An Economy on the Brink

this "article" really made me reach for the Beano...

"The American imagination is haunted by the Great Depression of the '30s..."The losses to the financial system are horrific"..."The fate of the U.S. economy now hangs in the balance." And you wonder why newspaper and magazine readership is down. "Writing" like this gives me a bad case of gas...

An economy on the brink

All Ponzi schemes end. The house market was such a game. Any prudent person could have seen it and judging from the defaults on houses bought at above their value, many did see it coming. The fact that the collapse of this scheme affects people across the world only shows that greed is universal. Let's call what is happening by its true name: Just Comeupance. Our mother's would be proud to hear us admit our fault. There still is no free lunch, somebody pays: usually the one without the least foresight.

What is a 'home'?

I've not heard the statistics about what percentage of the homes foreclosed on are 'spec homes', but in my mind's eye, a home is, well, a home. It's a place you live in, grow up in, stay in. Its purpose isn't to generate revenue. Its purpose is to provide a comfortable shelter against the elements for an indefinite, but long period of time. A home isn't supposed to be bought to make money. It's supposed to be bought to make a LIFE.

Isn't that what the American Dream is supposed to be all about?

Given THAT mindset, it doesn't MATTER when you 'get into the market' because you're not in the market to play the rollover game. You're there to live.

That, to me, is what killed the home sales market - speculators. While I haven't seen statistics to back this up (Hint, hint, hint), the number of people playing the real estate shell game certainly a very large degree contributed to the fiscal free-for-all mentality that dominated the mortgage world up until the crash. If everyone had bought a home to make a life rather than gotten into the market to make money, it seems to me there would have been more scrutiny and oversight (especially for those home equity loans) and less incentive for greed because the market wouldn't have been so over-inflated in the first place.

Yes, I'm old-fashioned in some things, but to me, a home isn't a commodity to be bought and sold. It's a place in which one builds a life. And it seems to me the more that people view homes as such, then less likely another housing market crash will happen.