Commentary for the close of October 2008

gmakerley

This morning, I noted a couple of editorial cartoons featured in USA Today. One showed a woman standing in front of the teller's window at a bank, while behind the line two employees conferred. About her, one noted that she was one of the new owners of the bank and had come to withdraw her share of the $250 billion.

The other cartoon reflected a customer with a loan officer. The loan officer noted that "with an infusion of cash from taxpayers like yourself, we can now use that money for loans for people like you." The borrower responded by asking "how much interest do you charge to give my money back to me?"

For the vast majority of us, these are some hard times. I don't think "roller coaster" is sufficient to describe the ride that we've been on by watching the happenings on Wall Street the last week or so. It's abundantly clear that our policymakers are not clear on how to solve the current financial woes of this country.

Mortgage interest rates have climbed in that same timeframe, apparently in response to the bailout. Interestingly enough, though, rates this week are comparable to what they were in mid-August. Of course, that doesn't mean "we the people" aren't scared. Talk to each other, and see if you don't find that everyone has the same experience in dealing with our public. People are outright scared; and the buying and selling of real estate, the mortgaging of real estate and the processes of each have become onerous and just plain not much fun these days.

Can we take hope from the past? Sure we can. Not many remember the 80s when rates were in the mid- and high-teens. That was a great time for savers, but not such a pleasant time for borrowers and lenders. Somehow, though, we all survived it.

Of course, "sub-prime" didn't even exist back then, so everyone had to document their income, their assets, etc. - gee, that's kind of like right now, isn't it? Doesn't is seem like the more things change, the more they stay the same? Many thanks to Jean-Baptiste Alphonse Karr for that quote.

No matter what, we have many things to be thankful for. Despite the crashing of the Dow Jones average the other day, I still woke up the next morning. Although there might not be too many people knocking down the door looking for money to borrow, I still have a job (and there's money to lend!). Family and friends count for much, and they stick around even when we are at our worst.

This, too, shall pass.

Posted: Fri Oct 31, 2008 8:34 am Post subject:

Nice post George.

jameshogg · Posted: Mon Nov 03, 2008 12:22 am Post subject:

This is really a great post George! A lot of people will gain confidence reading it. One has to agree that nothing remains stable. So I agree with you - "This, too, shall pass."

Thanks,

James Hogg

Jessica · Posted: Wed Nov 05, 2008 5:52 am Post subject:

I agree with George. We can definitely learn a great deal from what's happened in the past. It has been a roller coaster ride so far as the market is concerned with ups and downs at regular intervals. And of course, like every bad time this period will pass away too.

I must say George, it's an optimistic post from your end. Smile

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