Ouch

We woke up this morning to news that the stock market took a huge dive yesterday.

Ouch.

It was a heavy drop. As they said on the "Today" show, the party is over.

Now, of course, me being the person that I am, I want to know why. I listen to this financial commentator and that money magician on television and all I hear is some nonsensical foreign language.

Sure, finance is not my thing. But I do like to think that I at least have some common sense.

So let's try to figure this thing out. Right here, live on the blog, just spilling thoughts out of my head onto the computer.

What caused this mess?

Well I'm a simple guy. So I try to understand things in simple, basic ways.

Trying to look at this picture best that I can, I can only conclude that we've created our own demise through debt, nationalizing business and finance structures, and greed.

First there is debt. Americans love to run up debt and every year it seems to get worse and worse. And banks and mortgage companies love to help Americans run up debt, evidently without a concern on whether this debt could be paid back or not. Homes and cars that people can't afford, sooner or later that bubble is just going to burst. And it did burst, suddenly the financial institutions realized they weren't being paid because people could not longer afford to pay and it all started to fall apart from there.

I'm trying to keep it simple, because I'm simple. If you own a shrimp boat. And you hand out all your shrimp to local restaurants on good faith that they will pay you back. When they don't pay you back - you're out of business.

Second there is nationaliziing business and finance structures. Now I'm talking about the Wal-Mart factor, the nationalizing of everything. To keep it in simple terms, if you have five boards to stand on and two go bad, you're in trouble. If you have 5,000 boards to stand on and two go bad, you've still got good footing.

The spider who weaves a dozen little webs is less at risk than the spider who weaves one big one.

Well almost everything has been nationalized by now. So when something goes wrong it has a national effect, everyone feels it. If finance was truly diversified we'd have small economic markets across the United States. But everything has been bought out to the point where we only have a few boards to stand on.

Third there is the general evils of greed.

We live in a day and an age where our most valuable resource is entertainment. It is our largest export to other countries. Our icons are movie stars and musicians. We flock to the tv and the internet to hear and see their luxurious lifestyles. Then we try to create those lifestyles for ourselves.

Jay Leno owns so many cars that he rents a hangar at the LA airport to store them.

In my career I've gotten a chance to work with some very wealthy people. I'm talking very wealthy here, full indoor basketball courts in their house kind of people. They all shared one distinctive feature in common - greed.

Once my Uncle took me sailing out through the "creek" to the Chesapeake Bay. As we passed this HUGE mansion on the water, with three garages on the water for boats, my Uncle caught me staring at it all and said, "Jim, you don't get that rich living an honest life."

I've always remembered that, and from my perspective he was absolutely right.

So, in my simple mind, we have to overcome our lives of debt, bring back the village concept of economics, and fight our need for greed and materialism.

Well this could take awhile . . .

By the way, I do have money invested through Merrill Lynch, exactly the kind of giant I speak about. So I'm guilty under my theories too. Interestingly enough I set-up a little test on CNN Money and created a fake portfolio where I picked companies I believed in, most were local companies. My little fake portfolio is doing much, much, much better this year than my real Merrill Lynch account. Hmmmmmm . . .