I had a ringside seat in the banking industry, so I had been able to predict this economic collapse. I did tell colleagues and clients that the sky was falling, but since I wasn’t really ‘anyone’, nobody really listened:

Businesses from different industries had begun calling me short of cash, needing $500,000 to $1,000,000. They were suddenly required to pay for inventory and other essentials more quickly than usual. Their own bills were due 14 days sooner, while their customers were taking 30 days longer to pay them. 

Intrigued, I looked up Bank of America & Citibank balance sheets online. I could discern that this seemingly small change in small business operating terms would put 10% of the weakest companies out of business in 120 days, the next 10% within a year, and the next 10% less than two years. The domino effect was going to be across the board; it was setting up as the perfect economic storm. Many Americans would not realize this for nine months, and then it would be too late…It still raises the hair on the back of my neck when I tell this story. You see, on a loan balance sheet, when you subtract 10% off the asset side of the B of A balance sheet, it wipes out ALL the equity. It puts them out of business. I believed I could see the whole banking industry going down. Citibank stock was going to go from $50/share to $5/share; it actually plummeted to $1.00.  I thought the stock market, which was then at 14,000, would drop to 6,000; it really dropped to 7,000.  Because the Federal Reserve could not allow so many companies to go out of business, I predicted the interest rates were going to plummet from a prime of 8.25% in one year to 3.5%; it actually fell to 3.25%.  The reason the Fed could not allow so many failing business to shock the economic system is because all of the people who were about to lose their jobs would seek unemployment. Unemployment and government assistance, when the nation overall was already at or near bankruptcy? I think you can see why it’s so important to restructure the banking industry to serve small businesses better.  

If a small business lender with 35 years experience of helping create jobs in all types of businesses could predict this, why didn’t the wizards of Wall Street sound the alarm?  They were too busy quietly removing their money as fast as they could, to let the little guys take the fall; it was in their interest to keep quiet. This resulted in a $7 Trillion bailout. We’ll be paying for this for a long time. And it is for this type of management that companies such as Goldman Sachs retain banking status and get to be bailed out?

This pattern continues to repeat. We are near the brink again. It’s time for us to take each other’s hands, all 300 million of us. We need to REDEEM THE DREAM, because time is short. I am reaching out now: please Take My Hand!