The current economic climate has many of our borrowers worried and many of us may be in that boat as well. It is very easy to let the media get in your head. They will twist words, exaggerate and spin the column to best make a story. That is the job of a great journalist. To evoke emotion from your reader means that you struck a chord. However, with the bailout news and the state of the economy it may be wise to take a note from a book called The Four Agreements which calls you to "be impeccable with your word." Negative thoughts bring about panic, stress and irrational decisions that are based on emotion and not logic. Buyers are worried about whether they can get financing and thinking that now is a bad time to buy. The truth is we want to gobble up assets while they are cheap. If you are investing for the long term there really would not be a better time. Currently, we are divided on what measures we need to take to get the ship sailing in the right direction again.
The votes for the Bailout were nearly split down the middle. I know there are a lot of Homeowners out there that have lost significant equity and are still paying there mortgage and do not want to have to pay for those that made bad decisions. Greed was the creator of the crisis and that is another topic. We have to right the ship and we have little time to argue what will be the ultimate solution. We either continue to stay where we are at (little liquidity, demise of banks, low consumer confidence, tight consumer lending and little money to circle but that poses many problems). The job market is different today than in the past. We are in the information age and there are many more entrepreneurs. The small business owners are barely making it. Ex: A pre-school is being started(maybe at an inopportune time) that has 15 kids and a great teacher, These kids really learn and the school needs 50K to finish the structures and complete the design. The teacher has an impeccable track record, credit, and husband has a great job. Easy 7A SBA loan in the past not happening so the kids are stuck in a half built school. The money is not moving and as long as that is happening neither will the economy. It is time that we pay forward our blessings and give a little to get something in return. Maybe it isn't? History shows that we do this again and again and each time we say it is the worst ever. Today I read an article that discussed the 70's Inflation fight that led to the late 70's housing boom. It also mentioned the 80's and the seventeen percent mortgages and the questioning of Capitalism, the crash in 1987, high anxiety global concerns of the early 90's, and the dot.com era etc. Each time we have pulled out only to make another critical move that led to Greed which in turn caused a collapse.
Swaying Bi-partisan votes in the same direction is difficult at best. There is little that two sides ever agree on in totality. If there was there would not be two parties. The idea for the stable to pay it forward to the less fortunate right here in America seems to me alot like all the work that we have done over the years in other countries. We seem so willing to send our money elsewhere to create a presence or dominance but we forget to drop it right here in our backyards when necessary. We battle it. Case in point: last week at the Auburn MLS meeting in California we were arguing about whether we should send $1000 to Texas for "IKE" relief or give it to our local salvation army whose head count they feed doubled in the last 60 days. Whether local or National we want to help but in some cases we might direct the money the wrong direction.
One of the arguments against the bailout was increasing the debt. This is always funny to me because we have no problem asking Lawyers, Nurses, Doctors and all the others to go into debt getting student loans so that they may get a job serving the public. Is this not debt that would serve the public as a whole? It may even allow some of the Doctors and Lawyers to get a student loan and go to school??? Student loans are an investment into the future of that person and all they get to serve. This Bailout is an investment in our future and all that we serve as a society including those that are abroad that we help so often. Let's not forget that it would be a government investment that if they held long enough would pay them back.
We will get out of this and then in the next 10-20 years we will go through something again. The world is evolving fast globally. It is growing faster than we probably wanted when we pushed for Globalization in the first place. The main reason that we will go through this again is Greed and the lack of financial education that is taught to our youth. I pray that we will begin to find value in teaching children about credit, debt, assets, liabilities etc. I know that I would have loved to have learned about it. My education has been learned from trial and error most of which has been error. I should be in a great position but I am not. My income grew six figures a year for three years and has dropped the same in three years. That is a lot of change fast. I was Ignorant and can only blame myself for that. However, there has been a lot of good that has come from the roller coaster I rode.
It is a must that we do something to begin to correct our economy and I am confident we will. The question remains is what preventative measures will we take to avoid similar problems in the future. I hope that we strongly look at the title of this blog and learn that United We Stand and Divided We Fall.
By the Way did I tell you all that loans are available and we are funding them all the time. I received several emails and calls from clients asking if they were still OK if they found the home that they want.
This was written not to irritate or infuriate anyone nor does it imply my position politically or my stance on the bailout. I just know that we have to take some action and fast. Hope that this was thought provoking for you.
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