Today is Saturday — six years ago it was a Friday: June 22, 2007.
My first day on the job at the liquor store I now manage. The owner was then involved in a overwrought, emotional collapse of his marriage and hired me on the spot — I proceeded behind the counter and haven’t left. This was a move that was beyond rare, andÂ in the way-stupid category as he didn’t know me from Adam, and I could have been a thief, or a drunk, or any form of nefarious operative.
(Illustration found here).
Instead, the guy put me in charge and left the building. Indeed, he suffered some type breakdown a couple of months later, and after other crazed hi-jinks, his estranged wife took possession of the store in December 2007 and has operated it ever since — and has done an extraordinary job, considering the economics of our time.
Although I’d dropped off my rÃ©sumÃ© a couple of weeks earlier in June 2007, I don’t think the owner then had ever seen it, and he sure didn’t have it close at hand when I walked into the place.
He was behind the counter at the main register when I asked if he was the owner — his immediate reply: “I’m fucked.”
Boy, he’d said a mouthful.
Meanwhile, on that self-same day on the other side of the planet began a series of events which could lead to the reply: ‘We’re all fucked!’
So, hence forth, ourÂ current global econ-explosion started most earnestly.
On June 22, 2007, Bear Stearns pledged a collateralized loan of up to $3.2 billion to “bail out” one of its funds, the Bear Stearns High-Grade Structured Credit Fund, while negotiating with other banks to loan money against collateral to another fund, the Bear Stearns High-Grade Structured Credit Enhanced Leveraged Fund — from Wikipedia.
Apparently, the slow collapse ofÂ economic life started when volatile-fuel met molten-hot flame via the weird-ass “hedge fund” market
To oversimplify the Bear Stearns situation, the subprime mortgage-backed securities market behaved well outside of what the portfolio managers expected, which started a chain of events that imploded the fund.
Unfortunately, the Bear Stearns portfolio managers failed to expect these sorts of price movements and, therefore, had insufficient credit insurance to protect against these losses. Because they had leveraged their positions substantially, the funds began to experience large losses.
— online post Sep 6, 2007 at investopedia.com.
And the whole shebang came crashing down in a real-short space of time.
When the current liquor store owner took over in December 2007, business was hot, the economy on the surface was still afire and a lot of people were still spending a lot on booze.
In that month, though, some folks knew some bad shit was about to hit the fan.
FromÂ the UK’s Telegraph on Dec. 22, 2007 — seven months to the day later:
York professor Peter Spencer, chief economist for the ITEM Club, says the global authorities have just weeks to get this right, or trigger disaster.
“The central banks are rapidly losing control.
By not cutting interest rates nearly far enough or fast enough, they are allowing the money markets to dictate policy.
We are long past worrying about moral hazard,” he says.
“They still have another couple of months before this starts imploding.
Things are very unstable and can move incredibly fast.
I don’t think the central banks are going to make a major policy error, but if they do, this could make 1929 look like a walk in the park,” he adds.
The Butterfly Effect — a small hire in faraway northern California triggers the global financial meltdown.
Ha-ha-ha-ha-ha — cough,cough, and…choke.