High-Stakes Musical Chairs
A brief commentary on our financial crisis, by the Mr.
Dana and I got married at the height of the housing boom in 2004. Immediately, we explored the possibility of buying a home before it was too late. After looking at the numbers closely, and in spite our dual incomes, we decided it would be foolish to buy something we might have a hard time paying for. On top of that, we were worried that Southern California was experiencing a bubble, in which case we’d be buying a property that would turn upside-down on us. Left and right, houses and condos continued to sell as if there was a 21st century land rush taking place.
Condos were going for a half a million, starter homes for ¾ of a million. “For Sale” signs were being taken down faster than it took to put them up. You literally couldn’t save money fast enough to keep up with appreciation. For a while, we felt like the train had left town without us.
Four years later, we’re glad we didn’t fall for the housing craze that was taking place in SoCal. But in the greatest irony I can fathom, we now find ourselves footing the bill for irresponsible lenders and borrowers, as the Fed picks and chooses which firms get tax funds for a bailout. We’re in the middle of a nation-wide Enron-esque crisis, only this time there isn’t a Ken Lay or Jeff Skilling to point the finger to. Congress is pointing to the White House. The White House is pointing to predatory lenders. There are too many guilty parties for the media to latch onto the villains. The answer, as usual, is to lay the burden on the backs of the American tax payer. The music has stopped, and we’re the ones without a chair. And all I can do at this point is kick and scream and stand off to the side while the rest of the players play it out.
To finish on a higher note, those of us that have come out relatively unscathed might see some unique opportunities in the coming years. Our economy isn’t going to collapse, and for at least a few years we should see marked-down prices on homes and stocks. Live within your means, save some money on the side, and keep an eye out for a deal near you. Because we all know that this is never the reality:
4 comments:
Amen Case! We to thought we had missed it. And now I am very happy in my little aparment looking forward to 2 more years of it so that when the time comes we will be ready.
Dude -- you are wrong. There is a money tree growing in my backyard as I type this. (Kidding -- nice post.)
Man, I could write about this for hours!! Let those who are responsible suffer the consequences. If you couldn't afford your house, you'll lose it. If your business can't make its debt payments, you'll go out of business. Argh.
Eric
Right On Casey!!
The mortgage crisis and the current economic turmoil is a direct result of the Federal Reserve's artificial lowering of interest rates--which spurred major banks and other corporations to back bad mortgages.--With each new bailout, you are forced to take on the liabilities of Wall Street, all while the value of your paycheck decreases due to the inflationary policies of the Federal Reserve. They say that $700 billion will be tied up in non-productive use--that amount of money in the private sector could be used to research new technologies, start small businesses that create thousands of jobs, or upgrade vital infrastructure. Instead that money will be siphoned off into unproductive assets which will burden the government for years to come.-----------Ok Ok, I'll jump off the soapbox! :)
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