September madness

Finally, a picture we can all understand that explains all this financial upheaval...

thanks melissa...

The end of life as we know it...

Well, we knew this was all coming, didn’t we? Are we surprised? Shocked?

What in the heck do we call this thing? A financial debacle? Wall Street crisis? Credit card cave-in? Home mortgage wreckage? The end of life as we know it?

Whatever it’s called it’s long overdue, as inevitable as the rising sun. But what I’m finding rather despicable about the whole thing is the finger pointing. Who’s to blame for this mess? Last night, meandering through the Memphis airport, I caught a quick glimpse of a TV screen, and some jamoke was blaming this whole mess on some law that was passed back in the eighties that, he was postulating, twisted banks’ arms and forced them to loan money to poor people who couldn’t get loans in the first place. Nice try. Blame it on poor people. Especially, in this case, poor non-whites.

I think we’re all to blame in this one, don’t you think? We’re talking greed on a colossal level. Biblical proportions.

American’s standard of living was off the map. Sure, people were taking out home loans that they couldn’t afford. Or maybe they thought they could afford. Variable interest loans, balloon loans, all those financial instruments all those wizards on Wall Street were throwing together gave people some hope. Maybe times weren’t good for people at the time, but in five years they threw the dice hoping things being better. Anyone who bought a house in the inflated housing market in the last fifteen years knows darn well at some point the real estate agent they were working with would say that their financial guy could “make this work,”—this being the deal, closing on the house. So people were overextending themselves, and they shouldn’t have put themselves in that position. But at the bottom of all that wasn’t so much greed as it was just wanting a piece of the American dream. A home they could call their own.

While it seems there were those who were just hoping to hang onto their homes—these were the poor the guy on the TV was blaming—there also were those who had homes with plenty of equity in them and the owners just drilled that equity like they were drilling for oil, double and triple-mortgaging their homes so they could buy all the stuff to fill that big MacMansion and bankroll a lifestyle that was way beyond their means.

In the housing market though, a good solid amount of that blame goes on the banks, who were supposed to evaluate and manage risk. You can’t tell me there’s a bank in this world that would risk the way they did if it weren’t for Wall Street coming up with all these ways to package all this bad debt and unload it on someone else.

It seems to me from what I’ve seen of the people in my own life, the blame for the credit card debt seems to fall the same way. There are people who just spent, spent, spent, laying down the plastic for the big-ass flat screen TV or vacation to Cancun, and there were people who actually needed the plastic to get buy, paying utility bills and gas and groceries, just getting by month to month. For both types of people, they just robbed Peter to pay Paul, maxing out one credit card, then applying for another and either transferring the debt to a card with a lower rate, or just filling that one up, too.

To me, it seems the farther up the ladder you go the greater the blame until you reach Wall Street and the halls of government. Wall Street—the experts who knew this all was bogus, were reaping the benefits on a level that none of us could imagine. And Washington, meaning Congress and the Fed and President Bush himself, who was joining the us all by borrowing money from China to play out his war in Iraq, knew this was destroying the country but didn’t nothing.

I, like most people, am scared out of my mind. I’ve been working for the past two years to completely eliminate any debt I have. I’m close. It’s a good feeling. I live within my means, and if I don’t have the money in my pocket to buy something, well, it simply means I can’t afford it and I go without.

Yes, right now I’m typing these words on a plane, coming home from a trip that we saved for. There was a lot of things we did without to finance this trip, and we did a lot of it on a shoestring. I don’t feel an ounce of guilt enjoying something that we worked damn hard to have. We like to travel, and that’s what we put our money towards.

And what’s ironic is that we flew to Austin on Northwest that was hurting and realigned its business and one way it did that was buying smaller, more fuel-efficient planes. And all four planes we flew on on this trip were built, not in Seattle by Boeing or Lockheed but in Brazil. When did Brazil pass up the United States in airplane manufacturing? I’ll tell you: It was right about the time the United States tried making money by selling bad debt instead of making good products, that’s when.

There was a point in my life where things were tough, and I was using my credit cards simply to live. Pay the oil bill. Pay for the phone. Pay for the Internet connection that I used for work. Pay for groceries. I pulled a lot of money out of my 401k, figuring the substantial hit I paid in penalties was still better than stretching out payments with high interest rates. I lived on a lot of rice and Ramon. That’s what I’m still paying off now, and I’ll tell you, Citibank, Amex, and all the rest weren’t sympathetic to me. They didn’t bail me out. Nor would they negotiate a lower rate even as I showed progress paying off the debt.

And I don’t want to go back to that. I’m worried right now that the money we make won’t be worth anything. That a bag of groceries will cost $100. Jobs will be scarce. Life will get so hard that people will start taking it out on each other. And maybe in the end, that’s the lesson learned here. We’re all to blame for this, some more, some less.

Does anyone even get this financial crisis?

Does anybody really get this? I mean, any of us here in our cubes, down on the street, driving around in our cars, sucking up that expensive gasoline?

Or has the world really spun out of control? People swapping debt? Bad mortgage payments? No one in their right in the real world would pay good money for something that wasn't worth something. Would you buy and old beat-to-shit car for $20,000?

It such a grand scale--hundreds and hundreds of billions of dollars--and excuse me, but previously, these kinds of numbers were only bandied about in terms of the universe and light years--we are now putting a dollar sign in front of them and we're all supposed to just not blink?

People are scared, and our government and the governments around the world are scrambling. No sorry, this is the government's fault. Don't tell me it's the person who took on the bad mortgage then defaulted. Don't tell me it's the poor person who just wanted a house. Nobody forced that person to sign that loan. Oh, please. Some poor schmuck just wanted a house. The bank never should have agreed to that mortgage in the first place. What ever happened to the bank managing risk? There's where the failure in responsibility took place. But they sold zillions (I guess we can start using that word without a lot of hyperbole, can't we?) of crap mortgages then they sold those mortgages (who would buy that shit??) to insurance companies and banks and investment houses.

What the hell ever happened to investing in strong industries? In something you can actually pick up with your hands and look at and say, hey, that's pretty good?

And banks are raising their hands telling people not to pull their money out of the bank, like they did during the great crash of '29. Anybody remember that? No, I don't either. I'm not that fucking old, but I did and do read history so I know about it. Doesn't anyone else read?

It won't make any difference if you pull that money out, because then all you'll have is green paper in your hands. Soon, a can of beans will be worth more than the money in your hands. You'll be able to barter what you've got for awhile. See, that paper is just a loan, too...a pretty piece of paper that we trust the U.S. Treasury will honor if we go up to the U.S. Treasury and say I want to cash this in for gold.

So the U.S. Government is spreading dollars around the world, and I don't quite get what that will do, but in essence it's $247 billion--$247,000,000,000 just so you can take a good look at that. If you really want to have some fun, subtract your yearly income from that number, and you'll start getting an idea of the scale we're talking about. This ain't comparable to some young kid overextending a few credit cards or a family of four double mortgaging a house that ain't worth it's value, although oddly, deep down, this is the cause.

The cause is greed on a worldwide scale. It's some middle-class family living way beyond its means to finance SUVs and big screen TVs. It's lower-middle class families stretching themselves too thin to buy a piece of the American dream and waking up one day to find out it's an American nightmare. It's the fattest cats of all feeding at the hog trough of Wall Street.

We're all in this together, and funny, it's so obvious that neither of the presidential candidates understand a fig of what's happening. Maybe Sarah Palin can hop on her snowmobile figure this out for us.