The stock market is tanking - are we in for another Great Depression? Is it all bad news? Motley Fool provides another perspective:

Judicious reflection, realization of the truth, and measurement of facts all say the same thing: We’ve seen markets like today’s before — and some far worse. And in every case, the point at which the market has turned irrational or overly pessimistic is precisely the time we long-term investors should have bought equities.

Despite the headlines proclaiming the next Great Depression, this is no Great Depression — only a panic helped along by the short-term mind-set of the financial industry. Financial media’s job is to attract readership by sensationalizing news events, and financial institutions, which are built on commissions and fees, want to keep money moving in and out in order to bulk up their own revenues. So both fan the flames of panic.

Read more: The Wall Street Panic of 2008

I’m not writing this blog to alarm people…but to be aware…yet, it’s hard not to be somewhat concerned when you read the following in the Wall Street Journal, a very mainstream and conservative publication:

I don’t want to alarm anybody, but maybe it’s time for Americans to start stockpiling food.

No, this is not a drill.

You’ve seen the TV footage of food riots in parts of the developing world. Yes, they’re a long way away from the U.S. But most foodstuffs operate in a global market. When the cost of wheat soars in Asia, it will do the same here.

Reality: Food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund. And there are very good reasons to believe prices on the shelves are about to start rising a lot faster.

Read the rest of the story: Load Up the Pantry

I’ll be the first to admit I don’t really understand all the ins and outs of Wall Street, but I did know it was very big news when the large investment banking firm Bear Stearns practically went belly up within a week…and then, with a Fed bailout pending, Bear Stearns was bought out by JPMorgan for a measly $2/share.

If none of this makes sense, you should still check out the Housing Bubble Blog for bits and pieces on this latest financial market news. More financial companies look to be in serious trouble with unheard of billion-dollar losses. Some readers are concerned that the Fed’s response in this situation is mirroring what happened prior to the Great Depression of the 1930s.

If you’ve been following the U.S. financial situation lately, you’ll see a lot of bad karma (i.e., subprime loans) coming back to bite the asses of the big corporations that profited from them. With Federal Reserve Chairman Ben Bernake trying to bail these companies out, others are suggesting maybe Ben is the one who should bail:

Federal Reserve Chairman Ben Bernanke should resign and the Fed should be abolished as a way to boost the falling dollar and speed up the recovery of the U.S. economy, investor Jim Rogers, CEO of Rogers Holdings, told CNBC Europe Wednesday. Read more

I went to the Millionaire Mind intensive a few years back and did not get past the first day. But since then I’ve been on the mailing list. This week I got yet another plea for volunteers for an upcoming Millionaire Mind event.

Why do they need volunteers? It is a for-profit business, after all. I realize that the events are “free” but they make oodles off of the sales of books, CDs, t-shirts, and training programs. Read more

Did you know that one of the major causes of the mortgage meltdown has been home buyers “fudging” their income on their loan docs, with the help of certain mortgage brokers? There has been such an epidemic that a new term has been coined: the liar loan. Lying on your home loan isn’t the same thing as lying on your online dating profile: It is a federal offense with a potential fine of up to $1 million or 30 years in prison.

Banks are now tightening up their lending standards; don’t expect to be able to get a liar’s loan anytime soon now.

I’m sorry to be posting more bad news here but we need to be aware and vigilant. I’m not an economist, but I don’t think anyone needs to be to see that something looks terribly wrong on the graphs on this page:

US Banking System Teetering on the Brink of Collapse

I, more than anyone, understand that sometimes things happen that are outside your control and hit your finances. In my case, it was illness. And yet, as you read more and more articles on the housing bust, it’s clear that a lot of people don’t want to take responsibility for their own poor financial choices. Read more

Individual families may be excited to be getting a few extra hundred dollars back from the IRS this summer, thanks to an economic “stimulus” package passed by what appears to be a desperate government…but will it help in the long run? An article in the Los Angeles Times suggests that we’ll need to do more than put a few band-aids on the problem:

“People are going to have to buckle up their seat belts and expect some dicey economic times for much of the year,” said William Grenier, chief investment officer at UMBS Management, a $12-billion asset management firm in Kansas City, Mo. “We’re going to have to let the excesses wash out of the system.” Read more

OK, blessed new age people, please don’t get freaked out because I’m discussing a negative here…but since I don’t believe in the Law of Attraction I don’t think talking about something is going to make it happen. Actually, I think sticking your head in the sand is more likely to make a bad thing happen.

So let’s talk about the American economy for a moment. I’ve been doing a lot of reading on the subject lately and quite a few people are predicting more than just a recession, but an actual depression, the likes of which we have never seen before. Why? Read more