It was so cold Tuesday morning that I almost put on long underwear. I didn’t, but as I was walking the dog, I wished I had. It wasn’t the cold or the snow so much as it was the wind. The chickens agreed. Only two of them ventured out of their coop. Their water had frozen solid overnight; it was one of those days when I had to give them warm water again in the late afternoon.
The house was 63 degrees when my wife awoke, so she re-started the basement wood stove and lit a fire in the upstairs fireplace insert as well. We’ve been feeding oak into their burning maws at regular intervals, burning firewood quite a bit faster than we had for the past month.
Our only errand of the day and it was canceled due to snow. Hanging around the house, unshowered, it felt like a weekend. I wished I had slept later.
Who knew it would be colder on March 14 than it would on February 14? And it looks to be colder still on the 15th, which snow off-and-on throughout the day.
Like our banking system, it seems the weather has taken a turn for the worst in just 48 hours. The daffodils have keeled over. The bees are clustered together in their hives. About the only good I can see that might come of it is some yellow jacket queens that emerged from hibernation might die.
Oh well, things could be worse; I could live in California. Or, as a little voice inside my head reminds me, I could live in Ukraine.
Spring will Return, but Banking may not Recover
I have confidence that spring will return. If the daffodils don’t recover, something else will bloom before long.
I’m not so sure about the banking sector or our economy as a whole. The same fear of contagion that has killed three banks already is driving depositors at small and medium banks to transfer funds to the top six banks, all of which are deemed “too big to fail.” This, and the 100 percent bail out of depositors, will have lasting repercussions.
One side effect of the bank failures is that the Fed may slow down or hold off on raising interest rates. In other words, they will cave in or fold. That will delay the onset of a recession, but it will also keep inflation high, which isn’t good for any of us. Worse yet, they may decide to start some kind of quantitative easing program. That will act like a drug that makes us all feel better while masking the real problem. It will also artificially inflate some more balloons, and when they pop, we will just have further to fall.
I’m looking forward to spring. If only I could say the same about what the financial markets will bring us, but I don’t think there’s an easy way out of this predicament. Eventually, the bill comes due, and I suspect we’re going to be paying it sooner rather than later.