Monday, March 31, 2008
Friday, March 28, 2008
Monday, March 24, 2008
Sunday, March 23, 2008
These times with their continual mostly-negative economic news seem to be increasing the stress level of many people I meet. I see it in my office among the agents and support staff and among my friends. Of course, I have little contact with younger people who are generally idealistic and who don't remember those halcyon days, nor do I fraternize with the religious who are gladdened by what may be viewed as the approaching of the end of days. There may still be joy in Mudville, but I don't sense it anywhere in my community.
What does a person do then to be happy? In the past it was often suggested that one avoid reading the newspaper or that one shouldn't study the Dismal Science, Economics. Instead, it is good to immerse oneself in other activities like art, science, light reading, travel, gardening, or community service. Then there was always sports, television or religion to take one's mind off of life's exigencies.
For me, blogging has become such a diversion. It is creative, self-absorbing and it doesn't really cost anything. I have even developed contact with others who I have met through this venue. Today it is pouring rain.. What do you expect? It is March and I live on the Oregon Coast. It is a good day to stay indoors around the non-existent, and if I had one, energy-inefficient fireplace. It is not gardening weather and I don't have to drive through traffic to Home Depot to buy an expensive bag of manure. No camping or fishing trip is in order either, thus I don't have to be depressed by crowds, noise, parking fees, license fees, costly supplies or $4.00 gasoline. Here I am in front of the screen, in tune with my voice, away from it all, enriched by my creativity and completely distracted from the big, bad world. Whoops, there goes my cellphone. Lee
Tuesday, March 18, 2008
Today I feel the burden of responsibility more than at any other time in my life. Not only because I am a student of history do I have a sense of concern, but also as a sixty-two year old, do I tend to look with less optimism at life than I did as a younger man when death was so far in the distance and when I knew less of the human condition. All that being said, what do I do and what do I say to those around me for whom I have a sense of responsibility and leadership?
It is easy to say that it is fun and interesting to sit on the sidelines and watch those in power do their best to right the ship in order to avoid a Depression or worse events, since there is little else to do because it is beyond the little man's control. It is easy to prognosticate what could have been done or what should be done on economic subjects that are so complex and beyond my understanding. Watching and waiting, or ignoring and hoping is what a cow might do with its life, especially when it is already at the stockyard.
Using one of my sister's favorite expressions, it is a good idea to be proactive. She may have learned this concept at a young age growing up in our family. She learned how our father smelled the dangers of Naziism and took steps to engineer the moving of our extended family out of harm's way. This was a time when many others just watched the events unfold, ever hopeful, and then were ultimately led to the slaughterhouse. Now I am not saying I think that disaster is imminent, it is just that survival in nature requires insight, cunning, and luck. Those who fail to recognize that and depend on passivity and faith, religiously perish. I do not have a list of suggestions for those who matter to me. Is it time to buy Euros, invest in foreclosures, pay off debt, stockpile vegetables, or buy a gun with plenty of bullets?
All I know is that the air smells differently, the problems seem almost insoluble. Even though there are short-term aids, the leadership seems frightened of an impending storm, and that scares me. I know there is always a crack in the fence for those who look for it. The question for me today is whether there is a safe haven. It wasn't simple for my father to choose and plan a new life in America for his family. He had the strength to plan. I wonder today whether the direction for myself and those I care about is to think about planning. There is an old expression, "Either moo or move." Lee
Monday, March 10, 2008
Then I read Blanche Evans' March 7th article in Realty Times which listed the opinions of reputable housing crisis prognosticators. For the most part, the article described a grim picture and an ominous future with references to the Great Depression of 1929. Other than a few geographical exceptions, real estate was overvalued throughout America and due for a great correction, the most overvalued location, Bend Oregon, from where I am writing today. Likewise, new construction was due for a big hit as well, with sales according to NAHB to be off 22%. With such dire predictions, I went into survival mode and decided to reread passages from a favorite college text of mine, William Leuchtenberg's Perils of Prosperity hoping to find a better understanding of how to survive financially in the wake of crisis. Likewise I reviewed the events of the Panic and subsequent depression of 1893-1897. The same theme reoccured. Poor financial planning, deficit spending and amazing greed spelled the demise for millions of people who had little direct involvement or had shared in the blessings of the time.
Of course policymakers today understand the past. Fed chairman Bernanke has repeatedly confirmed his commitment to do whatever is necessary to prevent the downward spiral of housing, which could lead to massive unemployment and fortunes lost.
What seems to be the best hope for avoiding a catastrophe is creating the spin that the worst is over. We have hit bottom, and that this is really a great time to buy. In this way consumer confidence is bolstered and the trend is reversed. Banks make lending easier, FHA bails out subprime loans, and investors are given incentives to back real estate securities and, like the post depression song, happy days are here again.
Alexander Pope in Essays of Man wrote, "Hope springs eternal in the human breast, Man never is, but always to be blest." It seems like fabricating optimism in our world of great marketing is a preferable alternative to turn the economic tide than participating in some new war. Many argue that the Spanish-Ameican War was our saving grace in 1897 and that the beligerencies in Europe and WW2 did more to resolve the Great Depression than all of FDR's New Deal.
There is a lot to say for optimism. Scientists have even isolated a place in the brain where optimism resides. I have more confidence in it today than in political solutions. Give Pope, poetry and the spin doctors a go at it. What's there to lose?! Lee
Wednesday, March 05, 2008
Monday, March 03, 2008
Sunday, March 02, 2008
This week I read several articles about scams as a result of the housing crisis. The first concerned itself with people who preyed on distressed homeowners by offering, at a fee, to negotiate with the lender to save the property from foreclosure. In the end, some homeowners either lost the property anyway or were milked for a service which could have been done for free with a simple phone call to the lender. In some cases the scammer actually ended up with the deed.
Likewise I enjoyed an article by Ralph Roberts, a renowned real estate agent and author, who listed a series of new and innovative ways in which sellers were funneling money back to buyers in order put home purchases together without regard to lender disclosure or, in some cases, state regulations. The result was that some people were able to buy homes who otherwise couldn't qualify, but the lender was duped. It is easy to take the high moral ground against such activities in which allegedly innocent parties are duped. Yet, it is worth mentioning, people are continuously taken advantage of legally as well. What is to be said to those people lured by flowery letters offering teaser interest rates on loans, especially on credit cards, and then later shocked when the small print of a subsequent letter revealed that the borrower was now subject to usurious rates? Were these people not also, to some degree, scammed? Of course those with power rationalize that such loan offers are a result of good marketing and included full disclosure. In fact, the product offered even fulfilled a demand in the marketplace. Such actions are viewed as good business, whereas other similar actions outside the legal system are considered sneaky and a scam. These devious ideas can be refined and often become legal once those in power find a way to make a buck on the idea.
It is difficult to sort out the knights from the dragons, the innocent from the guilty, the gullible from the stupid. This economic time is really no different from any other. Perhaps this housing crisis reminds us, in some poignant way, that there have always been those that are fed snake oil and those that feed it. Like the barker at the sideshow says, "Step right up, ladies and gents, see for yourselves." Lee