b2 gurus | business news

Hello, this is your captain speaking, flight 101 appears to be having some technical difficulties, please do not panic, and SCREW everybody else over. Well, I am not really a captain, but with all the panic and fear in the markets this week, I really hope the public can keep their pants on. McDonalds salmonella scare, the sell-off of Lehman Bros, rising energy costs - rising unemployment - Maybe Buffett’s prediction is coming true ……

A long recession? At least 5 years, ughhh! Well, maybe when I graduate from university, it will be the next Golden Age, with the sun shining bright, and the birds chirping, (you get the picture). But for all the regular folks out there, why shouldn’t they worry. Well this recession, or market adjustment, provides many opportunities. I had the honor of meeting inspiring billionaire, - Mr. Micheal Lee-Chin, aka the ROM crystal man (he provided the capital for it), anyways I remember a quote he would always say, “In crisis, there is opportunity.” So don’t panic, do some math, and find some undervalued stocks. Over the next few weeks, I will be digging deep.

So do not panic, don’t go and sell everything and then hide that money under your mattress, that is not going to help. In a recession, even when prices are deflating, we need to buy! BUY! and BUY! IF our economy wants to stay afloat. So what would be an innovative way to improve our economy? In economics, I am currently learning about the money supply, aggregate demand and all that. The soaring of energy prices in the 70s and the salvation of the microprocessor. How does this all tie together to today?

Well, when energy prices go up, your aggregate supply curve shifts left, unemployment and inflation rise. To shift it outwards positively towards the holy grail of economics, you need either technological advancements, capital manipulation (interest rates), or new discoveries of resource supplies. These are the most common three. During the 70s, the microprocessor (new technology) increased efficiency, decreased labor time, and shifted aggregate supply right. In the graph, you can see that unemployment dropped, and inflation dropped as well. What we need today, is some new technology as well, because those interest rates are just not working. Maybe one day, we will have nuclear fusion. I think that will be the answer to all of today’s problems.

Well, back to the summary, the sell-off of Lehman Bros. should have been forseen. It was one of the highest shorted stocks on the markets. So down these banks tumble, unguided, and uncentralized. Good thing up here in Canada, everything is controlled. I always thought government intervention was horrible, until I learned of the numbers of bank bankruptcies, compared between USA and Canada. Quite staggering. Maybe Obama can change that. Maybe he can turn everything around. But for now, everyone can only hope, and try not to panic, and jump off the plane, because who knows…

Meanwhile, watch this quick video about some of the places where you can put your money.