OMG we are all not totally fucked. Calm down.

Since I work in Finance, many friends, relatives and acquaintances routinely (for better or worse) ask my opinion on this whole financial crisis that we happen to be in the middle of. I'd like to use this forum to address this issue as calmly as possible.

First of all, chill the fuck out. We are in a recession, which is a normal part of the business cycle. Currently unemployment is around 6% which means that 94% of Americans who want jobs have them. Also, banks are still lending.

But wait the stock market is plunging! Before you jump, please do your homework and realize that the stock market is by nature volatile (meaning it goes up and down all the time), is governed by the wisdom of the masses and goes tends to go up over the LONG TERM. If you invested x dollars at x point in time, good work, because investing is the best way to build wealth over the long term. If you put a disproportionate amount of capital into one investment (like Bear, Freddie, AIG, etc) and have seen unpredicted (read: horrendous) short term returns, you have done a poor job of managing risk via diversification.

Which brings me to my main point: we got into this mess by people who did not understand (or willingly refused to acknowledge) the risks they were taking:

Borrowers, Lenders, Brokers, and Investment Bankers are all guiltly of these misguided assumptions (housing will not decline in value, borrower x's income will increase in time to make higher payment upon rate resets, defaults will not exceed x percentage of this MBS issue, etc, etc).

In times of crisis everyone tends to do what they always do: seek an easy answer to a complex problem.

1. Quick, find a scapegoat to blame (mortgage brokers pushed unaffordable products to people who willingly purchased them! CEO x made lots of money and did not accurately forecast an event that no one else forecast!).

2. Villify him/her so I do not have to think too much about a complex regulatory framework, boring housing policy or why Americans seek so hard to keep up with the Jones by purchasing McMansions they could not afford!

3. Please let me get back to getting rich quick (without actually creating value) by flipping houses using poorly underwritten mortgages.