.

But this very thing is what banks have been doing throughout the past years! Why? Perhaps it goes back even further to an organization called ACORN: The Association for Community Organizations for Reform Now.

If you're interested in learning more about this connection, Google it for yourself. Otherwise, I'll explain the rest in my next post.