There have been times in the past few weeks when the nightly news has seemed like a bad spy movie involving the collapse of the world economy while bad guys discuss world domination from exotic locations. As such, sometimes what we see happening on the news will seem disconnected from the everyday life we live.
This week, we got a very gentle reminder, that what we see on the news, isn't all that far away.
Here on California Avenue, we've been noticing a steady decline in the day-to-day foot traffic between the various cafe's and hair salons. Several of the restaurant owners have also mentioned a decline in patronage.
On the news lately, there has been talk about the governments proposal to buy up "Short Term" or "Commercial" Paper, or the ability of small businesses and banks to borrow relatively small amounts of money from each other for short periods of time. Things like this are quite literally the grease in the wheels of our economic engine.
Our Payroll at KSP, like that of so many other companies, is handled by an independent payroll management company, which is a company that is associated with, but independent from our bank. This company facilitates the transfer of funds from the company savings account, into the company payroll account and into the various direct deposit accounts of the individual employees.
We had a hicup.
The official story is that they had a trainee managing our account.
What seems far more likely to me, is a failure of "short term paper".
Two days later, and after a lot of controlled panic in our office, the funds are moving.
Looking back now, I have had days in the past, where my money was managed not day by day, but hour by hour. I would write checks with the hope, simple hope, that a deposit will have cleared by two o'clock. My rent checks would be written with the faith that my landlord wouldn't cash them until the second tuesday of the month. Keeping my dishes in the air was an art-form. That was economy of faith, and it was primed for disaster.
As we learn to maintain the balancing act of weak economies, we become overconfident, and eventually we lose track of one or more of the "Flying Dishes" that comprise our finances.
Eventually, I was able to grow my financial profile to the point where I wasn't living hand to mouth anymore, and a day or two of economic uncertainty doesn't scare me. Those days are far behind me. But it does give me pause...