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10/11/10

Deleveraging and Insolvency

The Real Estate and Mortgage Foreclosure problem is unresolved...

Unwinding will take years but we can rise above while resolution is occurring.

It seems to me that if the major banks and mortgage companies are placing moratoriums on foreclosures due to affidavit and auditing problems on tens of thousands of foreclosures already processed, the problem must be deeper than currently being admitted. Truth is bubbling to the surface. The banks and mortgage companies have been trying to get out of these loans as quickly as they got into them, without proper procedures, due diligence and documentation. Rationally, this situation will take years to unwind and cannot be sped up no matter how much financial institutions and the government try to force the process. The implications cannot be understated.

Essentially this quagmire throws the entire real estate industry into chaos and ultimately threatens the entire financial and banking system. The mortgage business as we know it will require an overhaul, at the very least. I don't think it is at all dramatic to state this, only time will tell exactly how it plays out. In the long term I'm not sure it's a bad thing, it is an opportunity to reshape these businesses back into more natural and free markets. There is plenty of blame to go around that can be affixed later, the important thing now is to fix the problem. The big players have been gambling on a fantasy accounting game for several years now, where everyone pretended that houses and commercial property were still worth in real life what was owed to the lenders on paper. The reality is that gap makes the lenders insolvent.

As the slang saying goes: "Da Nile isn't just a river in Egypt."

Now is truth telling time and recognition that there can be no further delay in dealing with the substantial readjustment of the value of what real estate, and subsequently other property and currency, is factually worth. This is a tough, difficult process that a lot of people are not prepared for but the longer it is delayed, the more pain there will be when it inevitably reaches a coda.

It is the end of the world as we knew it but not the end of the world, rather the beginning of a new one. History has many examples of such periods and humanity always rises to the occasion. I wouldn't paint a pretty picture on the heartache and burn this will cause a lot of people nor would I say that it will be impossible to work through it. How we face up to the situation as a people and endure while grappling with the problem will be a testament to our character as a country. I believe there are enough people with the mettle to forge a path for all of us to get through and rise above what difficulties may come.

Urban Landscape

Real Estate Mirage...


"Affordable Rental Housing for Arizona's Working Families"

10/9/10

Music Break: Janis Joplin

Ball and Chain...


Monterey Pop Festival 1967

http://www.youtube.com/watch?v=jhBFRNBxT_o

Quote of the Day: William Somerset Maugham

Never settle for less...

"It's a funny thing about life; if you refuse to accept anything but the best, you very often get it."

William Somerset Maugham
Playwright, novelist and short story writer

Boomers

We overwhelm in sheer numbers...

In my lifetime, things seemed a whole lot more real and simpler to me before Disco and the TV show "Dallas" came out in the late seventies. After that, the rapidity with which my generation went from counter-establishment cotton wearers to tacky consumerists in polyester, alienated me for decades. Now I'm rather dumbfounded by how my generation seems stuck in a time warp. It's easy to understand why the generations in front and back of us are overwhelmed by our ubiquity.

We can be very boring, in spite of the energy spent by so many into looking and acting young, to stay "relevant." It's a delusion. We don't accept age well, yet we don't age very well because aging gracefully is just not in the repertoire. It's "buy now, pay later" coming home in a very personal way.

There are so many of us, yet I wonder what happened to a lot of my generation. The strongest traits, optimism and enthusiasm for the future, seems to be fading. Many boomers seemed to have disappeared to me, blipped off the radar screen, slipping into lookalike, cookie cutter living oblivion. I think it's because so many didn't change after the age of thirtysomething, reliving their daily lives over and over again in some comfort zone I don't understand. I never could stand still and seem to relate better to people of all ages who don't either.

You're either "in" or you're "out" and I don't mean that in the fashion or sexual preference sense. Rather to me it infers that life is a continuum that you keep learning, growing, moving on and challenging yourself to other things, which changes you as you go along. A lot of boomers are "in" the sense of change and have kept growing and moving on but I don't sense we're the majority. Many boomers are unfortunately "out" now in this era of economic instability and social disruption and I wonder what's going to happen to them as the world moves on to a new way of living.

Urban Landscape

1954: Peak Boom Year...

10/8/10

Music Break: The Bee Gees

New York Mining Disaster 1941


Live 1975

http://www.youtube.com/watch?v=9EU-8xEd8WU

Quote of the Day: Michael Caine

On growing up during WWII in England...

He is unsentimental about the war. "I benefited from it. For a start I ate nothing but organic food for six years. We had no sugar, no biscuits [cookies], fizzy drinks [soda pop]."

Michael Caine
"Tea with the FT: Michael Caine"
FT.com

The Sharpest Tongue

Is usually honed by fear...

Most likely someone who treats other people with disrespect by being abrupt, sarcastic or rude and speaking as if everyone else is an idiot, is in fear of being discovered an idiot themselves. They live in constant angst of their insecurities being discovered and their actions are a defense mechanism to cover up how they really feel about themselves. Which is contrary to the external image and actually an internal hell, a trap they feel they can't get out of.

Generally they are to be avoided if possible, especially on a social level, because they inject nothing but negative energy into any situation and sap useful energy. Sometimes though, such as in work or other groups, they can't be avoided. It's important not to let them intimidate you and buy into their behavior. One approach is to pick one piece of their negative commentary that can be turned neutral or positive, and turning the conversation around to a more positive level to redirect them. Also consistently treating them in small, subtle ways with respect and reinforcement of their good traits, will signal to them that you're not "going to play."

In that manner you have avoided the counterproductive bombardment in an unavoidable situation, particularly if it's work where it's ongoing, and set the tone for future interaction on a higher plain. It also may open the door a crack for them to feel less trapped and possibly work their way out of their insecurities. This takes a lot work and reinforcement, especially since it's easy to unwittingly fall into the trap yourself.

Urban Landscape

Branching Out...